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 3 - The Australian CS facility licence  

Subdivision A - How to get a licence  

SECTION 824B   WHEN A LICENCE MAY BE GRANTED  

General

824B(1)    

ASIC may grant an applicant an Australian CS facility licence if ASIC is satisfied that:

(a)    the application was made in accordance with section 824A ; and

(b)    the applicant will comply with the obligations that will apply if the licence is granted; and

(c)    the applicant has adequate operating rules, and procedures, (see Subdivision B of Division 2 ) for the facility to ensure, as far as is reasonably practicable, that systemic risk is reduced and the facility is operated in a fair and effective way; and

(d)    the applicant has adequate arrangements (whether they involve a self-regulatory structure or the appointment of an independent person or related entity) for supervising the facility, including arrangements for:

(i) handling conflicts between the commercial interests of the licensee and the need for the licensee to reduce systemic risk and ensure that the facility's services are provided in a fair and effective way; and

(ii) enforcing compliance with the facility's operating rules; and

(e)    no unacceptable control situation (see Division 1 of Part 7.4 ) is likely to result if the licence is granted; and

(f)    no disqualified individual appears to be involved in the applicant (see Division 2 of Part 7.4 ).

Note: ASIC must also have regard to the matters in section 827A in deciding whether to grant a licence.

Alternative criteria for granting licence to overseas clearing and settlement facility

824B(2)    

If an applicant is authorised to operate a clearing and settlement facility in the foreign country in which its principal place of business is located, ASIC may grant the applicant an Australian CS facility licence authorising the applicant to operate the same facility in this jurisdiction. ASIC must be satisfied that:

(a)    the application was made in accordance with section 824A ; and

(b)    the applicant will comply with the obligations that will apply if the licence is granted; and

(c)    the operation of the facility in that country is subject to requirements and supervision that are sufficiently equivalent, in relation to the degree of protection from systemic risk and the level of effectiveness and fairness of services they achieve, to the requirements and supervision to which clearing and settlement facilities are subject under this Act in relation to those matters; and

(d)    

the applicant undertakes to cooperate with ASIC and the Reserve Bank by sharing information and in other ways; and

(e)    no unacceptable control situation (see Division 1 of Part 7.4 ) is likely to result if the licence is granted; and

(f)    no disqualified individual appears to be involved in the applicant (see Division 2 of Part 7.4 ); and

(g)    any other requirements that are prescribed by regulations made for the purposes of this subsection are satisfied.

Note: ASIC must also have regard to the matters in section 827A in deciding whether to grant a licence.

Grant to receiving body

824B(3)    

If:

(a)    the Minister consents under paragraph 837A(1)(b) or 837B(1)(b) to a transfer in relation to a CS facility licensee; and

(b)    the Reserve Bank issues a certificate under subsection 838A(1) that the transfer is to take effect;

the Minister may grant an Australian CS facility licence to a body corporate that, as a result of the transfer, becomes, or will become, the successor in law of the CS facility licensee.

824B(4)    

A licence granted to a body corporate under subsection (3) is taken to be:

(a)    unless paragraph (b) of this subsection applies - a licence granted under subsection (1) ; or

(b)    if the licence states that it is to be taken to have been granted under subsection (2) - a licence granted under subsection (2) authorising the body corporate to operate a specified clearing and settlement facility in this jurisdiction.