Banking Act 1959

Part II - Provisions relating to the carrying on of banking business  

Division 1A - Prudential supervision and monitoring of ADIs and authorised NOHCs  

Subdivision B - Conversion and write-off provisions  

SECTION 11CAC   Conversion or write-off etc. not grounds for denial of obligations  

(1)    
This section applies if an entity (the first entity ) is party to a contract, whether the proper law of the contract is:

(a) Australian law (including the law of a State or Territory); or

(b) law of a foreign country (including the law of part of a foreign country).

(2)    
None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the first entity), to do any of the following:

(a) deny any obligation under the contract;

(b) accelerate any debt under the contract;

(c) close out any transaction relating to the contract;

(d) enforce any security under the contract.

(3)    
The matters are as follows:

(a) a relevant instrument being converted in accordance with the terms of the instrument;

(b) a relevant instrument being written off in accordance with the terms of the instrument;

(c) the making of a determination (however described) by APRA that results in a relevant instrument being required to be converted or written off in accordance with the terms of the instrument.

(4)    
In this section:

relevant instrument
means:

(a) an instrument to which section 11CAB applies:

(i) that is issued by the first entity; or

(ii) to which the first entity is a party; or

(iii) for which the first entity is a conversion entity; or

(b) if the first entity is a body corporate that is a member of a relevant group of bodies corporate - an instrument to which section 11CAB applies:

(i) that is issued by another member of the group; or

(ii) to which another member of the group is a party; or

(iii) for which another member of the group is a conversion entity.