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 7.1 - PRELIMINARY  

Division 6 - Meaning of clearing and settlement facility  

SECTION 768A   MEANING OF CLEARING AND SETTLEMENT FACILITY  

768A(1)    

A clearing and settlement facility is a facility that provides a regular mechanism for the parties to transactions relating to financial products to meet obligations to each other that:

(a)    arise from entering into the transactions; and

(b)    are of a kind prescribed by regulations made for the purposes of this paragraph.

Example 1: A facility that provides a regular mechanism for stockbrokers to pay for the shares they buy and to be paid for the shares they sell, and for records of those transactions to be processed to facilitate registration of the new ownership of the shares, would be a clearing and settlement facility (assuming that the relevant obligations are of a kind prescribed by regulations made for the purposes of this section).

Example 2: A facility that provides a regular mechanism for registering trade in derivatives on a futures market and that enables the calculation of payments that market participants owe by way of margins would also be a clearing and settlement facility (assuming that the relevant obligations are of a kind prescribed by regulations made for the purposes of this section).

768A(2)    

However, the following conduct does not constitute operating a clearing and settlement facility :

(a)    an ADI (within the meaning of the Banking Act 1959 ) acting in the ordinary course of its banking business;

(b)    a person acting on their own behalf, or on behalf of one party to a transaction only;

(c)    a person who provides financial services to another person dealing with the other person's accounts in the ordinary course of the first person's business activities;

(d)    the actions of a participant in a clearing and settlement facility who has taken on the delivery or payment obligations, in relation to a particular financial product, of another person who is a party to a transaction relating to a financial product;

(e)    conducting treasury operations between related bodies corporate;

(h)    

operating a facility for the exchange and settlement of non-cash payments between providers of non-cash payment facilities;

(i)    any other conduct of a kind prescribed by regulations made for the purposes of this paragraph.

Meaning of participant

768A(3)    

A person who is allowed to participate directly in a clearing and settlement facility under the facility ' s operating rules is a participant in the facility.

768A(4)    

A person who is:

(a)    recognised by the operating rules of the facility as a suitably qualified affiliate of the facility; and

(b)    involved in the carrying on of a financial services business (including as an employee, director or in some other capacity);

is also, for the purposes of the following provisions, a participant in the facility:

(c)    paragraph 821B(2)(b) ;

(d)    section 822B ;

(e)    subsection 915F(2) ;

(f)    any other provisions prescribed by regulations for the purposes of this paragraph.