CTHIn ForceLegislation
Banking (prudential standard) determination No. 6 of 2024
Unsettled tradesUnsettled trades
Start here
Get a plain-English read of Unsettled trades
Turn the raw legal text into a practical explanation grounded in Banking (prudential standard) determination No. 6 of 2024.
Unsettled trades
- An ADI must account for regular-way purchases or sales of financial assets that have not been settled on the following basis:
- ADIs which apply trade date accounting must reverse out any offsetting between cash receivables for unsettled sales and cash payables for unsettled purchases of financial assets. Thereafter, ADIs may offset between those cash receivables and cash payables (irrespective of whether such offsetting is permitted under Australian Accounting Standards) only if all of the following conditions are met:
- the financial assets bought and sold that are associated with cash payables and receivables are measured at fair value through the income statement and included in the ADI’s trading book in accordance with Attachment A to APS 116; and
- the transactions of the financial assets are settled on a delivery-versus-payment basis; and
- ADIs which apply settlement date accounting must apply the treatment set out in paragraphs 12 and 15 of this Attachment.
- ADIs which apply trade date accounting must reverse out any offsetting between cash receivables for unsettled sales and cash payables for unsettled purchases of financial assets. Thereafter, ADIs may offset between those cash receivables and cash payables (irrespective of whether such offsetting is permitted under Australian Accounting Standards) only if all of the following conditions are met: