Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.3 - LICENSING OF CLEARING AND SETTLEMENT FACILITIES  

Division 1 - Requirement to be licensed  

SECTION 820E   CRITERIA FOR DECLARATIONS THAT CLEARING AND SETTLEMENT FACILITIES HAVE A MATERIAL CONNECTION WITH THIS JURISDICTION  

820E(1)    
When ASIC is deciding under subsection 820D(2) whether to declare that a clearing and settlement facility has a material connection with this jurisdiction:

(a)    the facility must have a connection with this jurisdiction (see subsection (2) of this section); and

(b)    ASIC must consider, under subsection (3) of this section, whether the connection is material.

Does the facility have a connection with this jurisdiction?

820E(2)    
The clearing and settlement facility has a connection with this jurisdiction if one or more of the following paragraphs apply to the facility:

(a)    the facility has operations located in this jurisdiction;

(b)    the facility provides services for financial products:

(i) denominated in Australian currency; or

(ii) issued by a domestic corporation or by the Commonwealth, a State or a Territory;

(c)    the facility provides services for financial products based on something else (of any nature whatsoever and whether or not deliverable) located or issued in this jurisdiction, including, for example, one or more of the following:

(i) an asset;

(ii) a rate (including an interest rate or exchange rate);

(iii) an index;

(iv) a commodity;

(d)    one or more current or expected participants in the facility are resident or based in this jurisdiction;

(e)    the operator of the facility has entered into an arrangement:

(i) with the holder of an Australian market licence granted under subsection 795B(1) ; or

(ii) (either directly or indirectly through one or more interposed entities) with the holder of an Australian CS facility licence granted under subsection 824B(1) ; or

(iii) with the operator of a payments system determined under subsection 820F(1) ;

(f)    circumstances determined under paragraph 820F(3)(a) exist in relation to the facility.

If such a connection exists, is it material?

820E(3)    
The clearing and settlement facility ' s connection with this jurisdiction is material if ASIC considers that, after applying any principles in force under paragraph 820F(3)(c) , one or more of the following paragraphs apply to the facility:

(a)    the current or expected number of participants in the facility who are resident or based in this jurisdiction is material;

(b)    the size and extent of current or expected aggregate activity with the facility of those participants is material to:

(i) the risk management activities of those participants; or

(ii) the efficient allocation of capital or liquidity to the Australian economy;

(c)    the size and extent of current or expected activity in a relevant financial product class offered by the facility is material to:

(i) risk management activities in the Australian financial system; or

(ii) the efficient allocation of capital or liquidity to the Australian economy;

(d)    the operator of the facility has an arrangement covered by paragraph (2)(e) of this section that is material;

(e)    circumstances determined under paragraph 820F(3)(b) exist in relation to the facility.

ASIC may request related information

820E(4)    
ASIC may, by written notice given to a body corporate, request the body to give ASIC, within a period specified in the notice, information about a clearing and settlement facility operated by the body.