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 1 - PRELIMINARY  

SECTION 830A  

830A   SIMPLIFIED OUTLINE OF THIS PART  

SECTION 830B  

830B   OBJECT OF THIS PART  

The object of this Part is to provide for the effective management and resolution of threats posed to:

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

(b)    the continuity of clearing and settlement facility services that are critical to the functioning of the financial system in Australia;
that arise from, or in relation to, 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 adirection 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.

DIVISION 3 - STATUTORY MANAGEMENT  

Subdivision A - Statutory management of body corporate in relation to CS facility licensee in crisis  

SECTION 832A   STATUTORY MANAGER TAKES CONTROL OF BODY CORPORATE  

832A(1)    
The Reserve Bank may take either or both of the actions in subsection (2) , if the Reserve Bank reasonably believes that the action is appropriate to manage or respond to a condition insection 831A being satisfied in relation to a CS facility licensee.

832A(2)    
The actions are:

(a)    taking control of the business of the licensee as statutory manager of the licensee; and

(b)    appointing one or more persons to take control of the business of the licensee, as statutory manager of the licensee.

Note: Section 836B deals with when there are 2 or more statutory managers of a body corporate (for example, when the Reserve Bank decides that both itself and another person are to take control as statutory manager).

832A(3)    
The Reserve Bank may take either or both of the actions in subsection (4) , if:

(a)    a statutory manager has taken control of the business of a CS facility licensee, or the Reserve Bank intends that a statutory manager will take control of the business of a CS facility licensee; and

(b)    the Reserve Bank reasonably believes that the action is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee.

832A(4)    
The actions are:

(a)    taking control of the business of a related body corporate of the licensee, that is incorporated in Australia, as statutory manager of the related body corporate; and

(b)    appointing one or more persons to take control of the business of a related body corporate of the licensee, that is incorporated in Australia, as statutory manager of the related body corporate.

Note: Section 836B deals with when there are 2 or more statutory managers of a body corporate (for example, when the Reserve Bank decides that both itself and another person are to take control as statutory manager).

832A(5)    
If the Reserve Bank decides to take an action under subsection (1) or (3) , the Reserve Bank must give the following, in writing, notice that a statutory manager will take, or is taking, control of the body corporate ' s business:

(a)    the body corporate;

(b)    if the body is under external administration - the external administrator.

Note: The appointment of the external administrator is terminated when a statutory manager takes control of the body corporate ' s business: see section 836A .

Limits on individual exercise of powers

832A(6)    
At the time a statutory manager (other than the Reserve Bank) is appointed, the Reserve Bank may give the statutory manager a notice, in writing, specifying any limits or conditions on the manager performing functions or exercising powers individually.

832A(7)    
A notice under subsection (6) must also be given to each other statutory manager of the body corporate (other than the Reserve Bank) at that time.

Instruments are not legislative instruments

832A(8)    
An instrument made under this section is not a legislative instrument.

SECTION 832B   TERMINATION OF APPOINTMENT OF STATUTORY MANAGER  

Termination of control by Reserve Bank

832B(1)    
The Reserve Bank may, in writing, decide to cease to be in control of the business of a body corporate as a statutory manager.

Note: The Reserve Bank may also decide under section 832A to appoint another statutory manager to take control of the body corporate ' s business.

832B(2)    
The Reserve Bank must notify the body corporate in writing of the decision.

832B(3)    
If:

(a)    the Reserve Bank has taken control of the business of a related body corporate of a CS facility licensee under paragraph 832A(4)(a) for the purpose of managing or responding to a condition in section 831A being satisfied in relation to the licensee; and

(b)    the licensee ceases being under statutory management;

the Reserve Bank must decide under subsection (1) of this section to cease to be in control of the business of the related body corporate.

Termination of appointments of statutory managers

832B(4)    
The Reserve Bank may, in writing, terminate the appointment of a statutory manager.

Note: The Reserve Bank may also decide under section 832A to take control of the body corporate ' s business or appoint another statutory manager to do so.

832B(5)    
The Reserve Bank must notify the body corporate and statutory manager in writing of the termination.

832B(6)    
If:

(a)    the Reserve Bank appoints a statutory manager of a related body corporate of a CS facility licensee under paragraph 832A(4)(b) for the purpose of managing or responding to a condition in section 831A being satisfied in relation to the licensee; and

(b)    the licensee ceases being under statutory management;

the Reserve Bank must, under subsection (4) of this section, terminate the appointment of the statutory manager of the related body corporate.

Instruments are not legislative instruments

832B(7)    
An instrument made under this section is not a legislative instrument.

SECTION 832C   WHEN A STATUTORY MANAGER IS IN CONTROL  

832C(1)    
A statutory manager takes control of a body corporate ' s business:

(a)    at the time specified in the notice given under subsection 832A(5) as the time when the statutory manager takes control of the business (which must not be earlier than when the notice is given); or

(b)    if the notice given under that subsection does not specify a time as the time when the statutory manager takes control of the business - at the time the notice is given.

832C(2)    
A statutory manager ceases to be in control of a body corporate ' s business:

(a)    if the statutory manager is the Reserve Bank and the Reserve Bank decides under subsection 832B(1) to cease to be in control of the body corporate ' s business:

(i) at the time specified in the notice given under subsection 832B(2) as the time when Reserve Bank ceases to be in control of the business (which must not be earlier than when the notice is given); or

(ii) if the notice given under subsection 832B(2) does not specify a time as the time when the Reserve Bank ceases to be in control of the business - at the time the notice is given; or

(b)    if the Reserve Bank terminates the appointment of the statutory manager under subsection 832B(4) :

(i) at the time specified in the notice given to the body corporate under subsection 832B(5) as the time when the termination takes effect (which must not be earlier than when the notice is given); or

(ii) if the notice given to the body corporate under subsection 832B(5) does not specify a time as the time when the termination takes effect - at the time the notice is given.

832C(3)    
While a statutory manager is in control of a body corporate ' s business, the body corporate is under statutory management .

832C(4)    
To avoid doubt, a body corporate does not cease to be under statutory management when a statutory manager of the body corporate is replaced with another statutory manager.

832C(5)    
The Public Governance, Performance and Accountability Act 2013 does not apply to a body corporate under statutory management.

Subdivision B - Powers of statutory manager  

SECTION 833A   ROLE OF THE STATUTORY MANAGER  

833A(1)    
While a statutory manager of a body corporate is in control of the business of the body corporate the statutory manager:

(a)    has control of the body corporate ' s business, property and affairs; and

(b)    may carry on that business and manage that property and those affairs; and

(c)    at the directionof or with the written consent of the Reserve Bank:

(i) may terminate or dispose of all or part of that business; and

(ii) may dispose of any of that property; and

(d)    may perform any function, and exercise any power, that the body corporate or any of its officers could perform or exercise under the operating rules or procedures of a licensed CS facility of which the body corporate is the licensee; and

(e)    may perform any other function, and exercise any other power, that the body corporate or any of its officers could perform or exercise if a statutory manager were not in control of the body corporate ' s business.

Note: An expert report on fair value may be required before taking action: see section 849CB .

833A(2)    
Nothing in subsection (1) limits the generality of anything else in it.

Limitations

833A(3)    
This section does not permit the statutory manager to:

(a)    alter the body corporate ' s constitution or other arrangements for governance other than in accordance with section 833C ; or

(b)    recapitalise other than in accordance with section 833D ; or

(c)    effect a transfer of all or part of the shares in the body corporate or a total or partial transfer of the business of the body corporate, other than in accordance with Division 4 (compulsory transfers).

Meaning of property

833A(4)    
In this Part, property of a body corporate includes any PPSA retention of title property of the body corporate.

Note: See also:

(a) the definition of property in section 9 ; and

(b) section 51F (meaning of PPSA retention of title property ).

SECTION 833B  

833B   POWERS TO REMOVE DIRECTOR ETC.  

Without limiting section 833A , the statutory manager of a body corporate has power to do any of the following:

(a)    remove from office a director of the body corporate;

(b)    appoint a person as such a director, whether to fill a vacancy or not;

(c)    execute a document, bring or defend proceedings, or do anything else, in the body corporate ' s name and on its behalf;

(d)    whatever else is necessary for the purposes of this Part.

SECTION 833C   POWER TO ALTER BODY CORPORATE ' S CONSTITUTION ETC.  

833C(1)    
The statutory manager of a body corporate may alter the body corporate ' s constitution or other arrangements for governance if the alteration is reasonably necessary for enabling or facilitating:

(a)    the performance of the statutory manager ' s functions and duties under this Part in relation to the body corporate; or

(b)    the exercise of the statutory manager ' s other powers under this Part in relation to the body corporate.

This section does not permit transfers of shares or business

833C(2)    
This section does not permit the statutory manager to effect a transfer of all or part of the shares in the body corporate or a total or partial transfer of the business of the body corporate, other than in accordance with Division 4 (compulsory transfers).

Exercise of powers despite other laws etc.

833C(3)    
A statutory manager may do an act under subsection (1) despite all of the following:

(a)    this Act;

(b)    the body corporate ' s constitution;

(c)    any arrangement to which the body corporate is party;

(d)    any listing rules of a financial market in whose official list the body corporate is included.

SECTION 833D   POWERS TO FACILITATE RECAPITALISATION  

833D(1)    
A statutory manager of a body corporate may do one or more of the following acts on terms determined by the statutory manager, at the direction of or with the written consent of the Reserve Bank:

(a)    increase the body corporate ' s level of share capital to a level specified in the determination;

(b)    issue one or more classes of shares, or one or more specified classes of rights to acquire shares, in the body corporate, being a class or classes specified in the determination;

(c)    issue capital instruments;

(d)    acquire, cancel or sell:

(i) shares in the body corporate; or

(ii) rights to acquire shares in the body corporate;

(e)    reduce the body corporate ' s share capital;

(f)    vary or cancel rights or restrictions attached to shares in a class of shares in the body corporate.

Note: An expert report on fair value may be required before taking action: see section 849CB .

Notice to members

833D(2)    
As soon as practicable after the statutory manager does an act under subsection (1) , the statutory manager must give a written notice:

(a)    to the persons who were members of the body just before the act; and

(b)    that:

(i) identifies the act; and

(ii) explains the effect of the act on the members ' interests.

833D(3)    
A contravention of subsection (2) does not affect the validity of anything done under subsection (1) .

This section does not permit transfers of shares or business

833D(4)    
This section does not permit the statutory manager to effect a transfer of all or part of the shares in the body corporate, or a total or partial transfer of the business of the body corporate, other than in accordance with Division 4 (compulsory transfers).

Exercise of powers despite other laws etc.

833D(5)    
A statutory manager may do an act under subsection (1) despite all of the following:

(a)    this Act;

(b)    the body corporate ' s constitution;

(c)    any operating rules or procedures of a licensed CS facility of which the body corporate is the licensee;

(d)    any arrangement to which the body corporate is party;

(e)    any listing rules of a financial market in whose official list the body corporate is included.

SECTION 833E   STATUTORY MANAGER MAY REQUEST INFORMATION ETC. TO BE GIVEN  

833E(1)    
A statutory manager of a body corporate may, in writing, request a person to whom subsection (2) applies to:

(a)    attend on the statutory manager; or

(b)    give the statutory manager any information relating to the body corporate ' s business, assets and other property, affairs and financial circumstances that the statutory manager reasonably believes would assist the statutory manager in performing the statutory manager ' s functions, or exercising the statutory manager ' s powers; or

(c)    allow the statutory manager to inspect and take copies of the body corporate ' s books;

at the times and in the manner reasonably required by the statutory manager.

833E(2)    
This subsection applies to a person who:

(a)    is an officer of the body corporate; or

(b)    was an officer of the body corporate:

(i) at any time when the body corporate was under statutory management; or

(ii) any time occurring during the 3 years ending when the body corporate began to be under statutory management.

833E(3)    
A request to give information may include a request to produce books, accounts or documents.

Offence

833E(4)    
A person must comply with a request under subsection (1) .

Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .

Information may be given to the Reserve Bank

833E(5)    
A statutory manager may give the Reserve Bank any information that the statutory manager receives under this Part.

Note: The secrecy provision in section 79A of the Reserve Bank Act 1959 applies to information and documents obtained by the Reserve Bank under this section (either as statutory manager under subsection (1) of this section or from a statutory manager under this subsection).

SECTION 833F  

833F   STATUTORY MANAGER ACTS AS BODY CORPORATE ' S AGENT  

When performing a function, or exercising a power, as the statutory manager of a body corporate, the statutory manager is taken to be acting as the body corporate ' s agent.

Subdivision C - Effect of statutory manager assuming control  

SECTION 834A   EXERCISE OF DIRECTORS ' POWERS WHILE BODY CORPORATE UNDER STATUTORY MANAGEMENT  

Powers of directors while body corporate under statutory management

834A(1)    
While a body corporate is under statutory management, a director of the body must not perform or exercise a function or power of a director.

Offence

834A(2)    
A person commits an offence if:

(a)    the person is a director of a body corporate; and

(b)    the body corporate is under statutory management; and

(c)    the person purports to perform or exercise a function or power of a director.

Exceptions

834A(3)    
Subsections (1) and (2) do not apply to the extent that the director of the body corporate is acting with the written approval of the statutory manager of the body corporate or the Reserve Bank.

Note: A defendant bears an evidential burden in relation to the matter in this subsection: see subsection 13.3(3) of the Criminal Code .

