(1) The Payment System Rules of a Designated Payment System are valid and enforceable despite any enactment or rule of law to the contrary.

(2) However, subsection (1) applies only to the extent that the Payment System Rules of the Designated Payment System provide for or in relation to the following:

(a) the basis on which Payment Instructions are given;
(b) the basis on which payments are calculated;
(c) the basis on which Settlements are effected (including whether on a gross basis or using Netting);
(d) the basis on which Collateral Security is to be provided in connection with the payment system;
(e) the action to be taken if:

(i) a participant in the payment system is unable, or likely to become unable, to meet the participant’s obligations to any or all of the following:

(A) an operator of the payment system;

(B) another participant in the payment system;

(C) any other party to the Payment System Rules; or

(ii) an operator of the payment system is unable, or likely to become unable, to meet the operator’s obligations to any or all of the following:

(A) participant in the payment system;

(B) any other party to the Payment System Rules. including, for example, any action to be taken for the realisation and disposal of any applicable Collateral Security.

(3) The claim of the secured parties to any Collateral Security provided in connection with the Designated Payment System rank, and must be paid, in priority to the claims of all other Persons despite any enactment or rule of law to the contrary, unless the terms on which the Collateral Security was provided expressly provide that the other Persons are to be paid in priority.

Links to this article