{"id":"F2006L01768","name":"Payment Systems (Regulation) Act 1998 - Declaration No. 2 of 2006 regarding Purchased Payment Facilities","slug":"payment-systems-regulation-act-1998-declaration-no-2-of-2006-regarding-purchased-payment-facilities","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":59543,"registerId":"commonwealth-F2006L01768-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Payment Systems (Regulation) Act 1998 - Declaration No. 2 of 2006 regarding Purchased Payment Facilities","content":"RESERVE BANK OF AUSTRALIA\n\nPayment Systems (Regulation) Act 1998\n\nDeclaration No. 2, 2006 regarding Purchased Payment Facilities\n\nThe Reserve Bank of Australia, under Section 9(3) of the Payment Systems (Regulation) Act 1998 (the ‘Act’), declares that the Act does not apply to the following specified classes of facilities:\n\n(a) Limited-value facilities, being facilities where the total amount of obligations to make payments under the facility does not exceed $10,000,000. The Reserve Bank considers that it is not appropriate for the Act to apply to these facilities, having regard to restrictions on the number and types of people who may purchase these facilities.\n\n(b) Limited-participant facilities, being facilities where the number of people to whom payments may be made using such a facility does not exceed 50 persons.\n\nThis notice replaces the ‘Exemption Notice for Limited Facilities Under Section 9(3)’, gazetted on 10 March 2004.\n\nSigned\n\n\\[IJM\\]\n\nIJ Macfarlane\n\nGovernor\n\nReserve Bank of Australia\n\nDate 24/04/2006","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This declaration operates exactly as intended under Section 9(3) of the parent Act, which specifically empowers the Reserve Bank to exempt classes of facilities from the Act's application. The scope remains limited to the statutory exemption power and does not expand beyond it."},"complexity_factors":["Very short document (under 300 words)","Only 2 defined exemption classes (limited-value and limited-participant facilities)","No cross-references to other legislation beyond the parent Act citation","Simple conditional logic (threshold-based: $10 million cap, 50-person cap)","No nested exceptions or complex procedural requirements","Single operative section with straightforward declaratory language"],"plain_english_summary":"This is a formal declaration by the Reserve Bank of Australia that exempts two specific types of payment facilities from regulation under the Payment Systems (Regulation) Act 1998.\n\n**What it does:**\nThe declaration creates two exemptions from financial regulation:\n\n*   **Limited-value facilities:** Payment systems where the total money owed to users is $10 million or less. The Reserve Bank decided these don't need full regulation because there are already restrictions on who can buy into them.\n*   **Limited-participant facilities:** Payment systems where payments can only be made to 50 people or fewer.\n\n**Who it affects:**\n*   Businesses operating small or restricted payment facilities (they don't have to comply with the full Act)\n*   Users of these limited payment systems\n*   The Reserve Bank itself (it sets the regulatory boundaries)\n\n**Why it matters:**\nThis declaration reduces red tape for smaller payment providers. Instead of applying heavy-handed regulation to every payment system regardless of size, the Reserve Bank focuses its oversight on larger, more systemically important facilities. This replaced an earlier 2004 exemption notice, updating the thresholds and conditions."},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"The declaration replaces an earlier exemption notice gazetted 10 March 2004 (final paragraph) but does not state that the scope of the excluded classes has been altered. Based on the text provided, there is no expressed change to the thresholds or categories compared with the prior instrument; the declaration simply restates the two excluded classes and their numerical limits (opening paragraph; paragraphs (a)–(b))."},"complexity_factors":["Use of two bright-line numerical thresholds ($10,000,000 and 50 persons) that are easy to state but can be hard to interpret in edge cases (paragraphs (a)–(b)).","Key terms left undefined in the text (for example, 'total amount of obligations to make payments' and 'people to whom payments may be made'), creating interpretive ambiguity (paragraphs (a)–(b)).","Delegated administrative discretion: the RBA exercises power under Section 9(3) to alter the Act's application, which can lead to iterative updates or replacements of exemption instruments (opening line; final paragraph).","Interaction with the underlying Act is not detailed in the declaration, requiring cross-reference to the Act to understand full compliance implications (opening line referencing Section 9(3)).","Replacement of an earlier notice implies continuity or adjustment in regulatory perimeter, which may require stakeholders to reassess their positions (final paragraph)."],"plain_english_summary":"### What this declaration does\n\nThe Reserve Bank of Australia (RBA), using its power under Section 9(3) of the Payment Systems (Regulation) Act 1998, declares that the Act will not apply to two specific classes of \"purchased payment facilities.\" The declaration removes these classes from the statutory perimeter of the Act (see opening paragraph).