Reserve Bank may revoke or vary the approval

834A(4)    
If a statutory manager (other than the Reserve Bank) gives written approval for the purposes of subsection (3) , the statutory manager must immediately notify the Reserve Bank in writing.

834A(5)    
The Reserve Bank may decide to revoke or vary the approval. The Reserve Bank ' s decision takes effect from the time the director is notified of the decision in writing.

Functions and powers of statutory manager prevail in case of conflict

834A(6)    
If:

(a)    subsection (3) applies; and

(b)    there is a conflict between:

(i) a function or power of the statutory manager of the body corporate; and

(ii) a function or power of the director in relation to the body corporate;

the statutory manager ' s function or power prevails.

Effect of this section

834A(7)    
This section does not remove a director of a body corporate from office.

834A(8)    
Nothing in this section affects a secured creditor ' s right to realise or otherwise deal with a security interest.

SECTION 834B  

834B   EFFECT OF THINGS DONE DURING STATUTORY MANAGEMENT OF BODY CORPORATE  

A payment made, transaction entered into, or any other act or thing done, in good faith, by the statutory manager of a body corporate under statutory management or with the written consent of the statutory manager or the Reserve Bank:

(a)    is valid and effectual for the purposes of this Act; and

(b)    is not liable to be set aside in a winding up of the body corporate.

SECTION 834C   EFFECT OF STATUTORY MANAGEMENT ON BODY CORPORATE ' S MEMBERS  

Transfer of shares

834C(1)    
A transfer of shares in a body corporate that is made during the statutory management of the body corporate is void except if:

(a)    both:

(i) the statutory manager or the Reserve Bank gives written consent to the transfer; and

(ii) that consent is unconditional; or

(b)    all of the following subparagraphs apply:

(i) the statutory manager or the Reserve Bank gives written consent to the transfer;

(ii) that consent is subject to one or more specified conditions;

(iii) those conditions have been satisfied; or

(c)    the transfer is done to give effect to an action under section 833D (recapitalisation actions) by the statutory manager; or

(d)    the transfer is done to give effect to a transfer under Division 4 (compulsory transfers).

Alteration in the status of members

834C(2)    
An alteration in the status of members of a body corporate that is made during the statutory management of the body corporate is void except if:

(a)    both:

(i) the statutory manager or the Reserve Bank gives written consent to the alteration; and

(ii) that consent is unconditional; or

(b)    all of the following subparagraphs apply:

(i) the statutory manager or the Reserve Bank gives written consent to the alteration;

(ii) that consent is subject to one or more specified conditions;

(iii) those conditions have been satisfied; or

(c)    the alteration is done to give effect to an action under section 833D (recapitalisation actions) by the statutory manager; or

(d)    the alteration is done to give effect to a transfer under Division 4 (compulsory transfers).

834C(3)    
As soon as practicable after an alteration in the status of members of a body corporate is made during the statutory management of the body corporate, the statutory manager must give a written notice:

(a)    to the persons who were members of the body just before the alteration; and

(b)    that:

(i) identifies the alteration; and

(ii) explains the effect of the alteration on the members ' interests.

834C(4)    
A contravention of subsection (3) does not affect the validity of the alteration.

Subdivision D - Additional duties of statutory manager  

SECTION 835A   REPORTING TO RESERVE BANK  

Duty to report to the Reserve Bank on request

835A(1)    
If requested by the Reserve Bank, a statutory manager of a body corporate (other than the Reserve Bank) must give the Reserve Bank a written report showing how the control of the body corporate ' s business is being carried out.

835A(2)    
The report must be given to the Reserve Bank within a reasonable time after the request.

Duty to report to the Reserve Bank on termination of appointment

835A(3)    
If the Reserve Bank terminates the appointment of a statutory manager of a body corporate, the statutory manager of the body corporate must give to the Reserve Bank a written report showing how the control of the body corporate ' s business was carried out over the period the statutory manager was in control.

835A(4)    
The report must be given to the Reserve Bank within a reasonable time after the termination.

SECTION 835B   RESERVE BANK ' S DIRECTIONS POWER - DIRECTIONS TO STATUTORY MANAGER  

Duty to follow directions by the Reserve Bank

835B(1)    
The Reserve Bank:

(a)    may give a statutory manager of a body corporate a direction relating to the control of the body corporate ' s business; and

(b)    may vary such a direction.

835B(2)    
A statutory manager who is given a direction, or a varied direction, under subsection (1) must:

(a)    comply with the direction; or

(b)    immediately:

(i) request the Reserve Bank to vary the direction; and

(ii) provide the Reserve Bank with information relating to the control of the body corporate ' s business that is relevant to its request.

835B(3)    
If the Reserve Bank refuses to vary the direction, the statutory manager must comply with the direction.

SECTION 835C  

835C   CONSENT TO TAKE ACTION THAT MAY AFFECT FINANCIAL SYSTEM STABILITY IN AUSTRALIA  

If a statutory manager of a body corporate (other than the Reserve Bank) has reasonable grounds to believe that an action that the statutory manager proposes to take is an action that is likely to pose a threat to:

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

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

the statutory manager must, before taking the action:

(c)    notify the Reserve Bank in writing as soon as practicable; and

(d)    obtain the Reserve Bank ' s written consent.

Subdivision E - Other matters  

SECTION 836A   EFFECT ON EXTERNAL ADMINISTRATION  

Termination of existing external administrator

836A(1)    
The appointment of an external administrator of a body corporate is terminated when a statutory manager takes control of the body corporate ' s business.

836A(2)    
Failure to give an external administrator notice under section 832A does not affect the operation of this section.

External administrator may only be appointed with approval during statutory management

836A(3)    
While a body corporate is under statutory management, an external administrator of the body corporate must not be appointed unless the Reserve Bank approves the appointment in writing.

Invalid acts

836A(4)    
If:

(a)    a person who ceased to be the external administrator of a body corporate under subsection (1) ; or

(b)    a purported external administrator of the body corporate appointed in contravention of subsection (3) ;

purports to act in relation to the body corporate ' s business, those acts are invalid and of no effect.

SECTION 836B  

836B   APPOINTMENT OF 2 OR MORE STATUTORY MANAGERS OF BODY CORPORATE  

If there are 2 or more statutory managers of a body corporate:

(a)    the functions and powers of a statutory manager of the body corporate may be performed or exercised by any one of them, or by any 2 or more of them together, subject to any limits or conditions specified in notices given under subsection 832A(6) ; and

(b)    a reference in this Act to a statutory manager, or to the statutory manager, of the body corporate is a reference to whichever one or more of those statutory managers the case requires.

SECTION 836C   COSTS OF STATUTORY MANAGEMENT  

836C(1)    
The Reserve Bank ' s costs (including costs in the nature of remuneration and expenses) of:

(a)    being in control of a body corporate ' s business as statutory manager; or

(b)    having a statutory manager in control of a body corporate ' s business;

are payable from the body corporate ' s funds and are a debt due to the Reserve Bank.

836C(2)    
Despite anything contained in this Act or any other law relating to the winding up of companies, debts due to the Reserve Bank by a body corporate under subsection (1) have priority in a winding-up of the body corporate over all other unsecured debts.

SECTION 836D  

836D   ANNUAL GENERAL MEETING NEED NOT BE HELD  

Despite sections 250N and 601BR , a body corporate need not hold an annual general meeting within a particular period if, at the end of that period, the body corporate is under statutory management.

SECTION 836E   DEALING WITH PROPERTY SUBJECT TO CIRCULATING SECURITY INTERESTS  

Scope

836E(1)    
This section applies if a security interest in property (the secured property ) of a body corporate under statutory management:

(a)    was a circulating security interest when the interest arose; but

(b)    has stopped being a circulating security interest because:

(i) in the case of a PPSA security interest - the property has stopped being a circulating asset (within the meaning of the Personal Property Securities Act 2009 ); or

(ii) in the case of a security interest that was a floating charge when it arose - the floating charge has since become a fixed or specific charge.

Note 1: A circulating security interest can be either a PPSA security interest to which a circulating asset has attached or a floating charge: see the definition of circulating security interest in section 9 .

Note 2: For the meaning of circulating asset , see section 340 of the Personal Property Securities Act 2009 .

Security interest in circulating asset

836E(2)    
Subject to section 836F in the case of a PPSA security interest, the statutory manager may deal with any of the secured property in any way the body corporate could deal with the secured property immediately before it stopped being a circulating asset.

Floating charge

836E(3)    
Subject to section 836F , if the secured interest was a floating charge when it arose, the statutory manager may deal with any of the secured property as if the security interest were still a floating charge.

Note: Section 836F deals with the disposal of encumbered property by a statutory manager.

SECTION 836F   WHEN STATUTORY MANAGER MAY DISPOSE OF ENCUMBERED PROPERTY  

836F(1)    
The statutory manager of a body corporate under statutory management must not dispose of:

(a)    property of the body corporate that is subject to a security interest; or

(b)    property (other than PPSA retention of title property) that is used or occupied by, or is in the possession of, the body corporate but of which someone else is the owner or lessor.

Note: PPSA retention of title property is subject to a PPSA security interest, and so is covered by paragraph (a) of this subsection: see the definition of PPSA retention of title property in section 51F .

836F(2)    
Subsection (1) does not prevent a disposal:

(a)    in the ordinary course of the body corporate ' s business; or

(b)    with the written consent of the secured party, owner or lessor, as the case may be; or

(c)    at the direction of or with the written consent of the Reserve Bank.

836F(3)    
If:

(a)    a body corporate is under statutory management; and

(b)    property of the body corporate is subject to a security interest; and

(c)    the statutory manager disposes of the property;

the disposal extinguishes the security interest.

836F(4)    
For the purposes of paragraph (2)(a) , if:

(a)    property is used or occupied by, or is in the possession of, a body corporate; and

(b)    another person is the owner of the property; and

(c)    either:

(i) the property is PPSA retention of title property; or

(ii) the property is subject to a retention of title clause under a contract; and

(d)    the owner demands the return of the property;

a disposal of the property that occurs after the demand is made does not mean that the disposal is not in the ordinary course of the body corporate ' s business.

SECTION 836G   PROCEEDS OF SALE OF PROPERTY  

Property subject to a possessory security interest

836G(1)    
If:

(a)    a body corporate is under statutory management; and

(b)    property of the body corporate is subject to a possessory security interest; and

(c)    the statutory manager of the body corporate disposes of the property by way of sale;

then:

(d)    if the net proceeds of sale equals or exceeds the total of the debts secured by:

(i) the possessory security interest; and

(ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;

the statutory manager of the body corporate must:

(iii) set aside so much of the net proceeds as equals the total of those debts; and

(iv) apply the amount so set aside in paying those debts; or

(e)    if the net proceeds of sale fall short of the total of the debts secured by:

(i) the possessory security interest; and

(ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;

then:

(iii) the statutory manager must set aside the net proceeds; and

(iv) the statutory manager must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and

(v) if any of those debts is not fully paid - so much of the debt as remains unpaid may be recovered from the body corporate as an unsecured debt.

PPSA retention of title property

836G(2)    
If the statutory manager of a body corporate disposes of PPSA retention of title property of the body corporate by way of sale, then the statutory manager must apply the net proceeds of the sale in the same way as a secured party is required, under section 140 of the Personal Property Securities Act 2009 , to apply an amount, personal property or proceeds of collateral received by the secured party as a result of enforcing a security interest in the property.

Note: PPSA retention of title property does not include property that is subject to a retention of title clause: see the definitions of PPSA retention of title property and retention of title clause in section 9 . Subsection (3) of this section deals with property that is subject to a retention of title clause.

Property subject to a retention of title clause

836G(3)    
If:

(a)    a body corporate is under statutory management; and

(b)    property is used or occupied by, or is in the possession of, the body; and

(c)    another person is the owner of the property; and

(d)    the property is subject to a retention of title clause under a contract (the original contract ); and

(e)    the statutory manager disposes of the property by way of sale;

then:

(f)    if the net proceeds of sale equals or exceeds the total of:

(i) so much of the purchase price, or other amount, under the original contract as remains unpaid; and

(ii) if there are one or more securities over the property - the debts secured by the securities;

the statutory manager must:

(iii) set aside so much of the net proceeds as equals that total; and

(iv) apply the amount so set aside in paying that total; or

(g)    if the net proceeds of sale fall short of the total of:

(i) so much of the purchase price, or other amount, under the original contract as remains unpaid; and

(ii) if there are one or more securities over the property - the debts secured by the securities;

then:

(iii) the statutory manager must set aside the net proceeds; and

(iv) the statutory manager must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and

(v) if any of those debts is not fully paid - so much of the debt as remains unpaid may be recovered from the body as an unsecured debt.

Note: Property that is subject to a retention of title clause does not include PPSA retention of title property: see the definitions of PPSA retention of title property and retention of title clause in section 9. Subsection (2) of this section deals with PPSA retention of title property.

SECTION 836H   SUPPLY OF ESSENTIAL SERVICES  

836H(1)    
If:

(a)    a statutory manager of a body corporate requests, or authorises someone else to request, a person or authority (the supplier ) to supply an essential service to the body corporate in Australia; and

(b)    the body corporate owes an amount to the supplier in respect of supply of the essential service before the effective day;

the supplier must not:

(c)    refuse to comply with the request for the reason only that the amount is owing; or

(d)    make it a condition of the supply of the essential service pursuant to the request that the amount is to be paid.

