ASIC Corporations (Redraw Facility Transfer) Instrument 2022/599
I, Felicity Natoli, delegate of the Australian Securities and Investments Commission, make the following notifiable instrument.
Date 24 June 2022
Contents
Part 1—Preliminary
1 Name of notifiable instrument
2 Commencement
3 Authority
4 Definitions
Part 2—Exemption
5 Exemption from Part 7.8A in relation to Redraw Facility Credit Contracts
6 Conditions
Part 1—Preliminary
1 Name of notifiable instrument
This is the ASIC Corporations (Redraw Facility Transfer) Instrument 2022/599.
2 Commencement
This instrument commences on the day it is signed.
3 Authority
This instrument is made under paragraph 994L(1)(a) of Corporations Act 2001.
4 Definitions
In this instrument:
Act means the Corporations Act 2001.
consumer has the meaning given in section 5 of the National Credit Act.
credit contract has the meaning given in section 5 of the National Credit Act.
mortgage has the meaning given in section 5 of the National Credit Act.
National Credit Act means the National Consumer Credit Protection Act 2009.
Redraw Facility Credit Contract means, in relation to a consumer, the credit contract between a consumer and Perpetual arising from obligations under the Volt Mortgage Loan to which the consumer is a party being novated from Volt to Perpetual (except to the extent that Volt’s rights under the Volt Mortgage Loan are assigned to Perpetual).
Volt means Volt Bank Limited (ABN 67 622 375 722).
Volt Mortgage Loan means a credit contract between Volt and a consumer that has been assigned and novated to Perpetual as nominee of Resimac under a sale and purchase agreement dated 17 June 2022 between Volt and Resimac.
Part 2—Exemption
5 Exemption from Part 7.8A in relation to Redraw Facility Credit Contracts
(1) Perpetual Trustee Company Limited (ABN 42 000 001 007) in its capacity as trustee of the RESIMAC Triomphe Trust in respect of the Warehouse Series No.1 (Perpetual) and Resimac Limited (ABN 67 002 997 935) (Resimac) in acting as servicer under a servicing agreement with Perpetual do not have to comply with Part 7.8A of the Act in relation to a Redraw Facility Credit Contract.
Where exemption applies
(2) Subject to subparagraph 6(1), the exemptions in subparagraph 5(1) apply in relation to the entry into by Perpetual of a Redraw Facility Credit Contract with a consumer where:
(a) circumstances specified in ASIC Instrument 22-0598 are satisfied; and
(b) the target market determination for the Volt Mortgage Loan is available as required under Division 2 of Part 7.8A of the Act.
6 Conditions
(1) If Perpetual relies on an exemption in subparagraph 5(1), Perpetual must comply with the conditions set out in paragraph 8 of ASIC Instrument 22-0598.
Overview
The ASIC Corporations (Redraw Facility Transfer) Instrument 2022/599 was enacted to provide specific relief regarding the transfer of Redraw Facility Credit Contracts from Volt Bank Limited to Perpetual Trustee Company Limited. This notifiable instrument was introduced to address a gap in the regulatory framework pertaining to the transfer of credit contracts, particularly those involving Redraw Facility Credit Contracts. The instrument was created by Felicity Natoli, a delegate of the Australian Securities and Investments Commission, under the authority of paragraph 994L(1)(a) of the Corporations Act 2001. The policy objective behind this exemption is to facilitate the smooth transition of credit contracts while ensuring compliance with broader regulatory requirements, thus protecting consumers and maintaining market integrity.
Scope and Application
The ASIC Corporations (Redraw Facility Transfer) Instrument 2022/599 applies specifically to Perpetual Trustee Company Limited and Resimac Limited in their respective roles concerning the RESIMAC Triomphe Trust and the servicing of Volt Mortgage Loans that have been assigned to Perpetual. This instrument exempts Perpetual, acting as trustee, and Resimac, acting as servicer, from certain compliance requirements under Part 7.8A of the Corporations Act 2001, specifically in relation to Redraw Facility Credit Contracts. This exemption is contingent upon specified conditions being met, including the satisfaction of circumstances outlined in ASIC Instrument 22-0598 and the availability of a target market determination for the Volt Mortgage Loan. The instrument, which commenced on the date it was signed, is made under the authority of the Corporations Act 2001 and defines key terms such as "consumer," "credit contract," and "mortgage" as per the National Consumer Credit Protection Act 2009.
Key Provisions
The ASIC Corporations (Redraw Facility Transfer) Instrument 2022/599 primarily provides exemptions for Perpetual Trustee Company Limited and Resimac Limited from specific compliance requirements under the Corporations Act 2001 (Act) concerning Redraw Facility Credit Contracts. These exemptions are outlined in Part 2 of the instrument. Specifically, Section 5(1) exempts Perpetual and Resimac from complying with Part 7.8A of the Act in relation to Redraw Facility Credit Contracts under certain conditions. This exemption applies when the circumstances specified in ASIC Instrument 22-0598 are met, and the target market determination for the Volt Mortgage Loan is available as required under Division 2 of Part 7.8A of the Act.
Perpetual and Resimac, as entities benefiting from this exemption, are subject to several obligations. Firstly, they must ensure that the circumstances specified in ASIC Instrument 22-0598 are satisfied. Secondly, they need to make sure that the target market determination for the Volt Mortgage Loan is available. These conditions are essential to maintain the validity of their exemption. Additionally, if Perpetual relies on the exemption, it must comply with the conditions set out in paragraph 8 of ASIC Instrument 22-0598, which may include specific reporting or documentation requirements.
Failure to comply with the requirements and conditions set out in the instrument may result in significant consequences. While the instrument does not explicitly state penalties for non-compliance, breaches of the Corporations Act 2001 can lead to both civil and criminal liabilities. Civil penalties may include fines and other monetary penalties, while criminal penalties may include imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined based on the specific provisions of the Act that are being contravened. It is important for Perpetual and Resimac to adhere strictly to the terms of the instrument to avoid these potential repercussions.