Document ID: chunk:federal_register_of_legislation:F2024L00434:body:0:p46
Version: federal_register_of_legislation:F2024L00434
Segment Type: other
Provision Reference: 
Character Range: 170725–174141

amortise the principal (and any fees or changes as appropriate) by the loan maturity date in accordance with the loan conditions. For loans that are ahead of schedule (or behind schedule), the minimum repayments reported should be calculated based on the scheduled balance of the loan and not the actual balance.

Secured (finance)                                         Means finance for which the lender has recourse to collateral pledged by the borrower or a third party in the event of default by the borrower.

                                                          Except when reporting finance that is secured by residential property, secured finance may be fully secured or partially secured.

Secured by residential property                           Means finance for which the lender has recourse to collateral pledged by the borrower or a third party in the event of default by the borrower and:

                                                               * the value of the security for the loan represents 50 per cent or more of the loan balance; and
                                                               * 50 per cent or more of the security is residential property.
Securities borrowing                                      The borrower of the security in a securities lending agreement can be said to be undertaking securities borrowing activity.

Securities held for trading                               Has the same meaning as in AASB 9.

Securities lending                                        Means a lending arrangement under which a holder of a security agrees to provide the security to a borrower for a specified period of time. Loans are typically executed under standardised agreements, which give the borrower full title for the term of the loan. The lender typically charges a fee for the loan and requires the borrower to post collateral.

Securities not held for trading                           Means securities that are not securities held for trading (as defined in AASB 9).

                                                          These are generally securities purchased with the intent that they be held to maturity or held for a period of time though not necessarily to maturity (i.e. equity securities where it is not technically possible to hold to maturity).

Securitisation                                            Involves the creation of a financing structure where the cash flow from a pool is used to make payments on obligations to at least two tranches or classes of creditors (typically holders of debt securities), with each tranche or class entitled to receive payments from the pool before or after another class of creditors, thereby reflecting different levels of credit risk. Payments to the investors depend upon the performance of the underlying exposures, as opposed to being derived from an obligation of the entity originating those exposures.

                                                          The tranched structures that characterise securitisation differ from ordinary senior/subordinated debt in that junior securitisation tranches can absorb losses without interrupting contractual payments to more senior tranches, whereas subordination in a senior/subordinated debt structure is a matter of priority of rights to the proceeds of liquidation.

                                                          The securities