836H(2)    
If any conduct (including a refusal or failure to act) amounts or would amount to a contravention of paragraph (1)(c) or (d) in relation to a particular body corporate that is under statutory management, each of the following is taken, for the purposes of section 1324 , to be a person whose interests are affected by the conduct:

(a)    the statutory manager;

(b)    the Reserve Bank.

Note: Section 1324 provides for injunctions to enforce paragraphs (1)(c) and (d) of this section.

836H(3)    
However, the statutory manager may apply for an injunction under section 1324 in respect of the conduct only if the statutory manager applies jointly with the Reserve Bank.

836H(4)    
Subsection (3) of this section does not, by implication, limit the class of persons whose interests are affected by the conduct.

836H(5)    
In this section:

effective day
, in relation to a body corporate that is under statutory management, is the day the body corporate began to be under statutory management.

SECTION 836J  

836J   STATUTORY MANAGER HAS QUALIFIED PRIVILEGE  

A person who is or has been the statutory manager of a body corporate has qualified privilege in respect of a statement that the person has made, whether orally or in writing, in the course of performing or exercising any of the person ' s functions and powers as statutory manager of the body corporate.

SECTION 836K   PROTECTION OF PERSONS DEALING WITH STATUTORY MANAGER  

836K(1)    
Sections 128 and 129 apply in relation to a body corporate under statutory management as if:

(a)    a reference in those sections to the company, or to an officer of the company, included a reference to the statutory manager of the body corporate; and

(b)    a reference in those sections to an assumption referred to in section 129 included a reference to an assumption that the statutory manager is:

(i) acting within the statutory manager ' s functions and powers as statutory manager; and

(ii) in particular, is complying with this Act.

836K(2)    
The effect that sections 128 and 129 have because of subsection (1) of this section is additional to, and does not prejudice, the effect that sections 128 and 129 otherwise have in relation to a body corporate under statutory management.

Division 4 - Compulsory transfer of business or shares  

Subdivision A - Compulsory transfer of business or shares of body corporate in relation to CS facility licensee in crisis  

SECTION 837A   COMPULSORY TRANSFER OF SHARES IN BODY CORPORATE  

Transfer of all or part of the shares in a CS facility licensee

837A(1)    
The Reserve Bank may, in writing, make a determination that there is to be a transfer of all or part of the shares in a CS facility licensee (the target body ) to another body corporate (the receiving body ) if:

(a)    the Reserve Bank reasonably believes that the transfer is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee; and

(b)    the Minister consents to the transfer in writing; and

(c)    the Reserve Bank is satisfied that the board of the receiving body consents to the transfer.

Note: An expert report on fair value may be required before taking action: see section 849CB .

Transfer of all or part of the shares in a related body corporate

837A(2)    
The Reserve Bank may, in writing, make a determination that there is to be a transfer of all or part of the shares in a body corporate (the target body ) to another body corporate (the receiving body ) if:

(a)    the Reserve Bank has made, or intends to make, a determination under subsection (1) that there is to be a transfer of shares in a CS facility licensee to another body corporate; and

(b)    the Reserve Bank reasonably believes that the transfer to the receiving body is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee; and

(c)    the target body is, or before the transfer of shares from the licensee referred to in paragraph (a) of this subsection was, a related body corporate of the licensee; and

(d)    the target body is incorporated in Australia; and

(e)    the Minister consents to the transfer in writing; and

(f)    the Reserve Bank is satisfied that the board of the receiving body consents to the transfer.

Note: An expert report on fair value may be required before taking action: see section 849CB .

Determination

837A(3)    
A determination made under subsection (1) or (2) must include:

(a)    particulars of the transfer, including:

(i) the names of the target body and the receiving body; and

(ii) whether it will be a transfer of all or part of the shares; and

(iii) if it will be a transfer of part of the shares - an indication of the shares that are to be transferred; and

(b)    a statement of the reasons why the determination has been made.

837A(4)    
A determination made under subsection (1) or (2) is not a legislative instrument.

Notice

837A(5)    
The Reserve Bank must give a copy of a determination made under subsection (1) or (2) to the target body and the receiving body.

SECTION 837B   COMPULSORY TRANSFER OF BUSINESS OF BODY CORPORATE  

Total or partial transfer of business of CS facility licensee

837B(1)    
The Reserve Bank may, in writing, make a determination that there is to be a total or partial transfer of business of a CS facility licensee from the licensee (the target body ) to another body corporate (the receiving body ) if:

(a)    the Reserve Bank reasonably believes that the transfer is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee; and

(b)    the Minister consents to the transfer in writing; and

(c)    the Reserve Bank is satisfied that the board of the receiving body consents to the transfer.

Note: An expert report on fair value may be required before taking action: see section 849CB .

Total or partial transfer of business of related body corporate

837B(2)    
The Reserve Bank may, in writing, make a determination that there is to be a total or partial transfer of business from a body corporate (the target body ) to another body corporate (the receiving body ) if:

(a)    the Reserve Bank has made, or intends to make, a determination under subsection (1) that there is to be a total or partial transfer of business from a CS facility licensee to another body corporate; and

(b)    the Reserve Bank reasonably believes that the transfer to the receiving body is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee; and

(c)    the target body is, or before the transfer of business from the licensee referred to in paragraph (a) of this subsection was, a related body corporate of the licensee; and

(d)    the target body is incorporated in Australia; and

(e)    the Minister consents to the transfer in writing; and

(f)    the Reserve Bank is satisfied that the board of the receiving body consents to the transfer.

Note: An expert report on fair value may be required before taking action: see section 849CB .

Determination

837B(3)    
A determination made under subsection (1) or (2) must include:

(a)    particulars of the transfer, including:

(i) the names of the target body and the receiving body; and

(ii) whether it will be a total or a partial transfer; and

(iii) if it will be a partial transfer - an indication of the part of the target body's business that is to be transferred; and

(b)    a statement of the reasons why the determination has been made.

837B(4)    
A determination made under subsection (1) or (2) is not a legislative instrument.

Notice

837B(5)    
The Reserve Bank must give a copy of a determination made under subsection (1) or (2) to the target body and the receiving body.

SECTION 837C   WHEN CONSENT OF RECEIVING BODY IS IN FORCE  

837C(1)    
The consent of the board of a receiving body referred to in paragraph 837A(1)(c) or (2)(f) or 837B(1)(c) or (2)(f) remains in force until it is withdrawn by the board with the written agreement of the Reserve Bank.

837C(2)    
The Reserve Bank may agree to the consent being withdrawn if the Reserve Bank reasonably believes that it is appropriate to allow the consent to be withdrawn, having regard to any of the following:

(a)    circumstances that have arisen since the consent was given;

(b)    circumstances that were in existence at or before the time when the consent was given but that were not known to the receiving body ' s board when it gave its consent;

(c)    any other relevant matter.

SECTION 837D   AGREEMENT ABOUT HOW TRANSFER IS TO BE EFFECTED  

837D(1)    
If a determination is made under section 837A or 837B that there is to be a transfer, the target body or the receiving body, or both of those bodies, may provide the Reserve Bank with a written statement specifying, or specifying a mechanism for determining, things that are to happen, or that are taken to be the case, in relation to:

(a)    if the determination is made under section 837A - some or all of the shares that are to be transferred; or

(b)    if the determination is made under section 837B - some or all of the assets and liabilities that are to be transferred.

837D(2)    
The Reserve Bank may, in writing, approve the statement before issuing the certificate of transfer if the Reserve Bank is satisfied that:

(a)    the statement has been agreed to by the target body and the receiving body; and

(b)    the matters specified in the statement are appropriate.

SECTION 837E   DETERMINATION MAY IMPOSE CONDITIONS  

837E(1)    
A determination made under section 837A or 837B that there is to be a transfer may impose conditions of either or both of the following kinds:

(a)    conditions to be complied with by the target body or the receiving body before a certificate of transfer is issued in relation to the transfer;

(b)    conditions to be complied with by the target body or the receiving body after a certificate of transfer has been issued or has come into force in relation to the transfer.

837E(2)    
The Reserve Bank may, in writing, vary or revoke any condition of a determination if the Reserve Bank is satisfied that the variation or revocation is appropriate. Each body to which the condition applies must be given notice of the revocation or variation in writing.

837E(3)    
The target body or the receiving body may apply in writing to the Reserve Bank to have a condition of a determination that applies to it varied or revoked.

837E(4)    
The Reserve Bank may, by notice in writing given to the body that made the application, approve the variation or revocation if the Reserve Bank is satisfied that the variation or revocation is appropriate. A variation or revocation that is approved by the Reserve Bank has effect accordingly.

837E(5)    
If:

(a)    a condition is imposed on a body corporate under subsection (1) in relation to a transfer; and

(b)    a certificate issued under section 838A that transfer is to take effect is not in force; and

(c)    the Reserve Bank has not determined under section 837F that the transfer is not to take effect;

the body corporate must comply with the condition.

Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .

837E(6)    
A body corporate does not commit an offence against this Act merely because the body is complying with a condition imposed under subsection (1) .

Note: A defendant bears an evidential burden in relation to the matter in this subsection: see subsection 13.3(3) of the Criminal Code .

SECTION 837F   DETERMINATION THAT TRANSFER IS NOT TO TAKE EFFECT  

837F(1)    
If:

(a)    the Reserve Bank has made a determination under section 837A or 837B that there is to be a transfer; and

(b)    the Reserve Bank has not issued a certificate under section 838A that the transfer is to take effect; and

(c)    either:

(i) the consent of the board of the receiving body to the transfer has been withdrawn; or

(ii) the Reserve Bank decides under subsection (2) of this section that that the transfer should not go ahead;

the Reserve Bank must, in writing, issue a certificate stating that the transfer is not to take effect.

837F(2)    
The Reserve Bank may decide that the transfer should not go ahead if the Reserve Bank no longer reasonably believes that the transfer is appropriate to manage or respond to the condition in section 831A being satisfied in relation to a CS facility licensee, including because the condition is not satisfied in relation to the licensee.

837F(3)    
The certificate is not a legislative instrument.

Notice

837F(4)    
The Reserve Bank must give a copy of the certificate to the target body and the receiving body.

Subdivision B - Transfer process  

SECTION 838A   CERTIFICATE OF TRANSFER  

838A(1)    
If:

(a)    the Reserve Bank has made a determination under section 837A or 837B that there is to be a transfer; and

(b)    the Reserve Bank reasonably believes that the transfer should go ahead; and

(c)    the consent of the board of the receiving body to the transfer remains in force;

the Reserve Bank must, in writing, issue a certificate stating that the transfer is to take effect.

838A(2)    
The certificate of transfer must:

(a)    include the names of:

(i) the target body; and

(ii) the receiving body; and

(b)    if the determination is made under section 837A :

(i) state whether the transfer is a transfer of all or part of the shares; and

(ii) if the transfer is of part of the shares - include a list of the shares that are being transferred to the receiving body; and

(c)    if the determination is made under section 837B :

(i) state whether the transfer is a total or a partial transfer; and

(ii) if the transfer is a partial transfer - include, or have attached to it, a list of the assets and liabilities that are being transferred to the receiving body; and

(d)    state when the certificate is to come into force (either by specifying a date as the date it comes into force, or by specifying that the date it comes into force is a date worked out in accordance with provisions of the certificate).

838A(3)    
The certificate comes into force in accordance with the statement included in the certificate as required by paragraph (2)(d) .

838A(4)    
The certificate is not a legislative instrument.

Specification of things that are to happen on transfer etc.

838A(5)    
The certificate may include provisions specifying, or specifying a mechanism for determining, other things that are to happen, or that are taken to be the case, in relation to:

(a)    if the determination is made under section 837A - some or all of the shares that are to be transferred; or

(b)    if the determination is made under section 837B - some or all of the assets and liabilities that are to be transferred.

Note: For example, if the target body is the trustee of a trust, the certificate may specify how the trust is to be transferred.

Notice

838A(6)    
The Reserve Bank must:

(a)    give a copy of the certificate to the target body and the receiving body; and

(b)    publish the notice of the issue of the certificate on its website.

SECTION 838B   TIME AND EFFECT OF TRANSFER OF SHARES  

838B(1)    
When a certificate issued under section 838A for a transfer of shares comes into force, the shares in the target body that are to be transferred, wherever those shares are located, become shares held by the receiving body without any transfer, conveyance or assignment.

838B(2)    
Those shares become shares held by the receiving body free from any trust, liability or other encumbrance.

Certificate provisions for things to happen on transfer etc. are taken to have happened etc.

838B(3)    
If the certificate includes provisions of a kind referred to in paragraph 838A(5)(a) , then:

(a)    if the provisions specify that particular things are to happen or are taken to be the case - those things are, by force of this subsection, taken to happen, or to be the case, in accordance with those provisions; and

(b)    if the provisions specify a mechanism for determining things that are to happen or are taken to be the case - things determined in accordance with the mechanism are, by force of this subsection, taken to happen, or to be the case, as determined in accordance with that mechanism.

Agreed provisions for things to happen on transfer etc. are taken to have happened etc.

838B(4)    
If the Reserve Bank has approved a statement under subsection 837D(2) in relation to the transfer, then:

(a)    if the statement specifies that particular things are to happen or are taken to be the case - those things are, by force of this subsection, taken to happen, or to be the case, in accordance with the statement; and

(b)    if the statement specifies a mechanism for determining things that are to happen or are taken to be the case - things determined in accordance with that mechanism are, by force of this subsection, taken to happen, or to be the case, as determined in accordance with that mechanism.

