Document ID: chunk:federal_register_of_legislation:C2024C00373:section:10:p1
Version: federal_register_of_legislation:C2024C00373
Segment Type: section
Provision Reference: s 10 (pt 1/2)
Character Range: 27174–30019

10  Effectiveness of approved multilateral netting arrangements
 (1) If an approved netting arrangement is entered into in circumstances that are within Commonwealth constitutional reach:
 (a) obligations may be terminated, termination values may be calculated and a net amount become payable in accordance with the arrangement; and
 (b) paragraph (a) applies despite:
 (i) any disposal of rights that may be netted under the arrangement; or
 (ii) the creation of any encumbrance, or any other interest, in relation to those rights; or
 (iii) the operation of any encumbrance, or any other interest, in relation to those rights that is created after the commencement of this section;
  in contravention of a prohibition in the arrangement; and
 (c) for the purposes of any law, the assets and liabilities of a party to the arrangement are taken:
 (i) to include any net obligation owed to a party under the arrangement; and
 (ii) not to include obligations terminated under the arrangement.
 (2) If a party to an approved netting arrangement goes into external administration:
 (a) if the external administration is not a non‑terminal administration—the party may do anything permitted or required by the arrangement in order to net:
 (i) obligations incurred before or on the day on which the party goes into external administration; and
 (ii) net obligations if the obligations that are directly or indirectly netted are incurred before or on the day on which the party goes into external administration; and
 (aa) if the external administration is a non‑terminal administration—the party may do anything permitted or required by the arrangement in order to net:
 (i) obligations incurred before the participant goes into, or while the participant is in, non‑terminal administration; and
 (ii) net obligations if the obligations that are directly or indirectly netted are incurred before the participant goes into, or while the participant is in, non‑terminal administration; and
 (b) the obligations that are, or have been, netted under the arrangement are to be disregarded in the external administration (but see subsection (4)); and
 (c) any net obligation owed by the party under the arrangement that has not been discharged is provable in the external administration; and
 (d) any net obligation owed to the party under the arrangement that has not been discharged may be recovered by the external administrator for the benefit of creditors; and
 (e) the netting and any payment made by the party under the arrangement to discharge a net obligation is not to be voidable in the external administration; and
 (f) for an arrangement that is governed by the rules of a licensed CS facility (within the meaning of the Corporations Act 2001)—a payment, or a transfer of property, by a party under the arrangement to discharge a net obligation