9Reserve Bank may approve payment system

#### 9 Reserve Bank may approve payment system (1) The Reserve Bank may, by legislative instrument, approve the system if it is satisfied that: (a) systemic disruption in the financial system could result if a participant went into external administration and the system were not approved under this section; and (b) the system is supported by a legally enforceable arrangement between participants in the system for the irrevocable settlement of transactions in real time; and (c) the rules governing the system establish a system administrator for the arrangement; and (d) the system administrator has the resources, competency and integrity needed to administer the system; and (e) the system rules provide that if a settling participant goes into external administration, the system administrator may suspend from the system: (i) the participant; and (ii) any general participant for whom that participant is the sole sponsor; and (f) the system rules provide that if a general participant goes into external administration, the system administrator may suspend that participant from the system; and (g) the system rules require a settling participant to assume the obligations of any participant whose transactions they settle through the system if the participant fails to fulfil those obligations; and of any other matters specified in the regulations. (2) In deciding whether to approve a system, the Reserve Bank must have regard to the following: (a) whether the system rules: (i) allow all participants to settle transactions on their own account; or (ii) provide both for participants who can settle transactions on their own account and for other participants (settling participants) and for participants who cannot settle transactions on their own account (general participants); (b) whether the system rules provide for different obligations for settling participants and general participants and, if they do, whether they: (i) require a general participant to have a settling participant to settle their transactions through the system; and (ii) require a participant who goes into external administration to notify its settling participant (if any) of the external administration as soon as practicable; and (iii) require a settling participant to notify the system administrator as soon as practicable if it becomes aware that a participant whose transactions it settles through the system has gone into external administration; (c) whether the system rules require participants to notify the system administrator as soon as practicable if they go into external administration; (d) any other matters specified in the regulations; (e) any other matters the Reserve Bank considers relevant. (3) An approval may be given subject to the terms and conditions specified in the approval.