Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 5/25)
Character Range: 7324299–7327065

result is the zero‑capital amount.
 (2A) This subsection covers an asset that:
 (a) the entity provided as security for the performance of its obligations in relation to securities it acquired under a reciprocal purchase agreement (otherwise known as a repurchase agreement), sell‑buyback arrangement or securities loan arrangement; and
 (b) does not consist of *shares.

Securitisation vehicle
 (2) An entity is a securitisation vehicle if:
 (a) it is an entity established for the purposes of acquiring, funding and holding *securitised assets (see subsection (3)); and
 (b) it has acquired the securitised assets from another entity (the originator); and
 (c) the acquisition of the securitised assets is wholly funded by the issuing of *debt interests by the entity; and
 (d) in issuing the debt interests, the entity does not receive any guarantee, security or other form of credit support from any of its *associate entities, the originator or any associate entity of the originator; and
 (e) the entity has not issued debt interests for any purpose other than for the purpose of funding the acquisition of the securitised assets; and
 (f) there are no debt interests issued to the entity by any of the entity's associate entities, the originator or any associate entity of the originator; and
 (g) any *arrangements the entity has with any of its associate entities, the originator or any associate entity of the originator are those that would reasonably be expected to have been entered into by parties dealing at *arm's length with each other.
Note: An entity that does not qualify as a securitisation vehicle may be exempt from the thin capitalisation rules under section 820‑39.

Securitised assets
 (3) An asset of an entity is a securitised asset if:
 (a) the entity is a *securitisation vehicle; and
 (b) the asset consists of:
 (i) *debt interests issued by an entity other than the originator in relation to the securitisation vehicle that is mentioned in paragraph (2)(b); or
 (ii) a lease for the hire of goods that would be a lease covered by paragraph (b) of the definition of on‑lent amount if a reference to an entity in that definition were a reference to that originator; or
 (iii) a *scheme that, apart from the operation of paragraph 974‑25(1)(b), would have given rise to a debt interest covered by subparagraph (i); and
 (c) the asset provides security for the issuing of debt interests that funded the acquisition of the asset by the securitisation vehicle (see paragraph (2)(c)).

What is the required credit rating?
 (4) For the purposes of step 2 of the method statement in subsection (1), the required credit rating for an entity issuing a *debt interest is:
 (a) if the interest is a *subordinated debt interest—a long‑term foreign