Superannuation Industry (Supervision) Regulations (Amendment) 1998 (83 of 1998)

19.   New regulation 13.15A

19.1 After regulation 13.15, insert:

Charges in relation to certain derivatives contracts

" 13.15A. (1) A trustee may give a charge over, or in relation to, an asset of a fund if:

(a) the charge is given in relation to a derivatives contract entered into:

(i) by, or on behalf of, the trustee; or

(ii) by a broker on the instructions, or on account , of the trustee; or

(iii) by a broker for the benefit of the trustee; and

(b) the charge is given in order to comply with the rules of an approved body (as defined in subregulation (2)) that requires the performance of obligations in relation to the derivatives contract to be secured; and

(c) the fund has in place a risk management statement that sets out:

(i) policies for the use of derivatives that include an analysis of the risks associated with the use of derivatives within the investment strategy of the fund; and

(ii) restrictions and controls on the use of derivatives that take into consideration the expertise of staff; and

(iii) compliance processes to ensure that the controls are effective (for example, reporting procedures, internal and external audits and staff management procedures); and

(d) the investment to which the charge relates is made in accordance with the risk management statement.

" (2) In this regulation:

approved body means:

(a) Australian Stock Exchange Ltd;

(b) Options Clearing House Pty Ltd;

(c) Sydney Futures Exchange Ltd;

(d) Sydney Futures Exchange Clearing House Pty Ltd;

(e) a body that is an approved foreign exchange within the meaning of regulation 1.2A.02 of the Corporations Regulations;

(f) a body specified in Schedule 11 of the Corporations Regulations;

(g) a body that performs clearing house functions in relation to a body mentioned in paragraph (e) or (f) ( the second body ) in accordance with the rules of the second body or a law of the country where the second body is situated.

derivative means a financial asset or liability the value of which depends on, or is derived from, other assets, liabilities or indices.

derivatives contract means an option contract or futures contract relating to any right, liability or thing, including in particular:

(a) an option contract as defined in section 9 of the Corporations Law; and

(b) a futures contract within the meaning of section 72 of the Corporations Law; and

(c) an agreement to which section 72A or 92A of the Corporations Law applies.".