Document ID: chunk:federal_register_of_legislation:F2022L01578:reg:3:p1
Version: federal_register_of_legislation:F2022L01578
Segment Type: reg
Provision Reference: reg 3 (pt 1/4)
Character Range: 59025–62267

3                    A-3                            P-3                         F-3

Attachment D — Substituted compliance
     1. For the purposes of this Prudential Standard and subject to the condition in paragraph 2 of this Attachment, substituted compliance with the margin requirements or provisions issued or administered by any of the following foreign bodies is permitted:
(a)          Office of the Superintendent of Financial Institutions, Canada;
(b)          European Commission;
(c)          Hong Kong Monetary Authority, Hong Kong;
(d)          Financial Services Agency, Japan;
(e)          Ministry of Agriculture, Forestry and Fisheries, Japan;
(f)           Ministry of Economy, Trade and Industry, Japan;
(g)          Monetary Authority of Singapore, Singapore;
(h)          Swiss Financial Market Supervisory Authority, Switzerland;
(i)            Financial Conduct Authority, United Kingdom;
(j)            Prudential Regulation Authority, United Kingdom;
(k)          Commodity Futures Trading Commission, United States;
(l)            Farm Credit Administration, United States;
(m)        Federal Deposit Insurance Corporation, United States;
(n)          Federal Housing Finance Agency, United States;
(o)          Board of Governors of the Federal Reserve System, United States; and
(p)          Office of the Comptroller of the Currency, Treasury, United States.
2.             The following condition applies in relation to the foreign margin requirements or provisions issued or administered by a foreign body set out in paragraphs 1(a) to (j) of this Attachment:
(a)          Substituted compliance is not permitted for a transaction where the APRA covered entity and the covered counterparty are both members of the same margining group.
[1]  For the purposes of this Prudential Standard, an 'RSE licensee's business operations' includes all activities as an RSE licensee (including the activities of each RSE of which it is the licensee), and all other activities of the RSE licensee to the extent that they are relevant to, or may impact on, its activities as an RSE licensee.
[2]  For the avoidance of doubt, a reference to an 'APRA covered entity' in this Prudential Standard is to be read, for the purposes of paragraph 4 of this Prudential Standard, as a reference to the entity and also all members of an APRA covered entity's Level 2 group that are covered counterparties.
[3]  The calculation of the notional amounts must include physically settled foreign exchange forwards and swaps.
[4]  Subregulation 6(2) of the Payment Systems and Netting Regulations 2001 identifies obligations that are not eligible obligations in relation to a close out netting contract. The arrangements mentioned include credit facilities, reciprocal purchase agreements (otherwise known as repurchase agreements), sell buyback arrangements, securities loan arrangements, contracts of insurance and managed investment schemes.
[5] For clarity, the definition does not apply where a portfolio manager is acting as an agent.
[6]  Refer to subsection 11AF(2) of the Banking Act, subsection 32(3D) of the Insurance Act, subsection 230A(4) of the Life Insurance Act and subsection 34C(5) of the SIS Act.
[7]  Refer to paragraphs