Document ID: chunk:federal_register_of_legislation:F2024C01135:reg:6:p1
Version: federal_register_of_legislation:F2024C01135
Segment Type: reg
Provision Reference: reg 6 (pt 1/13)
Character Range: 14884–17751

6                                                   US dollar          Secured Overnight Financing Rate (SOFR)            7 days to 50 years

(5) A reference to a type of Floating Rate Index in a table in this Rule includes a reference to any successor to that Floating Rate Index.
(6) A Derivative is not a Clearing Derivative if under the Derivative:

Optionality
(a)        either party is granted an option which, if exercised, would or might affect the amount, timing or form of the consideration that would otherwise be provided under the Derivative by a party to the Derivative; or
Note: A Derivative that gave a party the ability to change the notional principal amount at its election would be an example of optionality. This type of optionality would also fall within paragraph (c).

Multi-currency
(b)       the notional principal amount and payments under the Derivative are not all denominated in the same currency; or
Note: Such a Derivative would also not be a Clearing Derivative because it would not meet the IRD Class Specifications: see paragraphs (2)(a), (3)(a) and (4)(a).

Conditional notional principal amount
(c)        the notional principal amount will or may change upon the occurrence of a specified future event where, at the time of entry into the Derivative, at least one of the following is uncertain:
(i)         when the future event will occur;
(ii)       whether the future event will occur.
(7) A Derivative is not a Clearing Derivative if both the following are satisfied:
(a)        the notional principal amount and payments under the Derivative are denominated in Australian dollars;
(b)       the Derivative is either:
(i)         an Overnight Index Swap that was entered into before 3 October 2016; or
(ii)       a Forward Rate Agreement that was entered into before 2 April 2018.

1.2.4 Meaning of Clearing Entity
(1) An entity is a Clearing Entity in relation to a Derivative Transaction if it is an Australian Clearing Entity or a Foreign Clearing Entity in relation to the Derivative Transaction.
(2) An entity is an Australian Clearing Entity in relation to a Derivative Transaction to which it is party in its Personal Capacity if the entity is:
(a)        an Australian ADI or a financial services licensee that:
(i)         is incorporated or formed in Australia; and
(ii)       meets the Clearing Threshold in its Personal Capacity; or
(b)       an Opt-In Australian Clearing Entity in its Personal Capacity.
(3) An entity is an Australian Clearing Entity in relation to a Derivative Transaction to which it is a party in a Representative Capacity if:
(a)        the scheme or trust to which the Representative Capacity relates is incorporated or formed in Australia; and
(b)       the entity is:
(i)         a Financial Entity that:
(A)       is incorporated or formed in Australia or is a foreign company; and
(B)