Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) Subsection (2) applies if:
(a) a trigger event to which a specified stay provision (other than a direction stay provision) applies:
(i) is an event that involves a regulated body; and
(ii) happens in relation to a close - out netting contract (the trigger contract ) to which the regulated body is a party; and
(b) APRA is satisfied that all the matters in subsection (3) will be satisfied in relation to the party in respect of which the declaration under subsection (2) will be made:
(i) unless subparagraph (ii) applies--at the time the declaration will be made; or
(ii) if a certificate of transfer will come into force under the Business Transfer Act for a transfer of business from the regulated body to a receiving body--just after that coming into force; and
(c) the party in respect of which the declaration under subsection (2) will be made is not in external administration (disregarding paragraphs (d), (daa), (da), (db), (e) and (f) of the definition of external administration in section 5); and
(d) APRA has not already made a declaration under section 15B in relation to the trigger event happening in relation to the trigger contract.
(2) APRA may, before the end of the resolution period for the trigger event, declare that the specified stay provision is to continue to apply to:
(a) unless paragraph (b) or (c) applies:
(i) all close - out netting contracts to which the regulated body is a party; and
(ii) all securities given over financial property, in respect of obligations under those close - out netting contracts; or
(b) in the case of a total transfer under the Business Transfer Act:
(i) all close - out netting contracts to which the regulated body is a party (and to which the receiving body will become a party immediately after the transfer); and
(ii) all securities given over financial property, in respect of obligations under those close - out netting contracts; or
(c) in the case of a partial transfer under the Business Transfer Act--either or both of the following:
(i) all close - out netting contracts to which the regulated body is a party (and to which the regulated body will remain a party immediately after the transfer), and all securities given over financial property in respect of obligations under those contracts;
(ii) all close - out netting contracts to which the regulated body is a party (and to which the receiving body will become a party immediately after the transfer), and all securities given over financial property in respect of obligations under those contracts.
(3) For the purposes of paragraph (1)(b), the matters are as follows:
(a) that the party is able to meet all its liabilities under:
(i) close - out netting contracts to which it is a party; and
(ii) securities given over financial property in respect of obligations of the party under those contracts;
as and when they become due and payable;
(b) that the party is solvent (within the meaning of the Corporations Act 2001 );
(c) if the party is an ADI, a general insurer or a life company--that the party has each material authorisation (however described) necessary for its regulated business;
(d) if minimum capital requirements under the Banking Act 1959 , the Insurance Act 1973 or the Life Insurance Act 1995 apply to the party--that either subsection (4) or subsection (5) is satisfied in respect of the party.
(4) This subsection is satisfied if the party's level of capital complies with the minimum capital requirements that apply to it under:
(a) the Banking Act 1959 , the Insurance Act 1973 or the Life Insurance Act 1995 (as the case requires); and
(b) the applicable prudential standards made under that Act.
(5) This subsection is satisfied if:
(a) arrangements are in place to ensure that the party performs all its obligations under:
(i) close - out netting contracts to which it is a party; and
(ii) securities given over financial property in respect of obligations of the party under those contracts;
as and when they are due to be performed; and
(b) those arrangements will remain in place until at least the earliest day on which one or more of the following occurs:
(i) subsection (4) is satisfied;
(ii) if a Banking Act statutory manager is in control of the party's business--APRA makes an ultimate termination of control under subsection 13C(3) of the Banking Act 1959 ;
(iii) if an Insurance Act statutory manager is in control of the party's business--APRA makes an ultimate termination of control under subsection 62ZOC(3) of the Insurance Act 1973 ;
(iv) if a Life Insurance Act statutory manager is in control of the party's business--APRA makes an ultimate termination of control under subsection 179AC(3) of the Life Insurance Act 1995 ;
(v) if the party is under judicial management under the Insurance Act 1973 --an order under section 62ZF of that Act cancelling the judicial management comes into force;
(vi) if the party is under judicial management under the Life Insurance Act 1995 --an order under section 172 of that Act cancelling the judicial management comes into force.
(6) A declaration under subsection (2) cannot be varied or revoked.
(7) A declaration under this section is not a legislative instrument.
(8) The regulations may do any of the following:
(a) prescribe requirements relating to how declarations under subsection (2) are to be made (including requirements relating to the content or form of declarations);
(b) prescribe requirements relating to the notification or publication of declarations under subsection (2);
(c) include provisions that apply to determining, either generally or for a particular purpose, the time when declarations under subsection (2) are taken to be made.
Note: Regulations under paragraph (c) may (for example) provide that, for the purpose of this section, a declaration is taken not to have been made until certain requirements of regulations under paragraph (b) have been complied with.