An incomplete resolution

Author: | Published: 1 Sep 2011

The aim of Australia's Payment Systems and Netting Act 1998 (PSN Act) is primarily to protect the operation of certain payment systems (including real-time gross settlement systems (RTGS) such as Austraclear) and netting contracts in the event of the insolvency of one of the participants in the relevant payment system or one of the parties to the relevant netting contract.

Close-out netting contracts are regulated under Part 4 of the PSN Act. These contracts are in summary, contracts where, if a certain event happens, particular obligations of the parties terminate or may be terminated, the termination values are able to be calculated and the termination values may be netted so that only a net amount is payable.

Other types of contracts can be included or excluded from the definition, however no relevant declarations have been made at the present time. The primary types of contract that fall within the close-out...