Document ID: chunk:federal_register_of_legislation:F2022L01578:front:0:p5
Version: federal_register_of_legislation:F2022L01578
Segment Type: other
Provision Reference: 
Character Range: 11533–14485

a derivative that is transacted directly through an organised, licensed and regulated exchange;
(i)            financial institution — includes, but is not limited to, any institution engaged substantively in one or more of the following activities (domestically or overseas) – banking; leasing; issuing credit cards; portfolio management[5] (including asset management and funds management); management of securitisation schemes; equity and/or debt securities, futures and commodity trading and broking; custodial and safekeeping services; insurance and similar activities that are ancillary to the conduct of these activities. An authorised NOHC, a registered life NOHC, or any overseas equivalent is considered a financial institution. For the avoidance of doubt, hedge funds, trading firms, and foreign deposit-taking institutions are considered to be financial institutions;
(j)            Head of a Level 2 group — is each of the following:
(i)            where an ADI that is a member of a Level 2 group is not a subsidiary of an authorised banking NOHC or another ADI, that ADI;
(ii)         where an ADI that is a member of a Level 2 group is a subsidiary of an authorised banking NOHC, that authorised banking NOHC;
(iii)       the parent entity of a Level 2 insurance group as defined in GPS 001;
(k)          initial margin — is collateral that is collected to cover the potential future exposure that could arise from future changes in the market value of a derivative over the close-out period in the event of a counterparty default;
(l)            IOSCO's Risk Mitigation Standards — are the risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives as set out by the Board of IOSCO in Risk Mitigation Standards for Non-centrally Cleared OTC Derivatives as it exists at 28 January 2015;
(m)        Level 2 group — means the entities that comprise:
(i)            Level 2 as defined in APS 001; or
(ii)         a Level 2 insurance group as defined in GPS 001;
(n)          margining group — is a group, comprising one or more entities, within the meaning of Australian Accounting Standard AASB 10 Consolidated Financial Statements; however, an APRA covered entity may elect to apply equivalent foreign accounting standards that apply to the consolidated financial statements of the APRA covered entity or covered counterparty, as relevant;
(o)          margining period — is the period of time during which margin must be exchanged for all new transactions entered into within that period (see Tables 1 and 2);
(p)          minimum transfer amount — is the amount specified in a margin agreement that sets the minimum amount of collateral required to be transferred between the two counterparties as part of a collateral call;
(q)          netting agreement — is an 'eligible bilateral netting agreement' within the meaning of Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk