Commonwealth Consolidated Regulations

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CORPORATIONS REGULATIONS 2001 - REG 7.5A.62

Meaning of foreign clearing entity

             (1)  An entity is a foreign clearing entity , in relation to a derivative transaction to which it is a party otherwise than in a representative capacity, if:

                     (a)  the entity is an ADI, or a financial services licensee, that:

                              (i)  is incorporated or formed outside Australia; and

                             (ii)  holds $100 billion or more in total gross notional outstanding positions otherwise than in a representative capacity; or

                     (b)  the entity:

                              (i)  is incorporated or formed outside Australia; and

                             (ii)  in this jurisdiction, provides financial services relating to derivatives to wholesale clients only; and

                            (iii)  is exempt under the Act (including these Regulations, or another instrument made under or for the purposes of the Act) from the requirement to hold a financial services licence for those financial services; and

                            (iv)  is an entity whose activities relating to derivatives are regulated by an overseas regulatory authority; and

                             (v)  holds $100 billion or more in total gross notional outstanding positions otherwise than in a representative capacity; or

                     (c)  the entity is any other entity that:

                              (i)  is incorporated or formed outside Australia; and

                             (ii)  has, in accordance with any derivative transaction rules, opted to be treated, for the purposes of those rules, as a foreign clearing entity in relation to derivative transactions to which it is a party otherwise than in a representative capacity.

             (2)  An entity is a foreign clearing entity in relation to a derivative transaction to which it is a party in a representative capacity in the circumstances set out in the derivative transaction rules.



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