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 7.3B - CRISIS RESOLUTION FOR CS FACILITY LICENSEES  

DIVISION 2 - CRISIS RESOLUTION FOR CS FACILITY LICENSEES  

SECTION 831A   RESERVE BANK MAY EXERCISE CRISIS RESOLUTION POWERS IF CERTAIN CONDITIONS ARE SATISFIED  

831A(1)    
The Reserve Bank may take action in accordance with this Part in relation to a CS facility licensee if any of the following conditions are satisfied in relation to the licensee:

(a)    the licensee requests the Reserve Bank to take action and the Reserve Bank reasonably believes that an event relating to the licensee is likely to pose a threat to:

(i) the stability of the financial system in Australia; or

(ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia;

(b)    the licensee contravenes a direction issued under Part 7.3 by the Reserve Bank and the Reserve Bank reasonably believes that the contravention is likely to pose a threat to:

(i) the stability of the financial system in Australia; or

(ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia;

(c)    the licensee notifies the Reserve Bank that:

(i) the licensee has ceased, intends to cease or is likely to cease providing one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; or

(ii) in the absence of external support, the licensee is likely to be unable to continue to provide one or more clearing and settlement facility services in a way that causes or promotes stability in the Australian financial system; or

(iii) in the absence of external support, the licensee is likely to be unable to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia;

(d)    the Reserve Bank reasonably believes that, in the absence of external support, the licensee is likely to be unable to:

(i) continue to provide one or more clearing and settlement facility services in a way that causes or promotes stability in the Australian financial system; or

(ii) continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia;

(e)    the licensee notifies the Reserve Bank that:

(i) the licensee ' s financial viability is at risk or is likely to be at risk; or

(ii) in the absence of external support, the licensee ' s financial viability is likely to be at risk;

(f)    the Reserve Bank reasonably believes that, in the absence of external support, the licensee ' s financial viability is likely to be at risk;

(g)    an external administrator of the licensee has been appointed;

(h)    the licensee notifies the Reserve Bank that it is considering appointing an external administrator of the licensee;

(i)    the Reserve Bank reasonably believes that a person is seeking to have an external administrator of the licensee appointed;

(j)    an external administrator of a related body corporate of the licensee has been appointed, or a similar appointment has been made under a foreign law, and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to:

(i) the stability of the financial system in Australia; or

(ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia;

(k)    a related body corporate of the licensee, that is incorporated in Australia, notifies the Reserve Bank that it is considering appointing an external administrator of itself and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to:

(i) the stability of the financial system in Australia; or

(ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia;

(l)    the Reserve Bank reasonably believes that a person is seeking to have an external administrator of a related body corporate of the licensee appointed, or a person is seeking to make a similar appointment under a foreign law, and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to:

(i) the stability of the financial system in Australia; or

(ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia;

(m)    the licensee, or a related body corporate of the licensee that is incorporated in Australia, is doing or not doing any act or thing, and the Reserve Bank reasonably believes this is likely to pose a threat to:

(i) the stability of the financial system in Australia; or

(ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia.

831A(2)    
A reference in subsection (1) to taking action in accordance with this Part does not include a reference to taking action under Subdivision C of Division 9 (temporary suspension of termination rights).

Note: The Reserve Bank may take action under that Subdivision if the Reserve Bank intends to take action under Division 3 or 4 : see subsection 849BA(2)

Overseas clearing and settlement facilities

831A(3)    
Subsection (1) of this section does not apply in relation to a CS facility licensee whose licence was granted under subsection 824B(2) (overseas clearing and settlement facilities).

831A(4)    
This section does not limit Division 8 (cross-border crisis resolution).

Note: Under Division 8 , the Reserve Bank may take certain actions in accordance with this Part in relation to a CS facility licensee mentioned in subsection (3) of this section to assist a foreign authority to manage or respond to an event relating to the licensee.