King & Wood Mallesons

Asia-Pacific 100 position: 3

Certainty for portability in Australia

Portability is fundamental in the new FMI (financial market infrastructure) world of global derivatives. It is the ability to move transactions and collateral away from a defaulting participant in a clearing system in order to preserve the system and the market. In many countries, legal certainty is still an issue for this process. However, in Australia, legislative certainty is now on its way.

The Corporations and Financial Sector Legislation Amendment Bill 2013 (Cth) (a link is here) was introduced into the House of Representatives today. Amongst other things, the Bill proposes to amend the Payment Systems and Netting Act (PSN Act) to protect portability and security in clearing systems under Australian law. It is an important improvement in robustness of the legal framework supporting the operations and stability of financial markets clearing in Australia…

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