Document ID: chunk:federal_register_of_legislation:F2022C00868:reg:28:p2
Version: federal_register_of_legislation:F2022C00868
Segment Type: reg
Provision Reference: reg 28 (pt 2/2)
Character Range: 70867–72444

the arrangement, having regard to the counterparty, the collateral, the terms of the arrangement and any other relevant matter, is very low and recorded this assessment in writing.
 (3) Any collateral relied on by the passport fund to satisfy subsection (2) must be:
 (a) cash; or
 (b) money market instruments:
 (i) that do not embed derivatives; and
 (ii) that have been assessed by the operator of the passport fund as having acceptable risk; and
 (iii)  whose fair value exceeds 103% of the amount of cash collateral that would otherwise be required to satisfy subsection (2).
 (4) The passport fund must not sell, reinvest, or encumber securities lending collateral other than as permitted by this section or following default in compliance by the counterparty to the securities lending arrangement.
 (5) The passport fund may reinvest securities lending collateral that is cash if:
 (a) the reinvestment is in money market instruments that have been assessed by the operator of the passport fund as having acceptable risk; and
 (b) the value of the assets that the passport fund will receive from the reinvestment excluding cash exceeds 103% of the fair value of the securities transferred under the securities lending arrangement less any cash collateral that will be held.
 (6) Collateral accepted in relation to a derivative or securities lending arrangement is to be treated as assets acquired by the passport fund for the requirements under Division 6.3 whether or not the collateral is provided by way of transfer.

Division 6.3—Restrictions on portfolio allocation