{"id":"F2007B00330","name":"Approval under the Payment Systems and Netting Act 1998 - Approval No. 1 of 2004","slug":"approval-under-the-payment-systems-and-netting-act-1998-approval-no-1-of-2004","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":62087,"registerId":"commonwealth-F2007B00330-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Approval under the Payment Systems and Netting Act 1998 - Approval No. 1 of 2004","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\nmeta-generator: Aspose.Words for .NET 20.2\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n|  | Approval under the Payment Systems and Netting Act 1998 |\n| --- | --- |\n\n\nApproval No 1 of 2004\n\n \n\n \n\nThe RESERVE BANK OF AUSTRALIA makes the following approval under section 9 of the Payment Systems and Netting Act 1998:\n\n1. The Clearing House Electronic Subregister System (CHESS) is hereby approved as an “approved RTGS system” in terms of the Payment Systems and Netting Act.\n2. This approval is a disallowable instrument under section 46A of the Acts Interpretation Act 1901 and, accordingly, is being tabled before each House of the Commonwealth Parliament.\n3. Subject to disallowance, this approval will take effect from the date of notification in the Gazette.\n4. This approval replaces Approval No. 1 of 2000.\n5. This approval may be reviewed from time to time.\n\n\n \n\nSigned\n\nIJ Macfarlane  Governor  Reserve Bank of Australia  \n\n5 March 2004\n\n \n","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":2,"scope_assessment":{"changed":false,"description":"This instrument replaces Approval No. 1 of 2000 (item 4) but does not state any substantive alterations to the scope of what is approved. From the text provided, the effect is to maintain (or reconfirm) the designation of CHESS as an \"approved RTGS system\" under section 9 of the Payment Systems and Netting Act 1998. The instrument does not specify changes to scope, conditions, obligations, fees or operational rules compared with the prior approval, so a change of scope cannot be identified from this text alone."},"complexity_factors":["Short instrument (five numbered items) with a single substantive action: designation of CHESS as an \"approved RTGS system\" (item 1).","References to other legislation (Payment Systems and Netting Act 1998; Acts Interpretation Act 1901) mean substantive legal effects depend on those external texts rather than this instrument.","Uses standard procedural mechanics (disallowable instrument, Gazette notification, replacement of prior instrument) that require cross-reference to parliamentary and administrative procedure.","Absence of detailed operational, financial or compliance provisions in the instrument itself reduces internal complexity but increases reliance on external instruments and the Act for full effect.","Administrative discretion (RBA can review/replace approval) and parliamentary oversight introduce governance steps to monitor but do not add textual complexity."],"plain_english_summary":"The Reserve Bank has formally declared CHESS an \"approved RTGS system\" under the Payment Systems and Netting Act 1998, replacing the 2000 approval. That designation brings CHESS within the Act’s legal regime and thus affects operators, users and counterparties to the extent the Act’s rules apply. The instrument is a disallowable one, takes effect on Gazette notification unless Parliament disallows it, and may be reviewed or replaced by the RBA."},"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This is a straightforward administrative approval exercising a specific power granted by the parent Act. It does not expand the scope of the legislation; it merely applies the existing statutory framework to a specific payment system (CHESS)."},"complexity_factors":["Very short document (5 numbered paragraphs)","No defined terms within the instrument itself (relies on definitions in the parent Act)","No cross-references to other legislation beyond naming the empowering Act and the Acts Interpretation Act","Simple, direct operative language (\"is hereby approved\")","No conditional logic or exceptions"],"plain_english_summary":"This is a formal approval issued by the Reserve Bank of Australia (RBA) under the **Payment Systems and Netting Act 1998**.\n\n**What it does:**\n- **Approves CHESS** (the Clearing House Electronic Subregister System) as an \"approved RTGS system.\"\n  - **CHESS** is the computer system used to settle trades of shares and other securities on the Australian Securities Exchange (ASX).\n  - **RTGS** stands for \"Real-Time Gross Settlement\" — a fancy way of saying a payment system where money moves instantly and finally between banks, rather than in batches at the end of the day.\n\n**Why this matters:**\n- Being \"approved\" under this Act gives CHESS **legal protection** for its netting arrangements. \"Netting\" means that instead of every single trade being settled individually, the system can calculate who owes what overall and settle just the net amounts. If CHESS weren't approved, these netting arrangements might be challenged in insolvency (bankruptcy) proceedings — meaning if a participant went bust, their trades could be unwound, creating chaos in financial markets.\n- This approval ensures that even if a bank or broker using CHESS collapses, the settled trades stay settled. This protects the stability of Australia's financial system.\n\n**Other details:**\n- This approval **replaces** an earlier one from 2000.\n- It is a **disallowable instrument** — meaning Parliament can veto it if it objects.\n- It takes effect once published in the Gazette (the official government notices)."}},"importantCases":[],"_links":{"self":"/api/acts/approval-under-the-payment-systems-and-netting-act-1998-approval-no-1-of-2004","history":"/api/acts/approval-under-the-payment-systems-and-netting-act-1998-approval-no-1-of-2004/history","analysis":"/api/acts/approval-under-the-payment-systems-and-netting-act-1998-approval-no-1-of-2004/analysis","conflicts":"/api/acts/approval-under-the-payment-systems-and-netting-act-1998-approval-no-1-of-2004/conflicts","importantCases":"/api/acts/approval-under-the-payment-systems-and-netting-act-1998-approval-no-1-of-2004/important-cases","documents":"/api/acts/approval-under-the-payment-systems-and-netting-act-1998-approval-no-1-of-2004/documents"}}