Australian Securities and Investments Commission
Corporations Law — Paragraph 601QA(1)(a) — Variation
Pursuant to paragraph 601QA(1)(a) of the Corporations Law the Australian Securities and Investments Commission hereby varies ASIC Class Order 98/51 by:
1. inserting in the Schedule, after the words “(including foreign exchange),”, the words “accounts and deposits with a bank or financial institution,”; and
2. deleting from the Schedule the words “a deposit with a bank or other financial institution, at-call or for a fixed term”.
3. replacing the full stop at the end of the Schedule with a semi-colon and adding the following paragraphs:
“and including, until 1 July 2000, an interest arising from an Eligible SELECT Master Agreement.
Interpretation
For the purposes of this instrument an Eligible SELECT Master Agreement is a Secure Look-through Enhanced Customised Transaction Master Agreement (SELECT Master Agreement) including the Schedule and the form of the Annexure (as those terms are defined in the SELECT Master Agreement) offered by Deutsche Bank AG (ARBN 064 165 162) where Deutsche Bank AG represents to the client in writing prior to the client executing the SELECT Master Agreement and in each Confirmation (as defined in the SELECT Master Agreement) that is issued that:
(1) the terms of the SELECT Master Agreement do not materially differ
from the terms of the agreement that was given to ASIC on 19 September 1997 (the standard form agreement) except for:
(a) any variation that ASIC has permitted in writing; or
(b) any variation as a result of:
(i) the deletion of a provision from the agreement or the re-
inclusion of a provision in the agreement, in accordance with the express terms of the agreement;
(ii) the insertion of the relevant details in the Schedule and the
Confirmation in the Annexure;
(iii) the variation of the definition of “Authorised Investments” in the
Schedule,
other than a variation that extends the categories of Authorised Investments outside the categories in the Schedule to the standard form agreement;
(2) Deutsche Bank AG will ensure at the time of purchase of Authorised Investments that the Authorised Investments will be rated at least as Investment Grade Rated Securities as defined in the standard form agreement;
(3) any additional terms in paragraph 8 of the Confirmation do not amend the SELECT Master Agreement so that its terms are materially different from the terms of the standard form agreement (the making of representations contemplated by this paragraph do not result in the terms being materially different for this purpose); and
(4) Deutsche Bank AG is an Australian bank,
and in relation to which the responsible entity at the time each SELECT Contract (as defined in the standard form agreement) is entered:
(5) is reasonably satisfied, based only on the creditworthiness of the issuer of the Authorised Investments purchased under a SELECT Contract and the creditworthiness of Deutsche Bank AG and any other relevant person assessed having regard to all the circumstances relevant to the assessment of creditworthiness including any relevant credit rating issued by a ratings agency, that the responsible entity or its agent will at each of the fixed times applying in relation to the SELECT Contract receive the maximum amount it can be entitled to receive as the investor under the SELECT Master Agreement assuming the SELECT Contract is held to maturity; and
(6) based on the current circumstances, believes that, if permitted by law, it is likely that it or its agent will hold the SELECT Contract investment until maturity.”
Dated the 7th day of March 2000.
Signed by Brendan Byrne
as delegate of the Australian Securities and Investments Commission
Overview
The Australian Securities and Investments Commission (ASIC) enacted the legislative instrument F2006B00584 in 2000 to address specific issues related to financial transactions and agreements involving interest and accounts with banks or financial institutions. This instrument amends the ASIC Class Order 98/51 to include accounts and deposits with banks or financial institutions, while removing certain references to deposits. It also introduces provisions for interest arising from a specified master agreement until a defined date. The policy objective of these changes appears to be to clarify and update the regulatory framework governing financial transactions, ensuring they align with current practices and standards while maintaining oversight by ASIC.
The instrument specifically targets the Secure Look-through Enhanced Customised Transaction Master Agreement (SELECT Master Agreement) offered by Deutsche Bank AG, outlining stringent conditions for its use. These conditions include maintaining consistency with a standard form agreement, ensuring investments are of at least investment-grade, and providing detailed representations about creditworthiness and the likelihood of holding investments until maturity. By enacting this instrument, the Australian Parliament aims to provide clear regulatory guidance and protect investors in financial transactions.
Scope and Application
This legislative instrument, F2006B00584, pertains to the variation of ASIC Class Order 98/51 under the Corporations Law. It specifically targets accounts and deposits with banks or financial institutions, by including these in the Schedule and excluding certain deposits previously listed. Additionally, the instrument addresses the inclusion of interests arising from Eligible SELECT Master Agreements until 1 July 2000. An Eligible SELECT Master Agreement is defined as a particular type of master agreement offered by Deutsche Bank AG, subject to certain conditions including adherence to a standard form agreement and specific representations regarding creditworthiness and investment holding intentions. The instrument applies nationally and is subject to the conditions and representations specified, ensuring compliance with regulatory standards set by the Australian Securities and Investments Commission.
Key Provisions
The Australian Securities and Investments Commission (ASIC) has amended the ASIC Class Order 98/51 under the Corporations Law (sections referenced in parentheses). The primary changes involve modifying the Schedule of the Order to include accounts and deposits with banks or financial institutions, while removing specific references to deposits. Additionally, the Schedule now includes interest arising from an Eligible SELECT Master Agreement until 1 July 2000. An Eligible SELECT Master Agreement is defined as a specific type of agreement between Deutsche Bank AG and its clients, which must adhere to certain conditions outlined in the amendment.
The obligations imposed by the Act on the parties primarily concern the specific terms and representations within the Eligible SELECT Master Agreement. Deutsche Bank AG must ensure that the terms of the SELECT Master Agreement do not materially differ from a standard form agreement provided to ASIC, except for permitted variations. Furthermore, Deutsche Bank AG must certify that it is reasonably satisfied with the creditworthiness of the issuers of the Authorised Investments and that the responsible entity will receive the maximum amount entitled under the SELECT Master Agreement if the contract is held to maturity. The bank must also ensure that it is likely to hold the investment until maturity if permitted by law.
Failure to comply with the provisions set out in the amended Order could result in legal consequences. While specific offences and penalties are not detailed in the provided text, breaches of such legislative instruments typically attract civil or criminal penalties, including fines or other sanctions, depending on the severity and intent of the breach. These penalties could be significant, given the regulatory nature of the Act and the importance of ensuring compliance with financial agreements and disclosures.