Corporations Regulations 2001

CHAPTER 9 - MISCELLANEOUS  

PART 9.12 - MATTERS RELATING TO REGULATIONS  

REGULATION 9.12.02   EXEMPTION FROM PROVISIONS OF CHAPTER 7 - CLS BANK  

9.12.02(1)    

For section 1368 of the Act, the following provisions of Chapter 7 of the Act do not have effect in relation to the following transactions by CLS participants in the facility operated [ sic ] CLS Bank International:

(a)    

section 794E - settlement of non-cash payments between CLS participants;

(b)    

Part 7.3 - settlement of non-cash payments between CLS participants in relation to the provision or transfer of:

(i) a security, or a managed investment product; or

(ii) a financial product mentioned in paragraph 764A(1)(ba) , (c) , (j) or (k) of the Act.

9.12.02(2)    
Subregulation (1) is subject to the conditions set out in this regulation.

9.12.02(3)    
CLS Bank International must:

(a)    operate under section 25A of the Federal Reserve Act of the United States of America; and

(b)    be regulated as a bank by the Board of Governors of the Federal Reserve System of the United States of America.

9.12.02(4)    

An Australian entity that is a CLS participant in the facility operated by CLS Bank International:

(a)    must be regulated by APRA; and

(b)    

must not use the services of CLS Bank International as a retail client.

9.12.02(5)    
CLS Bank International must tell the Reserve Bank of Australia in writing as soon as practicable after any of the following circumstances happen:

(a)    

CLS Bank International receives a request for an Australian entity to become a CLS participant in the facility it operates;

(b)    CLS Bank International proposes approving an additional Australian entity or Australian resident as a shareholder;

(c)    CLS Bank International notifies the Board of Governors of the Federal Reserve System of the United States of America of a proposed change in the character or nature of the facility or a significant change in its operations;

(d)    material regulatory action is taken against CLS Bank International in any other jurisdiction.

9.12.02(6)    

In this regulation:

Australian entity
includes:

(a) an Australian ADI that is permitted under section 66 of the Banking Act 1959 to assume or use:

(i) the word bank, banker or banking; or

(ii) any other word (whether or not in English) that is of like import to a word referred to in subparagraph (i); or

(b) a financial services licensee.

CLS participant
in the facility operated by CLS Bank International means a person who, under the facility ' s operating rules, is allowed to participate directly in the facility, with or without the authority of another such person.

material regulatory action
, for the facility operated by CLS Bank International, means:

(a) any action by the Board of Governors of the Federal Reserve System of the United States of America that requires CLS Bank International to cease, suspend or vary its operations or to take any other action in the nature of a sanction or corrective action in relation to either the operation of the facility or CLS Bank International; or

(b) regulatory action that is likely to affect Australian CLS participants in the facility or any Australian operations of CLS Bank International.

participant
(Repealed by FRLI No F2023L01458, Sch 1 [ 286] (effective 1 November 2023).)