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CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS    View history reference

PART 7.1 - PRELIMINARY    View history reference

Division 6 - What is a clearing and settlement facility?    View history reference

SECTION 768A  WHAT IS A CLEARING AND SETTLEMENT FACILITY?  

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768A(1)  [``clearing and settlement facility'']  


For the purposes of this Chapter, 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)  [Exceptions]  


However, the following conduct does not constitute operating a clearing and settlement facility for the purposes of this Chapter:


(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;

[CCH Note: There are no paragraphs 768A(2)(f) and (g).]


(h) operating a facility for the exchange and settlement of non-cash payments (see section 763D) between providers of non-cash payment facilities;


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


 



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