SECTION 838C   TIME AND EFFECT OF TRANSFER OF BUSINESS  

838C(1)    
When a certificate issued under section 838A for a transfer of business comes into force, the receiving body becomes the successor in law of the target body, to the extent of the transfer. In particular:

(a)    if the transfer is a total transfer - all the assets and liabilities of the target body, wherever those assets and liabilities are located, become assets and liabilities of the receiving body (in the same capacity as they were assets and liabilities of the target body) without any transfer, conveyance or assignment; and

(b)    if the transfer is a partial transfer - all the assets and liabilities included in the list referred to in subparagraph 838A(2)(c)(ii) , wherever those assets and liabilities are located, become assets and liabilities of the receiving body (in the same capacity as they were assets and liabilities of the target body) without any transfer, conveyance or assignment; and

(c)    to the extent of the transfer, the duties, obligations, immunities, rights and privileges applying to the target body apply to the receiving body.

Certificate provisions for things to happen on transfer etc. are taken to have happened etc.

838C(2)    
If the certificate includes provisions of a kind referred to in paragraph 838A(5)(b) , then:

(a)    if the provisions specify that particular things are to happen or are taken to be the case - those things are, by force of this subsection, taken to happen, or to be the case, in accordance with those provisions; and

(b)    if the provisions specify a mechanism for determining things that are to happen or are taken to be the case - things determined in accordance with the mechanism are, by force of this subsection, taken to happen, or to be the case, as determined in accordance with that mechanism.

Agreed provisions for things to happen on transfer etc. are taken to have happened etc.

838C(3)    
If the Reserve Bank has approved a statement under subsection 837D(2) in relation to the transfer, then:

(a)    if the statement specifies that particular things are to happen or are taken to be the case - those things are, by force of this subsection, taken to happen, or to be the case, in accordance with the statement; and

(b)    if the statement specifies a mechanism for determining things that are to happen or are taken to be the case - things determined in accordance with that mechanism are, by force of this subsection, taken to happen, or to be the case, as determined in accordance with that mechanism.

Subdivision C - Other matters  

SECTION 839A   PARTIAL TRANSFER OF NETTING CONTRACTS VOID  

839A(1)    
This section applies if:

(a)    a certificate issued under section 838A for a partial transfer of business comes into force; and

(b)    just before the partial transfer, the target body is a party to:

(i) a close-out netting contract (within the meaning of the Payment Systems and Netting Act 1998 ); or

(ii) a security given over financial property (within the meaning of that Act), in respect of an obligation of the target body under a close-out netting contract; or

(iii) a market netting contract (within the meaning of that Act); or

(iv) a security given over property, in respect of an obligation of the target body under a market netting contract; or

(v) an approved netting arrangement (within the meaning of that Act); and

(c)    the partial transfer covers some (but not all) of the following assets and liabilities:

(i) the assets and liabilities the body has, under the close-out netting contract, market netting contract or approved netting arrangement, with respect to another party to the contract or arrangement (the counterparty );

(ii) those assets that are property over which security is given in respect of an obligation of the target body under the close-out netting contract or the market netting contract.

Note: The Payment Systems and Netting Act 1998 affects what the assets and liabilities of a party to a close-out netting contract, market netting contract or approved netting arrangement are taken to include.

839A(2)    
The partial transfer is void:

(a)    to the extent of the assets or liabilities the target body has, just before the partial transfer, under the close-out netting contract, market netting contract or approved netting arrangement, with respect to the counterparty; and

(b)    if security is given over financial property (within the meaning of the Payment Systems and Netting Act 1998 ) in respect of an obligation of the target body under a close-out netting contract - to the extent that the assets are financial property in the possession or control of one of the following persons just before the partial transfer:

(i) the counterparty;

(ii) another person (who is not the target body) on behalf of the counterparty, under the terms of an arrangement evidenced in writing; and

(c)    if security is given over property in respect of an obligation of the target body under a market netting contract - to the extent that the assets are that property.

SECTION 839B  

839B   RESERVE BANK MAY PROVIDE INFORMATION TO RECEIVING BODY  

The Reserve Bank may, in connection with a determination or a possible determination under section 837A or 837B that there is to be a transfer, provide information (including personal information or confidential commercial information) to the receiving body, or to the possible or proposed receiving body, about:

(a)    if the determination is, or would be, made under section 837A :

(i) some or all of the shares that are to be, or that may be, transferred; and

(ii) the business of the target body; or

(b)    if the determination is, or would be, made under section 837B - some or all of the business that is to be, or that may be, transferred.

Note: Subsection 79A(7A) of the Reserve Bank Act 1959 allows conditions to be imposed on a body who is provided information under this section to be complied with by the body in relation to that information.

SECTION 839C  

839C   CERTIFICATES IN RELATION TO LAND AND INTERESTS IN LAND  

If:

(a)    a body corporate (the receiving body ) becomes, under this Division, the owner of land, or of an interest in land, that is situated in a State or Territory; and

(b)    there is lodged with the Registrar of Titles or other appropriate officer of the State or Territory in which the land is situated a certificate that:

(i) is issued by the Reserve Bank; and

(ii) identifies the land or interest; and

(iii) states that the receiving body has, under this Division, become the owner of that land or interest;

the officer with whom the certificate is lodged may:

(c)    register the matter in the same manner as dealings in land or interests in land of that kind are registered; and

(d)    deal with, and give effect to, the certificate.

SECTION 839D   CERTIFICATES IN RELATION TO OTHER ASSETS  

839D(1)    
If:

(a)    an asset (other than land or an interest in land) becomes, under this Division, an asset of a body corporate (the receiving body ); and

(b)    there is lodged with the person or authority who has, under a law of the Commonwealth, a State or a Territory, responsibility for keeping a register in respect of assets of that kind a certificate that:

(i) is issued by the Reserve Bank; and

(ii) identifies the asset; and

(iii) states that the asset has, under this Division, become an asset of the receiving body;

that person or authority may:

(c)    register the matter in the same manner as transactions in relation to assets of that kind are registered; and

(d)    deal with, and give effect to, the certificate.

839D(2)    
This section does not affect the operation of:

(a)    other provisions of this Act; or

(b)    if the regulations prescribe provisions of one or more other Acts - those provisions of those Acts.

SECTION 839E  

839E   DOCUMENTS PURPORTING TO BE CERTIFICATES  

A document purporting to be a certificate given under this Division is, unless the contrary is established, taken to be such a certificate and to have been properly given.

SECTION 839F  

839F   CONSTRUCTION OF REFERENCES IN INSTRUMENTS TO TARGET BODY  

If a certificate issued under section 838A for a transfer comes into force, a reference in an instrument of any kind to the target body in relation to:

(a)    an asset or liability of the target body transferred under this Division; or

(b)    a share in the target body transferred under this Division;

is taken to be a reference to the receiving body.

SECTION 839G  

839G   INCOME OR OTHER DISTRIBUTION RECEIVED BY TARGET BODY  

The target body must promptly account to the receiving body for any income or other distribution received by the target body after a certificate of transfer comes into force, if the income or distribution arises from assets transferred to the receiving body under this Division.

Note: Failure to comply with this section is an offence: see subsection 1311(1) .

SECTION 839H  

839H   ACCESS TO BOOKS  

The target body must, at the request of the receiving body, give the receiving body access to all books in its possession that relate to assets or liabilities transferred under this Division.

Note: Failure to comply with this section is an offence: see subsection 1311(1) .

SECTION 839J   RELATIONSHIP OF DIVISION WITH OTHER LAWS ETC.  

839J(1)    
Subject to subsection (3) , this Division has effect despite anything in:

(a)    any other law of the Commonwealth or of a State or Territory; or

(b)    any contract, deed, undertaking, agreement or other instrument.

839J(2)    
Without limiting subsection (1) , and subject to subsection (3) , nothing done by or under this Division:

(a)    places a body corporate or other person in breach of contract or confidence or otherwise makes any of them guilty of a civil wrong; or

(b)    places a body corporate or other person in breach of:

(i) any law of the Commonwealth or of a State or Territory; or

(ii) any contractual provision prohibiting, restricting or regulating the assignment or transfer of any asset or liability or the disclosure of any information; or

(c)    releases any surety, wholly or partly, from all or any of the surety ' s obligations.

839J(3)    
Nothing in this Division limits the operation of:

(a)    any of the provisions of the Privacy Act 1988 ; or

(b)    any of the provisions of the Competition and Consumer Act 2010 ; or

(c)    any of the provisions of the Fair Work Act 2009 , the Fair Work (Registered Organisations) Act 2009 , or the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 .

SECTION 839K   RESERVE BANK ' S RULES MAY MAKE SPECIAL PROVISION IN RELATION TO COMPULSORY TRANSFER  

Compulsory transfer of shares

839K(1)    
The Reserve Bank may, by legislative instrument, make rules in relation to any of the following matters in relation to a transfer of shares, or proposed transfer of shares, under this Division:

(a)    the payment to a holder of shares in a target body under this Division of a purchase price for those shares;

(b)    the resolution of disputes involving a holder of shares in a target body under this Division (including the resolution of such disputes by the Federal Court);

(c)    the publication, by the Reserve Bank, the target body and the receiving body, of information relating to a transfer of shares, or proposed transfer of shares, under this Division;

(d)    the freeing of shares in a target body from any trust, liability or other encumbrance when they become shares held by a receiving body;

(e)    any matter incidental to:

(i) a transfer of shares, or proposed transfer of shares, under this Division; or

(ii) any of the other matters mentioned in this subsection.

Compulsory transfer of business

839K(2)    
The Reserve Bank may, by legislative instrument, make rules in relation to any of the following matters in relation to a transfer of business, or proposed transfer of business, under this Division:

(a)    the payment to a target body under this Division of a purchase price for a business;

(b)    the resolution of disputes involving a target body under this Division (including the resolution of such disputes by the Federal Court);

(c)    the publication, by the Reserve Bank, a target body and a receiving body, of information relating to a transfer of business, or proposed transfer of business, under this Division;

(d)    the freeing of assets of a target body from any trust, liability or other encumbrance when they become assets of a receiving body;

(e)    any matter incidental to:

(i) a transfer of business, or proposed transfer of business, under this Division; or

(ii) any of the other matters mentioned in this subsection.

Failure to complywith rules

839K(3)    
A person must comply with the provisions of rules made under this section that apply to the person.

Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .

Division 5 - Directions  

Subdivision A - Directions to manage or respond to crisis  

SECTION 840A   RESERVE BANK ' S DIRECTIONS POWER - MANAGE OR RESPOND TO CRISIS  

840A(1)    
The Reserve Bank may, in writing, give a body corporate a direction to do, or refrain from doing, specified acts or things, if:

(a)    the body corporate:

(i) is a CS facility licensee; or

(ii) is a related body corporate of a CS facility licensee and is incorporated in Australia; or

(iii) was a related body corporate of a CS facility licensee before a transfer of business or shares under this Part and is incorporated in Australia; and

(b)    the Reserve Bank reasonably believes that the direction is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee.

Note: An expert report on fair value may be required before giving the direction: see section 849CB .

840A(2)    
The direction may deal with the time by which, or period during which, it is to be complied with.

840A(3)    
The body corporate must comply with the direction.

Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .

840A(4)    
If the body corporate fails to comply with the direction, the Reserve Bank may apply to the Court for, and the Court may make, an order that the body corporate comply with the direction.

Compliance despite other laws etc.

840A(5)    
The body corporate may do, or refrain from doing, an act or thing to comply with the direction despite all of the following:

(a)    this Act;

(b)    the body corporate ' s constitution;

(c)    any operating rules or procedures of a licensed CS facility of which the body corporate is the licensee;

(d)    any arrangement to which the body corporate is party;

(e)    any listing rules of a financial market in whose official list the body corporate is included.

840A(6)    
Paragraph (5)(c) does not apply in relation to a direction under subsection (1) to amend the operating rules of a licensed CS facility of which the body corporate is the licensee.

SECTION 840B   MATTERS RELATING TO RESERVE BANK DIRECTIONS - MANAGE OR RESPOND TO CRISIS  

Variation or revocation

840B(1)    
The Reserve Bank may, in writing, vary a direction given to a person under subsection 840A(1) if the Reserve Bank reasonably believes that the direction, as varied, would be appropriate to manage or respond to a condition in section 831A being satisfied in relation to the relevant CS facility licensee.

840B(2)    
The Reserve Bank may revoke a direction given to a person under subsection 840A(1) if the Reserve Bank no longer reasonably believes that the direction is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the relevant CS facility licensee, including because the condition is not satisfied.

840B(3)    
The variation or revocation must be given to the person in writing.

Directions are not legislative instruments

840B(4)    
A direction given under subsection 840A(1) , a variation under subsection (1) of this section or a revocation under subsection (2) of this section is not a legislative instrument.

SECTION 840C  

840C   DIRECTIONS TO MANAGE OR RESPOND TO CRISIS - RELATIONSHIP WITH OTHER PROVISIONS  

If a direction under subsection 840A(1) directs a CS facility licensee to change any of the facility ' s operating rules or procedures, neither of the following provisions apply in relation to the change:

(a)    subsection 822D(2) (about change ceasing to have effect if ASIC not notified);

(b)    section 822E (about disallowance).

Note: The licensee would still need to notify ASIC of the change: see subsection 822D(1) .

Subdivision B - Directions to give information to assist crisis management  

SECTION 841A   RESERVE BANK ' S DIRECTIONS POWER - INFORMATION TO ASSIST CRISIS MANAGEMENT  

841A(1)    
The Reserve Bank may, in writing, direct a person to give the Reserve Bank specified information, specified documents, or documents containing specified information, relating to the business of a body corporate if:

(a)    the body corporate:

(i) is a CS facility licensee; or

(ii) is a related body corporate of a CS facility licensee that is incorporated in Australia; or

(iii) was a related body corporate of a CS facility licensee before a transfer of business or shares under this Part and is incorporated in Australia; and

(b)    the Reserve Bank reasonably believes that the information or documents would assist the Reserve Bank to manage or respond to a condition in section 831A being satisfied in relation to the licensee; and

(c)    the Reserve Bank reasonably believes that the person can give the Reserve Bank the information or documents.

Note: The secrecy provision in section 79A of the Reserve Bank Act 1959 applies to information and documents obtained by the Reserve Bank under this section.

841A(2)    
The direction:

(a)    must specify a reasonable time by which, or a reasonable period during which, it is to be complied with; and

(b)    may specify the form and manner in which the information or documents must be given.

841A(3)    
The person must comply with the direction.

Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .

841A(4)    
If the person fails to comply with the direction, the Reserve Bank may apply to the Court for, and the Court may make, an order that the person comply with the direction.

SECTION 841B   MATTERS RELATING TO RESERVE BANK DIRECTIONS - INFORMATION TO ASSIST CRISIS MANAGEMENT  

Variation or revocation

841B(1)    
The Reserve Bank may vary a direction given to a person under subsection 841A(1) if paragraphs 841A(1)(b) and (c) would apply in relation to the direction as varied.

841B(2)    
The Reserve Bank may revoke a direction given to a person under subsection 841A(1) if the Reserve Bank:

(a)    no longer reasonably believes that the specified information, the specified documents or documents containing the specified information would assist the Reserve Bank to manage or respond to a condition in section 831A being satisfied in relation to the relevant CS facility licensee, including because the condition is not satisfied; or

(b)    no longer reasonably believes that the person can give the Reserve Bank the specified information, the specified documents or documents containing the specified information.

841B(3)    
The variation or revocation must be given to the person in writing.

Directions are not legislative instruments

841B(4)    
A direction given under subsection 841A(1) , a variation under subsection (1) of this section or a revocation under subsection (2) of this section is not a legislative instrument.

Division 6 - Moratorium on action during statutory management or compulsory transfer  

Subdivision A - Circumstances to which moratorium is relevant  

SECTION 842A   CIRCUMSTANCES TO WHICH MORATORIUM IS RELEVANT  

842A(1)    
For the purposes of this Division, this section begins to apply to a body corporate if:

(a)    the body corporate begins to be under statutory management; or

(b)    the Reserve Bank makes a determination under section 837A that there is to be a transfer of shares in the body corporate; or

(c)    the Reserve Bank makes a determination under section 837B that there is to be a transfer of business of the body corporate; or

(d)    the Reserve Bank gives a direction to the body corporate under subsection 840A(1) .

842A(2)    
This section ceases to apply to a body corporate at the earliest time, occurring after this section begins to apply to the body corporate, at which:

(a)    the body corporate is not under statutory management; and

(b)    for each determination (if any) the Reserve Bank has made under section 837A that there is to be a transfer of shares in the body corporate, or under section 837B that there is to be a transfer of business of the body corporate:

(i) a certificate issued under section 838A that the transfer is to take effect is in force; or

(ii) a determination made under section 837F that the transfer is not to take effect is in force; and

(c)    no direction (if any) given to the body corporate under subsection 840A(1) remains in force.

842A(3)    
To avoid doubt, subsection (2) does not prevent this section from subsequently beginning to apply to the body corporate again under subsection (1) .

Subdivision B - Stay on enforcement rights triggered by statutory management or compulsory transfer  

SECTION 843A   STAY ON ENFORCING RIGHTS MERELY BECAUSE THE BODY CORPORATE IS UNDER STATUTORY MANAGEMENT OR SUBJECT TO A TRANSFER DETERMINATION  

Stay on enforcing rights

843A(1)    
A right cannot be enforced against a body corporate for:

(a)    the reason that:

(i) the body corporate has come or is under statutory management; or

(ii) the Reserve Bank makes or has made a determination under section 837A that there is to be a transfer of shares in the body corporate; or

(iii) the Reserve Bank makes or has made a determination under section 837B that there is to be a transfer of business of the body corporate; or

(iv) the Reserve Bank gives or has given a direction to the body corporate under subsection 840A(1) ; or

(b)    the reason of the body corporate ' s financial position; or

(c)    a reason that, in substance, is contrary to this subsection or subsection (2) of this section;

if the right arises for that reason by express provision (however described) of an arrangement.

Note: This result is subject to sections 843B and 843C .

Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the body corporate coming under statutory management.

843A(2)    
A right cannot be enforced against a body corporate for a reason that:

(a)    is prescribed by the regulations for the purposes of this paragraph; and

(b)    relates to:

(i) section 842A applying, or possibly applying, to the body corporate in the future; or

(ii) the body corporate ' s financial position;

if the right arises for that reason by express provision (however described) of an arrangement.

Note: This result is subject to sections 843B and 843C .

843A(3)    
However, subsection (2) does not apply at a time if section 842A does not later apply to the body corporate.

Period of the stay

843A(4)    
The right cannot be enforced as described in subsection (1) during the period (the stay period ):

(a)    starting when section 842A begins to apply to the body corporate; and

(b)    ending at the latest of the following times:

(i) when section 842A ceases to apply to the body corporate;

(ii) if one or more orders are made under subsection (6) of this section for the body corporate as the result of an application made before section 842A ceases to apply to the body corporate - when the last made of those orders ceases to be in force.

843A(5)    
The right cannot be enforced as described in subsection (2) of this section during a period (the stay period ) ending at the latest of the following times:

(a)    when section 842A ceases to apply to the body corporate;

(b)    if one or more orders are made under subsection (6) of this section for the body corporate as the result of an application made before section 842A ceases to apply to the body corporate - when the last made of those orders ceases to be in force.

843A(6)    
The Court:

(a)    may order an extension of the period otherwise applying under subsection (4) or (5) of this section for the body corporate if the Court is satisfied that the extension is appropriate having regard to the interests of justice; and

(b)    before deciding an application for an order under paragraph (a) of this subsection, may grant an interim order, but must not require the applicant to give an undertaking as to damages as a condition for doing so.

Enforcing rights after the stay for reasons relating to earlier circumstances

843A(7)    
The right is unenforceable against the body corporate indefinitely after the end of the stay period to the extent that a reason for seeking to enforce the right:

(a)    is the body corporate ' s financial position before the end of the stay period; or

(b)    is any of the following:

(i) the body corporate having come or been under statutory management before the end of the stay period;

(ii) the Reserve Bank having made, before the end of the stay period, a determination under section 837A that there is to be a transfer of shares in the body corporate;

(iii) the Reserve Bank having made, before the end of the stay period, a determination under section 837B that there is to be a transfer of business of the body corporate; or

(iv) the Reserve Bank having given, before the end of the stay period, a direction to the body corporate under subsection 840A(1) ; or

(c)    is a reason, prescribed by the regulations for the purposes of this paragraph, relating to circumstances in existence before the end of the stay period; or

(d)    is a reason referred to in paragraph (1)(c) of this section or subsection (2) .

Note: This result is subject to section 843B .

SECTION 843B   EXCEPTIONS  

843B(1)    
Subsection 843A(1) , (2) or (7) does not apply to enforcing a right against a body corporate if the right is:

(a)    a right under an arrangement entered into after the body corporate comes under statutory management; or

(b)    a right contained in a kind of arrangement:

(i) prescribed by the regulations for the purposes of this subparagraph; or

(ii) declared under paragraph (2)(a) of this section; or

(c)    a right of a kind:

(i) prescribed by the regulations for the purposes of this subparagraph; or

(ii) declared under paragraph (2)(b) ; or

(d)    a right of a kind declared under paragraph (2)(c) , and the circumstances specified in that declaration exist.

843B(2)    
For the purposes of subsection (1) , the Minister may, by legislative instrument:

(a)    declare kinds of arrangements referred to in a specified law of the Commonwealth; or

(b)    declare kinds of rights to which subsection 843A(1) , (2) or (7) does not apply; or

(c)    declare kinds of rights to which subsection 843A(1) , (2) or (7) does not apply in specified circumstances.

843B(3)    
Subsection 843A(1) , (2) or (7) does not apply to enforcing a right to the extent that the Reserve Bank consents in writing to the enforcement of the right.

843B(4)    
Subsection 843A(7) does not apply to enforcing a right against a body corporate to the extent that a liquidator of the body corporate, appointed after the end of the stay period, consents in writing to the enforcement of the right.

SECTION 843C   STAY ON BODY CORPORATE ' S RIGHT TO NEW ADVANCE OF MONEY OR CREDIT  

843C(1)    
If:

(a)    one or more rights of an entity cannot be enforced against a body corporate for a period because of subsection 843A(1) or (2) ; and

(b)    the body corporate has a right under an arrangement against the entity for a new advance of money or credit;

that right of the body corporate cannot be enforced during the same period.

843C(2)    
Subsection (1) of this section does not apply to a right of a body corporate if:

(a)    the body corporate is a related body corporate of the entity mentioned in paragraph (1)(a) ; and

(b)    exercising the right:

(i) constitutes, or constitutes part of, default management; or

(ii) constitutes recovery action; or

(iii) constitutes a funding call on the entity.

SECTION 843D   SELF-EXECUTING PROVISIONS  

843D(1)    
The object of subsection (2) is to ensure that a self-executing provision:

(a)    cannot start to apply against a body corporate for certain reasons; and

(b)    can be the subject of a Court order providing that the provision can only start to apply against a body corporate with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.

843D(2)    
Sections 843A to 843C apply in relation to a self-executing provision in a corresponding way to the way those sections apply in relation to a right. For this purpose, assume those sections apply with such modifications as are necessary, including any prescribed by the regulations for the purposes of this subsection.

Note 1: This subsection achieves the object in subsection (1) by extending the application of all of the outcomes, exceptions and powers in sections 843A to 843C .

Note 2: These modifications include, for example, treating:

(a) a reference that a right cannot be enforced (however described) as including a reference that a self-executing provision cannot start to apply; and

(b) the words " if the right arises for that reason by express provision (however described) of an arrangement " as being omitted from subsections 843A(1) and (2) ; and

(c) a reference that one or more rights are enforceable as including a reference that one or more self-executing provisions can start to apply.

843D(3)    
In this section:

self-executing provision
means a provision of an arrangement that can start to apply automatically:

(a) for one or more reasons; and

(b) without any party to the arrangement making a decision that the provision should start to apply.

SECTION 843E  

843E   WHEN OTHER LAWS PREVAIL - CERTAIN OTHER COMMONWEALTH ACTS  

If there is any inconsistency between sections 843A to 843D and one of the following Acts, that Act prevails to the extent of the inconsistency:

(a)    the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 ;

(b)    the Autonomous Sanctions Act 2011 ;

(c)    the International Interests in Mobile Equipment (Cape Town Convention) Act 2013 ;

(d)    the Payment Systems and Netting Act 1998 .

SECTION 843F  

843F   CIRCUMSTANCES WHERE A TRANSACTION BY STATUTORY MANAGER NOT VOIDABLE UNDER SECTION 588FE  

A transaction of a body corporate is not voidable under section 588FE merely because:

(a)    the transaction was entered into at a time when section 842A applied to the body corporate; and

(b)    the transaction is:

(i) an uncommercial transaction of the body corporate; or

(ii) an unfair preference given by the body corporate to a creditor of the body corporate; or

(iii) an insolvent transaction of the body corporate; or

(iv) a creditor-defeating disposition by the body corporate.

Subdivision C - Protection of body corporate ' s property  

SECTION 844A   WINDING UP BODY CORPORATE  

844A(1)    
Whilesection 842A applies to a body corporate, it cannot be wound up voluntarily.

844A(2)    
The Court is to adjourn the hearing of an application for an order to wind up a body corporate while section 842A applies to the body corporate.

844A(3)    
The Court is not to appoint a provisional liquidator of a body corporate while section 842A applies to the body corporate.

SECTION 844B   RESTRICTIONS ON EXERCISE OF THIRD PARTY PROPERTY RIGHTS  

General rule

844B(1)    
Subject to subsection (2) of this section, while section 842A applies to a body corporate, the restrictions set out in the following table apply in relation to the exercise of the rights of a person (the third party ) in:

(a)    property of the body; or

(b)    other property used or occupied by, or in the possession of, the body, as set out in the table.