\n\n- Limited-value facilities: facilities where the total amount of obligations to make payments under the facility does not exceed $10,000,000. These are excluded from the Act (paragraph (a)).\n- Limited-participant facilities: facilities where the number of people to whom payments may be made does not exceed 50 persons. These are excluded from the Act (paragraph (b)).\n\nThe declaration replaces an earlier exemption notice gazetted on 10 March 2004 (final paragraph). It is signed and dated by the Governor of the RBA.\n\n### Official rationale given by the RBA\n\nThe RBA states that it considers it is not appropriate for the Act to apply to these facilities, \"having regard to restrictions on the number and types of people who may purchase these facilities\" (sentence before the signature). That is presented as the reason for removing these two classes from regulation.\n\n### Practical, mechanical effects (who decides, who pays, how behaviour changes)\n\n- Who decides: The RBA exercised its power under Section 9(3) of the Act to make this declaration (opening line). The declaration itself sets the thresholds and categories that are excluded (paragraphs (a) and (b)).\n- Who pays / who benefits financially: Entities that issue or use facilities falling within these two categories directly avoid the Act's regulatory requirements. In practical terms, issuers and purchasers of facilities that meet the stated thresholds no longer have obligations under the Act (first sentence and paragraphs (a)–(b)). That reduces their compliance burden and the direct costs of meeting requirements in the Act.\n- How behaviour may change: Market participants can rely on the stated numerical and participant thresholds (<= $10,000,000 total obligations; <= 50 persons) to determine whether a facility is inside or outside the Act. That creates an incentive for providers to structure facilities so they fall under these thresholds if avoiding the Act is desirable (paragraphs (a)–(b)).\n\n### Trade-offs, implementation risks and compliance issues\n\n- Regulatory perimeter change: The declaration places the two classes outside the Act’s regulatory perimeter (opening line). As a result, the RBA does not apply the Act to those transactions, shifting the boundary between regulated and unregulated payment facilities.\n- Threshold mechanics and ambiguity: The excluded categories are defined by two numerical limits: a monetary cap (“total amount of obligations to make payments under the facility does not exceed $10,000,000”) and a participant cap (“does not exceed 50 persons”) (paragraphs (a)–(b)). The text does not define terms such as \"total amount of obligations\" or \"people to whom payments may be made,\" which can create interpretive uncertainty and require administrative or legal clarification when applying the declaration.\n- Incentives and substitution effects: The clear numerical thresholds create a discontinuity at $10,000,000 and 50 persons that may incentivise contractual or product design to fall just below the limits (paragraphs (a)–(b)). This is a direct mechanism by which market behaviour could adapt to the declaration.\n- Concentration of benefits: The explicit beneficiaries of the declaration are the issuers and purchasers of the excluded facilities because they are relieved of obligations under the Act (paragraphs (a)–(b)). The declaration itself notes the small and restricted nature of purchasers as part of the rationale (pre-signature sentence).\n- Administrative discretion and continuity: The RBA used its delegated power under Section 9(3) to make the exemption and has replaced an earlier exemption notice (opening line; final paragraph). That demonstrates ongoing administrative discretion to define the Act’s scope and to update prior instruments.\n\n### What the text does not say (and so remains open)\n\n- The declaration does not list the specific obligations in the Act that exempted facilities avoid; it only states that the Act does not apply to those classes (opening line, paragraphs (a)–(b)).\n- The declaration does not provide definitions for key phrases used to set the thresholds or procedures for resolving borderline cases; such interpretive work would fall to the RBA, market participants, or the courts if disputes arise (paragraphs (a)–(b)).\n\n(See: opening paragraph referencing Section 9(3); paragraph (a) on the $10,000,000 threshold; paragraph (b) on the 50-person threshold; final paragraph on replacement of the earlier notice; pre-signature sentence on the RBA's view of appropriateness.)"}},"importantCases":[],"_links":{"self":"/api/acts/payment-systems-regulation-act-1998-declaration-no-2-of-2006-regarding-purchased-payment-facilities","history":"/api/acts/payment-systems-regulation-act-1998-declaration-no-2-of-2006-regarding-purchased-payment-facilities/history","analysis":"/api/acts/payment-systems-regulation-act-1998-declaration-no-2-of-2006-regarding-purchased-payment-facilities/analysis","conflicts":"/api/acts/payment-systems-regulation-act-1998-declaration-no-2-of-2006-regarding-purchased-payment-facilities/conflicts","importantCases":"/api/acts/payment-systems-regulation-act-1998-declaration-no-2-of-2006-regarding-purchased-payment-facilities/important-cases","documents":"/api/acts/payment-systems-regulation-act-1998-declaration-no-2-of-2006-regarding-purchased-payment-facilities/documents"}}