Section 3 of the Principal Act is amended as follows:

(a) by omitting paragraph (a) from the definition of farming company and substituting the following paragraph:

(a) the shares of which are not quoted on the Australian Stock Exchange or a recognised stock exchange; and

(b) by inserting the following definition after the definition of life insurance :

loan-backed security means –

(a) an instrument or property creating, conferring or comprising a right or interest (whether described as a unit, bond or otherwise) of, or on, a beneficiary in a scheme under which any profit, distribution of capital or income in which beneficiaries participate arises from the acquisition, holding, management or disposal of a pool of loans, or any instrument which evidences such a right or interest; or

(b) a debt security –

(i) the payments under which by the person that issues or makes the instrument are derived substantially from the acquisition, holding, management or disposal of a pool of loans; and

(ii) that is secured by a mortgage or charge over a pool of loans; or

(c) an instrument of a class or description of instruments or property of a class or description of property prescribed to be a loan-backed security;

(c) by inserting "as referred to in Chapter 6 " after "a mortgage" in the definition of mortgage duty ;

(d) by inserting the following definitions after the definition of mortgage duty :

mortgage-backed security means –

(a) an interest in a trust that entitles the holder of, or beneficial owner under, the interest –

(i) to the whole or any part of the rights or entitlements of a mortgagee and any other rights or entitlements in respect of a mortgage or any money payable by the mortgagor under the mortgage (whether the money is payable to the holder or beneficial owner on the same terms and conditions as under the mortgage or not); or

(ii) to the whole or any part of the rights or entitlements of a mortgagee and any other rights or entitlements in respect of a pool of mortgages or any money payable by mortgagors under those mortgages (whether the money is payable to the holder or beneficial owner on the same terms and conditions as under the mortgages or not); or

(iii) to payments that are derived substantially or to any prescribed extent from the income or receipts of a pool of mortgages –

and that, in addition, may entitle the holder or beneficial owner to a transfer or assignment of the mortgage or mortgages; or

(b) a debt security (whether or not in writing), the payments under which by the person who issues or makes the debt security are derived substantially or to a prescribed extent from the income or receipts of a pool of mortgages; or

(c) any of the following:

(i) an interest in a trust creating, conferring or comprising a right or interest (whether described as a unit, bond or otherwise) of, or on, a beneficiary in a scheme under which any profit or income in which the beneficiaries participate arises from the acquisition, holding, management or disposal of prescribed property, or any instrument that evidences such a right or interest;

(ii) a security (whether or not in writing), the payments under which by the person who issues or makes the security are derived substantially from the income or receipts of prescribed property;

(iii) an interest in a trust, a debt security (whether or not in writing), an instrument or property that creates an interest in or charge over an interest in a trust, a debt security (whether or not in writing) or other instrument or property to which paragraph (a) or (b) or subparagraph (i) or (ii) of this paragraph applies –

but does not include an instrument or property comprising –

(d) a mortgage; or

(e) the transfer of a mortgage; or

(f) a declaration of trust; or

(g) an instrument of a class or description of instruments or property of a class or description of property prescribed not to be a mortgage-backed security;

mortgage package means a mortgage package referred to in section 150 ;

(e) by inserting the following definition after the definition of policy of mortgage insurance :

pool of mortgages means a pool or collection of assets –

(a) that is comprised solely of mortgages; or

(b) that is comprised substantially or to a prescribed extent of mortgages or of money paid pursuant to mortgages (whether or not that money has been invested in prescribed property) or of money (whether or not that money has been invested in prescribed property) if the primary investment policy is to invest in mortgages, but that may also contain either or both of the following:

(i) prescribed property;

(ii) any other property that forms part of the pool or collection of assets for the purpose of issuing or making a mortgage-backed security in relation to the pool of mortgages;