155Self‑executing provisions

155 Self‑executing provisions

(1) The object of subsection (2) is to ensure that a self‑executing provision:

(a) cannot start to apply for certain reasons; and

(b) can be the subject of a Court order providing that the provision can only start to apply with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.

(2) Section 154 applies in relation to a self‑executing provision in a corresponding way to the way that section applies in relation to a right to terminate:

(a) an arrangement; or

(b) an obligation under an arrangement.

For this purpose, assume that section applies with such modifications as are necessary, including any modifications determined in an instrument made under subsection (3).

Note 1: This subsection achieves the object in subsection (1) by extending the application of all of the outcomes, exceptions and powers in section 154.

Note 2: These modifications include, for example, treating:

(a) a reference that a right cannot be exercised as including a reference that a self‑executing provision cannot start to apply; and

(b) a reference that one or more rights are exercisable as including a reference that one or more self‑executing provisions can start to apply.

(3) The Reserve Bank may, by legislative instrument, determine modifications for the purposes of subsection (2).

(4) In this section:

self‑executing provision means a provision of an arrangement that:

(a) can start to apply automatically:

(i) for one or more reasons; and

(ii) without any party to the arrangement making a decision that the provision should start to apply; and

(b) terminates:

(i) an arrangement; or

(ii) an obligation under an arrangement.