Restrictions on exercise of third party rights
Item	Column 1 If the third party is …	Column 2 then …
1	(a)	a secured party in relation to property of the body corporate; and	the third party cannot enforce the security interest.
	(b)	is not otherwise covered by this table
2	a secured party in relation to a possessory security interest in the property of the body corporate	the third party cannot sell the property, or otherwise enforce the security interest.
3	a lessor of property used or occupied by, or in the possession of, the body corporate, including a secured party (a PPSA secured party ) in relation to a PPSA security interest in goods arising out of a lease of the goods	the following restrictions apply:
		(a)	distress for rent must not be carried out against the property;
		(b)	the third party cannot take possession of the property or otherwise recover it;
		(c)	if the third party is a PPSA secured party - the third party cannot otherwise enforce the security interest.
4	an owner (other than a lessor) of property used or occupied by, or in the possession of, the body corporate, including a secured party (a PPSA secured party ) in relation to a PPSA security interest in the property	the following restrictions apply:
		(a)	the third party cannot take possession of the property or otherwise recover it;
		(b)	if the third party is a PPSA secured party - the third party cannot otherwise enforce the security interest.

Note: The property of the body includes any PPSA retention of title property of the body corporate.

Exceptions

844B(2)    
The restrictions set out in the table in subsection (1) do not apply in relation to the exercise of a third party ' s rights in property if the rights are:

(a)    exercised:

(i) with the Reserve Bank ' s written consent; or

(ii) if the body corporate to which section 842A applies is under statutory management - with the statutory manager ' s written consent; or

(iii) with the leave of the Court; or

(b)    contained in a kind of arrangement prescribed by the regulations for the purposes of this paragraph.

Possessory security interests - continued possession

844B(3)    
If:

(a)    a body corporate ' s property is subject to a possessory security interest; and

(b)    the property is in the lawful possession of the secured party;

the secured party may continue to possess the property while section 842A applies to the body corporate.

Payment Systems and Netting Act 1998 prevails over this section

844B(4)    
If there is any inconsistency between:

(a)    subsections (1) and (3) of this section; and

(b)    the Payment Systems and Netting Act 1998 ;

that Act prevails to the extent of the inconsistency.

SECTION 844C   STAY OF PROCEEDINGS  

844C(1)    
While section 842A applies to a body corporate, a proceeding in a court against the body or in relation to any of its property cannot be begun or proceeded with, except:

(a)    with the Reserve Bank ' s written consent; or

(b)    with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

844C(2)    
Subsection (1) does not apply to:

(a)    a criminal proceeding; or

(b)    a prescribed proceeding.

844C(3)    
If a person applies for the leave of the Court under paragraph (1)(b) , the person must, in writing, notify the Reserve Bank.

844C(4)    
The Reserve Bank is entitled to be heard on the application to the Court.

SECTION 844D  

844D   RESERVE BANK AND STATUTORY MANAGER NOT LIABLE IN DAMAGES FOR REFUSING CONSENT  

The Reserve Bank or a statutory manager of a body corporate is not liable to an action or other proceeding for damages in respect of a refusal to give an approval or consent for the purposes of this Subdivision.

SECTION 844E   SUSPENSION OF ENFORCEMENT PROCESS  

844E(1)    
While section 842A applies to a body corporate, no enforcement process in relation to property of the body corporate can be begun or proceeded with, except:

(a)    with the leave of the Court; and

(b)    in accordance with such terms (if any) as the Court imposes.

844E(2)    
If a person applies for the leave of the Court under subsection (1) , the person must, in writing, notify the Reserve Bank.

844E(3)    
The Reserve Bank is entitled to be heard on the application to the Court.

SECTION 844F   DUTIES OF COURT OFFICER IN RELATION TO PROPERTY OF A BODY CORPORATE  

844F(1)    
This section applies if an officer of a court (in this section called the court officer ),being:

(a)    a sheriff; or

(b)    the registrar or other appropriate officer of the court;

receives written notice of the fact that section 842A applies to a body corporate.

844F(2)    
While section 842A applies to a body corporate, the court officer cannot:

(a)    take action to sell property of the body corporate under a process of execution; or

(b)    pay to a person (other than the statutory manager (if any)):

(i) proceeds of selling property of the body corporate (at any time) under a process of execution; or

(ii) money of the body corporate seized (at any time) under a process of execution; or

(iii) money paid (at any time) to avoid seizure or sale of property of the body corporate under a process of execution; or

(c)    take action in relation to the attachment of a debt due to the body corporate; or

(d)    pay to a person (other than the statutory manager (if any)) money received because of the attachment of such a debt.

844F(3)    
If the body corporate is under statutory management, the court officer must:

(a)    deliver to the statutory manager any property of the body corporate that is in the court officer ' s possession under a process of execution (whenever begun); and

(b)    pay to the statutory manager all proceeds or money of a kind referred to in paragraph (2)(b) or (d) that:

(i) are in the court officer ' s possession; or

(ii) have been paid into the court and have not since been paid out.

844F(4)    
The costs of the execution or attachment are a first charge on property delivered under paragraph (3)(a) or proceeds or money paid under paragraph (3)(b) .

844F(5)    
In order to give effect to a charge under subsection (4) on proceeds or money, the court officer may retain, on behalf of the person entitled to the charge, so much of the proceeds or money as the court officer thinks necessary.

844F(6)    
The Court may, if it is satisfied that it is appropriate to do so, permit the court officer to take action, or to make a payment, that subsection (2) would otherwise prevent.

844F(7)    
A person who buys property in good faith under a sale under a process of execution gets a good title to the property as against the body corporate and the statutory manager (if any), despite anything else in this section.

Subdivision D - General power to make orders  

SECTION 845A   GENERAL POWER TO MAKE ORDERS  

845A(1)    
The Court may make such orders as it thinks appropriate about how this Division is to operate in relation to a particular body corporate.

845A(2)    
An order may be made subject to conditions.

845A(3)    
An order may be made on the application of:

(a)    the body corporate; or

(b)    a creditor of the body corporate; or

(c)    a statutory manager of the body corporate; or

(d)    the Reserve Bank; or

(e)    any other interested person.

Division 7 - Funding for crisis resolution  

SECTION 846A   AUTHORISING ARRANGEMENTS FOR THE PURPOSES OF CRISIS RESOLUTION  

Authorising the making of arrangements

846A(1)    
If one or more conditions in section 831A are satisfied in relation to a CS facility licensee, the Minister may, by legislative instrument and with the Finance Minister ' s written approval, authorise the making of arrangements by the Commonwealth, for the purposes of:

(a)    protecting the stability of the financial system in Australia; or

(b)    if the licensee is incorporated in Australia - ensuring the continuity of one or more clearing and settlement facility services provided by the licensee that are critical to the functioning of the financial system in Australia.

Limit on total amounts payable under authorised contracts etc.

846A(2)    
The authorisation must specify the amount (if any) the Commonwealth may pay under the authorised arrangements.

846A(3)    
The total of all the amounts specified under subsection (2) in authorisations (taking account of any amendments of those authorisations) in relation to the condition or conditions being satisfied must not exceed $5,000,000,000.

Note: See also section 71 of the Public Governance, Performance and Accountability Act 2013 (approval of proposed expenditure by a Minister).

Amending specification of amount

846A(4)    
The Minister may, by legislative instrument and with the Finance Minister's written approval, amend an authorisation made under this section, but only to change the specification of an amount under subsection (2) , within the limit set out in subsection (3) .

Authorisation cannot be revoked

846A(5)    
The Minister cannot revoke an authorisation made under this section.

Authorisation or amendment not disallowable

846A(6)    
Section 42 (disallowance) of the Legislation Act 2003 does not apply to an authorisation or amendment made under this section.

When authorisation or amendment commences

846A(7)    
An authorisation or amendment made under this section commences at the time it is made.

846A(8)    
Section 12 of the Legislation Act 2003 does not apply to an authorisation or amendment made under this section.

SECTION 846B  

846B   APPROPRIATION OF CONSOLIDATED REVENUE FUND  

The Consolidated Revenue Fund is appropriated for the purposes of making a payment under an arrangement authorised under section 846A .

Division 8 - Cross-border crisis resolution  

SECTION 847A   RESERVE BANK MAY RECOGNISE CRISIS RESOLUTION OF FOREIGN OPERATOR OF A CLEARING AND SETTLEMENT FACILITY  

847A(1)    
Subject to subsection (6) , the Reserve Bank may take action in accordance with this Part in relation to a CS facility licensee whose licence was granted under subsection 824B(2) (overseas clearing and settlement facilities) if an instrument made under subsection (2) of this section is in force in relation to the licensee.

Recognition of requests

847A(2)    
For the purposes of subsection (1) , the Reserve Bank may, by notifiable instrument, recognise a request by an authority that is responsible for regulating the operation of a clearing and settlement facility by a CS facility licensee in a foreign jurisdiction, if:

(a)    the Reserve Bank reasonably believes that the authority:

(i) is exercising; or

(ii) intends to exercise; or

(iii) is considering exercising;

powers to manage or respond to an event relating to the licensee that is likely to pose a threat to the stability of the financial system in the foreign jurisdiction; and

(b)    the request is for the Reserve Bank to exercise powers under this Part to assist the authority to manage or respond to the event.

847A(3)    
The Reserve Bank may, by notifiable instrument, revoke an instrument made under subsection (2) recognising a request by an authority in relation to a CS facility licensee if:

(a)    the authority terminates or withdraws the request; or

(b)    the Reserve Bank no longer reasonably believes that the authority:

(i) is exercising; or

(ii) intends to exercise; or

(iii) is considering exercising;

powers to manage or respond to an event relating to the licensee that is likely to pose a threat to the stability of the financial system in the foreign jurisdiction.

847A(4)    
Subsection (3) does not limit the application of subsection 33(3) of the Acts Interpretation Act 1901 in relation to an instrument in force under subsection (2) of this section.

Responding to requests

847A(5)    
Subject to subsection (6) , if the condition in subsection (1) is satisfied in relation to a CS facility licensee (the overseas licensee ), this Part applies in relation to the overseas licensee as if:

(a)    a reference in this Part to managing or responding to a condition in section 831A being satisfied in relation to a CS facility licensee were a reference to responding to the request mentioned in subsection (2) of this section in relation to the overseas licensee; and

(b)    a reference in this Part to a condition in section 831A not being satisfied in relation to a CS facility licensee were a reference to the instrument made under subsection (2) of this section in relation to the overseas licensee having been revoked.

Excluded provisions

847A(6)    
A reference in this section to this Part does not include a reference to:

(a)    Division 3 (statutory management); or

(b)    section 837A (compulsory transfer of shares); or

(c)    Division 7 (funding for crisis resolution); or

(d)    section 849AA (winding up).

Division 9 - Other matters  

Subdivision A - Secrecy determinations  

SECTION 848A   DETERMINATIONS THAT INFORMATION IS COVERED BY SECRECY PROVISION  

848A(1)    
The Reserve Bank may determine, in writing, that specified information is covered by this subsection if:

(a)    the information is:

(i) information that reveals the fact that a specified direction given to a body corporate under subsection 840A(1) was given; or

(ii) information that is, or is contained in a specified document, given to a body corporate covered by subsection (2) of this section by the Reserve Bank in the exercise of a power or the performance of a function under this Part; and

(b)    the Reserve Bank reasonably believes that the determination is appropriate to manage or respond to a condition in section 831A being satisfied in relation to a CS facility licensee.

848A(2)    
A body corporate is covered by this section if it is incorporated in Australia and it:

(a)    is a CS facility licensee; or

(b)    is a related body corporate of a CS facility licensee; or

(c)    was a related body corporate of a CS facility licensee before a transfer of business or shares under this Part; or

(d)    is a body corporate to which information has been provided under section 839B in relation to a transfer.

848A(3)    
As soon as practicable after making the determination, the Reserve Bank must give the body corporate to which the determination relates a copy of the determination.

848A(4)    
As soon as practicable after the Reserve Bank gives the body corporate a copy of the determination under subsection (3) , the body corporate must:

(a)    take reasonable steps to discover who is covered by paragraphs 848C(2)(a) and (b) in relation to the information specified in the determination; and

(b)    if it is practicable to do so - give a copy of the determination to each person who the body corporate believes to be so covered.

Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .

Reserve Bank must consider other determinations

848A(5)    
If the Reserve Bank makes a determination under subsection (1) of this section, the Reserve Bank must consider whether to also make a determination under section 848E (determination allowing disclosure by specified persons).

Determination not a legislative instrument

848A(6)    
An instrument made under subsection (1) is not a legislative instrument.

SECTION 848B   VARIATION OR REVOCATION OF DETERMINATIONS  

848B(1)    
The Reserve Bank may, in writing, vary a determination made under subsection 848A(1) if paragraphs 848A(1)(a) and (b) would apply in relation to the direction as varied.

848B(2)    
The Reserve Bank may, in writing, revoke a determination made under subsection 848A(1) .

848B(3)    
As soon as practicable after making the variation or revocation, the Reserve Bank must give the body corporate to which the determination relates a copy of the variation or revocation.

848B(4)    
As soon as practicable after the Reserve Bank gives the body corporate a copy of the variation or revocation under subsection (3) , the body corporate must:

(a)    if it is practical to do so - give a copy of the variation or revocation to each person to whom the body corporate gave:

(i) a copy of the determination under paragraph 848A(4)(b) ; or

(ii) a copy of an earlier variation of the determination (if any) under this paragraph; or

(iii) a copy of the determination as previously varied (if applicable) under paragraph (b) of this subsection; and

(b)    in the case of a variation that results in additional information being specified in the determination:

(i) take reasonable steps to discover who is covered by paragraphs 848C(2)(a) and (b) in relation to the additional information (and is not covered by paragraph (a) of this subsection); and

(ii) if it is practicable to do so - give a copy of the determination, as varied, to each person who the body corporate believes to be so covered.

Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .

848B(5)    
A variation or revocation under this section is not a legislative instrument.

SECTION 848C   PROHIBITION ON DISCLOSING INFORMATION COVERED BY SECRECY PROVISION  

Offence

848C(1)    
A person must not disclose information if:

(a)    the information is covered by a determination made under subsection 848A(1) ; and

(b)    the person is, or has been, covered by subsection (2) of this section in relation to the information.

Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .

848C(2)    
A person is covered by this subsection in relation to the information if the person is:

(a)    the body corporate to which the determination made under subsection 848A(1) relates; or

(b)    at or after the time when the Reserve Bank gave the direction or information:

(i) an officer; or

(ii) an employee; or

(iii) a contractor; or

(iv) a statutory manager (other than the Reserve Bank);

of the body corporate to which the determination relates; or

(c)    any other person who, because of their employment, or in the course of that employment, has acquired the information covered by the determination.

Exception

848C(3)    
Subsection (1) does not apply if:

(a)    the disclosure is authorised by section 848D , 848E , 848F , 848G , 848H , 848J or 848K ; or

(b)    the disclosure is required by an order or direction of a court or tribunal.

Note: A defendant bears an evidential burden in relation to a matter in this subsection: see subsection 13.3(3) of the Criminal Code .

Civil penalty

848C(4)    
A person contravenes this subsection if the person contravenes subsection (1) .

Note: This subsection is a civil penalty provision: see section 1317E .

SECTION 848D  

848D   DISCLOSURE OF PUBLICLY AVAILABLE INFORMATION  

A person covered by subsection 848C(2) in relation to information may disclose the information, to the extent that the information has already been lawfully made available to the public.

SECTION 848E   DISCLOSURE ALLOWED BY THE RESERVE BANK  

848E(1)    
A person covered by subsection 848C(2) in relation to information may disclose the information if:

(a)    a determination made under subsection (2) or (4) of this section allows the disclosure by the person; and

(b)    if the Reserve Bank has included conditions in the determination - those conditions are satisfied.

Determinations relating to specified persons

848E(2)    
The Reserve Bank may, in writing, make a determination allowing:

(a)    a specified person covered by subsection 848C(2) in relation to specified information; or

(b)    a specified person covered by subsection 848C(2) in relation to information that is in a specified class of information;

to disclose the specified information, the information that is in the specified class of information, or a specified part of such information.

848E(3)    
The Reserve Bank must give a copy of the determination, as soon as practicable after making it, to:

(a)    the body corporate to which the determination made under subsection 848A(1) relates; and

(b)    the person specified, or each person specified, in the determination.

Determinations relating to specified classes of persons

848E(4)    
The Reserve Bank may, in writing, make a determination allowing:

(a)    a specified class of persons covered by subsection 848C(2) in relation to specified information; or

(b)    a specified class of persons covered by subsection 848C(2) in relation to information that is in a specified class of information;

to disclose the specified information, the information that is in the specified class of information, or a specified part of such information.

848E(5)    
The Reserve Bank must, as soon as practicable after making the determination under subsection (4) :

(a)    give a copy of the determination to the body corporate to which the determination made under subsection 848A(1) relates; and

(b)    take reasonable steps to discover who is in the class of persons specified in the determination; and

(c)    if it is practicable to do so - give a copy of the determination to each person who the Reserve Bank believes to be in that class.

Conditions in determinations

848E(6)    
The Reserve Bank may include conditions in a determination made under subsection (2) or (4) that relate to any of the following:

(a)    the kind of entities to which the disclosure may be made;

(b)    the way in which the disclosure is to be made;

(c)    any other matter that the Reserve Bank considers appropriate.

Determination not a legislative instrument

848E(7)    
A determination made under subsection (2) or (4) is not a legislative instrument.

SECTION 848F   DISCLOSURE FOR THE PURPOSE OF SEEKING REVIEW OR LEGAL ADVICE  

848F(1)    
A person covered by subsection 848C(2) in relation to information referred to in subparagraph 848A(1)(a)(i) may disclose the information if the disclosure is made for the purposes of seeking review of:

(a)    the direction; or

(b)    a decision made in relation to the direction.

848F(2)    
A person covered by subsection 848C(2) in relation to any information may disclose the information if:

(a)    the disclosure is to the person's lawyer; and

(b)    the purpose of the person making the disclosure is for the lawyer to provide legal advice, or another legal service, in relation to the direction.

SECTION 848G   DISCLOSURE UNDER THE RESERVE BANK ACT  

848G(1)    
A person covered by subsection 848C(2) in relation to information may disclose the information if:

(a)    the person is:

(i) an officer (within the meaning of subsection 79A(1) of the Reserve Bank Act 1959 ); or

(ii) a Commonwealth officer (within the meaning of the Crimes Act 1914 ) who acquired the information because of, or in the course of, the Commonwealth officer ' s employment (other than employment with the body corporate to which the relevant determination made under subsection 848A(1) of this Act relates); and

(b)    the information is protected information (within the meaning of subsection 79A(1) of the Reserve Bank Act 1959 ); and

(c)    the disclosure is not prohibited under subsection 79A(2) of the Reserve Bank Act 1959 .

848G(2)    
For the purposes of subsection (1) of this section:

(a)    treat a reference in the definition of protected information in subsection 79A(1) of the Reserve Bank Act 1959 to information disclosed or obtained in the course of, or for the purposes of, the performance or exercise of the functions or powers of the Reserve Bank under this Part as including a reference to information referred to in paragraph 848A(1)(a) of this Act; and

(b)    subparagraph (e)(i) of the definition of officer in subsection 79A(1) of the Reserve Bank Act 1959 applies, in relation to information that is protected information only because of paragraph (a) of this subsection, as if the reference in paragraph (e) of that definition to employment or engagement were a reference to employment or engagement:

(i) with the Reserve Bank; or

(ii) for the purposes of assisting the Reserve Bank in the performance or exercise of its functions or powers; and

(c)    treat a reference in subsection 79A(2) of the Reserve Bank Act 1959 to a person who is or has been an officer as including a reference to a person to whom subparagraph (1)(a)(ii) of this section applies.

848G(3)    
Disclosure of information is not an offence under subsection 79A(2) of the Reserve Bank Act 1959 if the disclosure is authorised by section 848D , 848E , 848F , 848H , 848J or 848K of this Act.

Note: A defendant bears an evidential burden in relation to the matters in this subsection: see subsection 13.3(3) of the Criminal Code .

SECTION 848H  

848H   DISCLOSURE UNDER THE ASIC ACT  

A person covered by subsection 848C(2) in relation to information may disclose the information if:

(a)    the person is:

(i) a member of ASIC; or

(ii) an ASIC staff member; or

(iii) a Commonwealth officer (within the meaning of the Crimes Act 1914 ) who acquired the information because of, or in the course of, the Commonwealth officer ' s employment as a Commonwealth officer (other than employment with the body corporate to which the relevant determination made under subsection 848A(1) of this Act relates); and

(b)    the information is protected information (within the meaning of subsection 127(9) of the ASIC Act); and

(c)    the disclosure is authorised use and disclosure of the information for the purposes of subsection 127(1) of that Act.

Note: A disclosure of information permitted by section 848D , 848E , 848F , 848G , 848J or 848K of this Act is authorised use and disclosure because of subsection 127(2) of the ASIC Act.

SECTION 848J   DISCLOSURE IN CIRCUMSTANCES DETERMINED BY THE MINISTER  

848J(1)    
A person covered by subsection 848C(2) in relation to information may disclose the information if the disclosure is made in circumstances (if any) determined under subsection (2) of this section.

848J(2)    
The Minister may, by legislative instrument, determine circumstances for the purpose of subsection (1) .

SECTION 848K  

848K   DISCLOSURE FOR SAME PURPOSE  

A person covered by subsection 848C(2) (the relevant person ) in relation to information may disclose the information if:

(a)    another person covered by subsection 848C(2) in relation to the information disclosed the information to the relevant person for a particular purpose in accordance with section 848E , 848F , 848G , 848H or 848J , or in accordance with a previous operation of this section; and

(b)    the disclosure by the relevant person is for the same purpose.

SECTION 848L  

848L   EXCEPTIONS OPERATE INDEPENDENTLY  

Sections 848D , 848E , 848F , 848G , 848H , 848J and 848K do not limit each other.

Subdivision B - Other powers of Reserve Bank  

SECTION 849AA   RESERVE BANK MAY APPLY FOR BODY CORPORATE TO BE WOUND UP  

849AA(1)    
The Reserve Bank may apply under section 459P to the Court for an order that a body corporate be wound up in insolvency if:

(a)    a condition in section 831A is satisfied in relation to a CS facility licensee; and

(b)    the body corporate:

(i) is the CS facility licensee; or

(ii) is a related body corporate of the CS facility licensee and is incorporated in Australia; or

(iii) was a related body corporate of the CS facility licensee before a transfer of business or shares under this Part and is incorporated in Australia; and

(c)    the Reserve Bank considers that the body corporate is insolvent and could not be restored to solvency within a reasonableperiod.

849AA(2)    
If the Reserve Bank makes an application under section 459P , the Reserve Bank must inform ASIC of the application as soon as possible.

SECTION 849AB   RESERVE BANK MAY REQUEST ASIC TO MAKE RULES OR GIVE DIRECTIONS  

Rules

849AB(1)    
If the Reserve Bank reasonably believes that:

(a)    making a market integrity rule or CS facility rule (including a rule amending or revoking another market integrity rule or CS facility rule); or

(b)    giving or varying a direction under subsection 794AA(1) , 794AB(1) , 798JB(1) or 798JC(1) ;

is appropriate to manage or respond to a condition in section 831A being satisfied in relation to a CS facility licensee, the Reserve Bank may, by written notice, request ASIC to make the rule or give or vary the direction.

849AB(2)    
A request for ASIC to give or vary a direction must include a statement setting out the Reserve Bank ' s reasons for the request.

Subdivision C - Temporary suspension of termination rights  

SECTION 849BA   APPLICATION OF THIS SUBDIVISION  

849BA(1)    
This Subdivision applies to a body corporate if:

(a)    the body corporate:

(i) is a CS facility licensee; or

(ii) is a related body corporate of a CS facility licensee and is incorporated in Australia; and

(b)    a declaration under subsection (2) is in force in relation to the licensee.

849BA(2)    
For the purposes of paragraph (1)(b) , the Reserve Bank may, by notifiable instrument, declare that this Subdivision applies in relation to a CS facility licensee if the Reserve Bank intends:

(a)    to take either or both of the actions in subsection 832A(2) in relation to the CS facility licensee; or

(b)    to make a determination under section 837A that there is to be a transfer of shares in the CS facility licensee; or

(c)    to make a determination under section 837B that there is to be a transfer of business of the CS facility licensee; or

(d)    to give a direction to the CS facility licensee under subsection 840A(1) .

849BA(3)    
The Reserve Bank must revoke a declaration made under subsection (2) in relation to a CS facility licensee if:

(a)    the licensee begins to be under statutory management; or

(b)    the Reserve Bank makes the determination mentioned in paragraph (2)(b) or (c) ; or

(c)    the Reserve Bank gives the direction mentioned in paragraph (2)(d) ; or

(d)    the Reserve Bank ceases intending to do the things mentioned paragraphs (2)(a) to (d) .

Note: If paragraph (a) , (b) or (c) of this subsection applies, Division 6 (moratorium on action during statutory management or compulsory transfer) will apply in relation to the CS facility licensee.

849BA(4)    
Subsection (3) does not limit the application of subsection 33(3) of the Acts Interpretation Act 1901 in relation to a declaration in force under subsection (2) of this section.

SECTION 849BB   STAY ON EXERCISING TERMINATION RIGHTS  

Stay on exercising termination rights

849BB(1)    
Subject to subsections (2) and (4) , a right to terminate:

(a)    an arrangement; or

(b)    an obligation under an arrangement;

that arises:

(c)    by express provision (however described) of an arrangement; or

(d)    because of anything done in accordance witha direction given under section 823F ;

cannot be exercised if a body corporate to which this Subdivision applies is a party to the arrangement.

Rights not subject to the stay

849BB(2)    
Subsection (1) does not apply to the right if it is:

(a)    a right that is exercisable only in particular circumstances (other than circumstances relating to the manner in which the right is exercised, such as a requirement relating to giving notice about exercising the right); or

(b)    a right:

(i) under an arrangement entered into after this Subdivision begins to apply to the body corporate; or

(ii) that arises because of anything done in accordance with a direction given, after this Subdivision begins to apply to the body corporate, under section 823F ; or

(c)    a right contained in a kind of arrangement:

(i) prescribed by the regulations for the purposes of this subparagraph; or

(ii) declared under paragraph (3)(a) of this section; or

(d)    a right of a kind:

(i) prescribed by the regulations for the purposes of this subparagraph; or

(ii) declared under paragraph (3)(b) ; or

(e)    a right of a kind declared under paragraph (3)(c) , and the circumstances specified in that declaration exist.

849BB(3)    
For the purposes of subsection (2) , the Minister may, by legislative instrument:

(a)    declare kinds of arrangements referred to in a specified law of the Commonwealth; or

(b)    declare kinds of rights to which subsection (1) does not apply; or

(c)    declare kinds of rights to which subsection (1) does not apply in specified circumstances.

