88Exercise of Reserve Bank powers to give direction under section 83 not grounds for denial of obligations

88 Exercise of Reserve Bank powers to give direction under section 83 not grounds for denial of obligations

(1) Subject to subsection (4), this section applies if a body corporate (the protected body corporate) is party to an arrangement, whether the proper law of the arrangement is:

(a) a law of the Commonwealth or of a State or Territory; or

(b) a law of a foreign country or a part of a foreign country.

(2) The protected body corporate being subject to the exercise of a power under section 83 by the Reserve Bank does not allow the arrangement, or a party to the arrangement (other than the protected body corporate), to do any of the following:

(a) deny any obligation under the arrangement;

(b) accelerate any debt under the arrangement;

(c) terminate or close out:

(i) the arrangement; or

(ii) any transaction relating to the arrangement;

(d) enforce any security under the arrangement.

Person must not act contrary to this section

(3) A party to the arrangement (other than the protected body corporate) must not:

(a) purport to do an act or thing that is not allowed to be done because of this section; or

(b) purport to do an act or thing that can be done only if the arrangement does a thing that the arrangement is not allowed to do because of this section; or

(c) omit to do an act or thing in circumstances where that omission would only be required or permitted if the arrangement did a thing that the arrangement is not allowed to do because of this section.

Note: An injunction may be granted under Part 7 of the Regulatory Powers Act in respect of a contravention of this subsection: see section 186.

Payment Systems and Netting Act 1998 prevails over this section

(4) If there is any inconsistency between:

(a) subsections (1) to (3) of this section; and

(b) the Payment Systems and Netting Act 1998;

that Act prevails to the extent of the inconsistency.

Arrangements to which this section does not apply

(5) This section does not apply to a kind of arrangement specified in an instrument made under subsection (6).

(6) The Reserve Bank may, by legislative instrument, make a determination specifying kinds of arrangements for the purposes of subsection (5).