What it does
The Payment Systems and Netting Act 1998 (Cth) protects the integrity of Australia's core financial market infrastructure from the disruptive effects of insolvency. Its central purpose is to prevent the insolvency of one financial institution from cascading into a systemic crisis by allowing insolvency administrators to pick over already-executed payment transactions or already-netted obligations.
The Act operates by overriding the "specified provisions" of Australian insolvency and financial regulation law (including Corporations Act 2001 provisions on voidable transactions, Bankruptcy Act 1966 provisions on void acts, and numerous Banking Act 1959 and insurance act provisions) in defined contexts. The Act binds the Crown in all its capacities but does not make the Crown liable to prosecution for an offence (section 3).