849BB(4)    
Subsection (1) does not apply to the exercise of a right if, before the exercise of the right:

(a)    the Reserve Bank; or

(b)    if a liquidator of the body corporate is appointed after this Subdivision ceases to apply to the body corporate - the liquidator;

consents in writing to the exercise of the right.

SECTION 849BC   SELF-EXECUTING PROVISIONS  

849BC(1)    
The object of subsection (2) is to ensure that a self-executing provision:

(a)    cannot start to apply for certain reasons; and

(b)    can be the subject of a Court order providing that the provision can only start to apply with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.

849BC(2)    
Section 849BB applies in relation to a self-executing provision in a corresponding way to the way that section applies in relation to a right to terminate:

(a)    an arrangement; or

(b)    an obligation under an arrangement.

For this purpose, assume that section applies with such modifications as are necessary, including any prescribed by the regulations for the purposes of this subsection.

Note 1: This subsection achieves the object in subsection (1) by extending the application of all of the outcomes, exceptions and powers in section 849BB .

Note 2: These modifications include, for example, treating:

(a) a reference that a right cannot be exercised as including a reference that a self-executing provision cannot start to apply; and

(b) a reference that one or more rights are exercisable as including a reference that one or more self-executing provisions can start to apply.

849BC(3)    
In this section:

self-executing provision
means a provision of an arrangement that:

(a) can start to apply automatically:

(i) for one or more reasons; and

(ii) without any party to the arrangement making a decision that the provision should start to apply; and

(b) terminates:

(i) an arrangement; or

(ii) an obligation under an arrangement.

SECTION 849BD  

849BD   WHEN OTHER LAWS PREVAIL - CERTAIN OTHER COMMONWEALTH ACTS  

If there is any inconsistency between sections 849BB and 849BC and one of the following Acts, that Act prevails to the extent of the inconsistency:

(a)    the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 ;

(b)    the Autonomous Sanctions Act 2011 ;

(c)    the International Interests in Mobile Equipment (Cape Town Convention) Act 2013 ;

(d)    the Payment Systems and Netting Act 1998 .

SECTION 849BE  

849BE   CIRCUMSTANCES WHERE A TRANSACTION BY STATUTORY MANAGER NOT VOIDABLE UNDER SECTION 588FE  

A transaction of a body corporate is not voidable under section 588FE merely because:

(a)    the transaction was entered into at a time when this Subdivision applied to the body corporate; and

(b)    the transaction is:

(i) an uncommercial transaction of the body corporate; or

(ii) an unfair preference given by the body corporate to a creditor of the body corporate; or

(iii) an insolvent transaction of the body corporate; or

(iv) a creditor-defeating disposition by the body corporate.

SECTION 849BF   GENERAL POWER TO MAKE ORDERS  

849BF(1)    
The Court may make such orders as it thinks appropriate about how this Subdivision is to operate in relation to a particular body corporate.

849BF(2)    
An order may be made subject to conditions.

849BF(3)    
An order may be made on the application of:

(a)    the body corporate; or

(b)    a creditor of the body corporate; or

(c)    a statutory manager of the body corporate; or

(d)    the Reserve Bank; or

(e)    any other interested person.

Subdivision D - Other matters  

SECTION 849CA   RESERVE BANK MAY OBJECT TO EXERCISE OF CERTAIN POWERS BY ASIC DURING CRISIS RESOLUTION  

849CA(1)    
ASIC must not take action mentioned in subsection (2) in relation to a body corporate to which subsection (3) applies unless the Reserve Bank has, by written notice given to ASIC, informed ASIC that the Reserve Bank does not object to the action.

849CA(2)    
For the purposes of subsection (1) , the actions are the following:

(a)    making market integrity rules or CS facility rules that the body corporate must comply with, other than a rule the Reserve Bank requests ASIC to make under subsection 849AB(1) ;

(b)    giving a direction under section 794A , 794D , 794E , 798J , 823A or 823D to the body corporate;

(c)    varying a direction mentioned in paragraph (b) of this subsection;

(d)    an action prescribed by the regulations for the purposes of this paragraph in relation to the body corporate.

849CA(3)    
This subsection applies in relation to a body corporate if:

(a)    the body corporate is under statutory management; or

(b)    all of the following subparagraphs apply:

(i) the Reserve Bank has made a determination under section 837A that there is to be a transfer of shares in the body corporate;

(ii) a certificate issued under section 838A that the transfer is to take effect has not come into force;

(iii) the Reserve Bank has not determined under section 837F that the transfer is not to take effect; or

(c)    all of the following subparagraphs apply:

(i) the Reserve Bank has made a determination under section 837B that there is to be a transfer of business of the body corporate;

(ii) a certificate issued under section 838A that the transfer is to take effect has not come into force;

(iii) the Reserve Bank has not determined under section 837F that the transfer is not to take effect; or

(d)    a direction given to the body corporate by the Reserve Bank under subsection 840A(1) is in force; or

(e)    the body corporate is:

(i) a related body corporate of a CS facility licensee to which paragraph (a) , (b) , (c) or (d) of this subsection applies; or

(ii) a market licensee that has clearing and settlement arrangements with a CS facility licensee to which paragraph (a) , (b) , (c) or (d) applies for the clearing and settlement of transactions through a clearing and settlement facility operated by the CS facility licensee.

Ministerial consideration of action

849CA(4)    
If:

(a)    ASIC has asked the Reserve Bank whether the Reserve Bank, for the purposes of subsection (1) , does not object to an action; and

(b)    the Reserve Bank has not, by written notice given to ASIC, informed ASIC that the Reserve Bank does not object to the action;

ASIC may refer the matter to the Minister.

849CA(5)    
The Minister may, after being referred the matter, direct the Reserve Bank to inform ASIC, by written notice given to ASIC, that the Reserve Bank does not object to the action.

849CA(6)    
The Reserve Bank must comply with the direction given under subsection (5) immediately.

Actions begun before crisis resolution

849CA(7)    
To avoid doubt, subsection (1) does not affect the validity or application of anything done by ASIC before subsection (3) began to apply in relation to the body corporate.

SECTION 849CB   EXPERT REPORT FOR ACQUISITION OR DISPOSAL OF ASSETS  

849CB(1)    
This section applies if:

(a)    a statutory manager of a body corporate proposes to:

(i) take action under subsection 833D(1) (recapitalisation actions); or

(ii) otherwise take action on behalf of the body corporate to dispose of a business of the body corporate; or

(iii) otherwise take action on behalf of the body corporate to acquire or dispose of an asset (excluding an action to be taken in the ordinary course of the body corporate ' s business); or

(b)    the Reserve Bank proposes to make:

(i) a determination under section 837A that there is to be a transfer of shares in the body corporate; or

(ii) a determination under section 837B that there is to be a transfer of business of the body corporate; or

(c)    the Reserve Bank proposes to direct a body corporate under subsection 840A(1) :

(i) to recapitalise; or

(ii) to take other action to dispose of a business of the body corporate; or

(iii) to take other action to acquire or dispose of an asset (excluding an action to be taken in the ordinary course of the body corporate ' s business);

or to vary a direction under subsection 840B(1) such that, following the variation, the direction will include a direction of the kind mentioned in subparagraph (i) , (ii) or (iii) of this paragraph.

Note: For example, a report may be required for some actions taken under section 833A .

Expert report

849CB(2)    
Before determining terms for an action referred to in subsection (1) , the statutory manager or Reserve Bank (as the case may be) must obtain, and consider, a report from an expert on:

(a)    if the action is an action referred to in paragraph (1)(a) or (c) - the fair value of the business or asset concerned; or

(b)    if the action isan action referred to in paragraph (1)(b) - the fair value of the business, part of the business or shares to be transferred.

849CB(3)    
The expert must not be an associate of:

(a)    the body corporate; or

(b)    if the action is to be taken by a statutory manager (other than the Reserve Bank) - the statutory manager.

Publication

849CB(4)    
The Reserve Bank may publish details of, or relating to, the report.

Exemption from obtaining expert report

849CB(5)    
Despite subsection (2) , the Reserve Bank need not obtain the report if the Reserve Bank reasonably believes that obtaining the report is likely to pose a threat to:

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

(b)    the continuity of one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia.

Contravention does not invalidate act

849CB(6)    
A contravention of subsection (2) does not affect the validity of anything referred to in subsection (1) .

SECTION 849CC   EXERCISE OF RESERVE BANK POWERS UNDER THIS PART NOT GROUNDS FOR DENIAL OF OBLIGATIONS  

849CC(1)    
Subject to subsection (5) , this section applies if a body corporate (the protected body corporate ) is party to an arrangement, whether the proper law of the arrangement is:

(a)    Australian law; or

(b)    foreign law, including the law of part of a foreign country.

849CC(2)    
None of the matters mentioned in subsection (3) allows the arrangement, or a party to the arrangement (other than the protected body corporate), to do any of the following:

(a)    deny any obligation under the arrangement;

(b)    accelerate any debt under the arrangement;

(c)    terminate or close out:

(i) the arrangement; or

(ii) any transaction relating to the arrangement;

(d)    enforce any security under the arrangement.

849CC(3)    
The matters are as follows:

(a)    the protected body corporate being subject to the exercise of a power under this Part by the Reserve Bank;

(b)    a body corporate to which subsection (4) applies being subject to the exercise of a power under this Part by the Reserve Bank;

(c)    if section 842A applies to a body corporate to which subsection (4) of this section applies - the financial position of:

(i) that body corporate; or

(ii) any other body corporate to which that subsection applies.

849CC(4)    
For the purposes of paragraph (3)(b) or (c) , this subsection applies to:

(a)    a related body corporate of the protected body corporate; or

(b)    a body corporate that was a related body corporate of the protected body corporate before a transfer of business or shares under this Part.

Payment Systems and Netting Act 1998 prevails over this section

849CC(5)    
If there is any inconsistency between:

(a)    subsections (1) to (4) of this section; and

(b)    the Payment Systems and Netting Act 1998 ;

that Act prevails to the extent of the inconsistency.

Arrangements to which this section does not apply

849CC(6)    
This section does not apply to a kind of arrangement prescribed by the regulations for the purposes of this subsection.

SECTION 849CD   PROTECTION FROM LIABILITY FOR ACTS OR OMISSIONS IN GOOD FAITH  

849CD(1)    
An action, suit or proceeding (whether criminal or civil) does not lie against a person in relation to anything done, or omitted to be done, in good faith by the person if:

(a)    the person does the thing, or omits to do the thing, for the purpose of any of the following:

(i) complying with a direction or determination given under this Part by the Reserve Bank;

(ii) taking a measure, or an action, specified in such a direction or determination;

(iii) doing, or refraining from doing, anything in accordance with such a direction or determination; and

(b)    it is reasonable for the person to do the thing, or to omit to do the thing, in order to achieve that purpose; and

(c)    the person is any of the following:

(i) an officer or senior manager of the body corporate, or of a related body corporate or of a body corporate that was a related body corporate of a CS facility licensee before a transfer of business or shares under this Part;

(ii) an employee or agent of the body corporate, or of a related body corporate or of a body corporate that was a related body corporate of a CS facility licensee before a transfer of business or shares under this Part;

(iii) the body corporate, a related body corporate or a body corporate that was a related body corporate of a CS facility licensee before a transfer of business or shares under this Part;

(iv) a person engaged to provide services (including advice) to the body corporate, a related body corporate, or a body corporate that was arelated body corporate of a CS facility licensee before a transfer of business or shares under this Part.

849CD(2)    
For the purposes of paragraph (1)(b) , treat it as reasonable for a person to do a thing, or to omit to do a thing, in order to achieve a purpose unless no reasonable person in that person ' s position would do the thing, or omit to do the thing, in order to achieve that purpose.

Statutory managers

849CD(3)    
An action, suit or proceeding (whether criminal or civil) does not lie against a person in relation to anything done, or omitted to be done, in good faith by the person as the statutory manager of a body corporate.

Directors

849CD(4)    
An action, suit or proceeding (whether criminal or civil) does not lie against a director of a body corporate in relation to anything done, or omitted to be done, in good faith by the director, to the extent that the director is acting with the written approval of the statutory manager of the body corporate or the Reserve Bank under subsection 834A(3) .

849CD(5)    
An action, suit or proceeding (whether criminal or civil) for a contravention of:

(a)    a duty owed under Part 2D.1 ; or

(b)    a duty at common law or in equity that is equivalent to a duty owed under that Part;

does not lie against a director of a body corporate in relation to anything done, or omitted to be done, in good faith by the director while the body corporate is under statutory management.

SECTION 849CE   COMPENSATION FOR ACQUISITION OF PROPERTY  

849CE(1)    
If:

(a)    apart from this section, the operation of this Part would result in an acquisition of property from a person otherwise than on just terms; and

(b)    the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution;

the Commonwealth is liable to pay a reasonable amount of compensation to the person.

849CE(2)    
If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.

849CE(3)    
Any damages or compensation recovered or other remedy given in a proceeding that is commenced otherwise than under this section is to be taken into account in assessing compensation payable in a proceeding that:

(a)    is commenced under this section; and

(b)    arises out of the same event or transaction.

849CE(4)    
To avoid doubt, this section applies in relation to the operation of this Part instead of section 1350 .

849CE(5)    
In this section:

acquisition of property
has the same meaning as in paragraph 51(xxxi) of the Constitution.

just terms
has the same meaning as in paragraph 51(xxxi) of the Constitution.