MEDIA RELEASE No: 2004-07 Date: 19 August 2004 Embargo: For Immediate Release

PAYMENT SYSTEMS AND NETTING ACT 1998: APPROVAL OF NETTING ARRANGEMENTS
CHEQUES ACT 1986: RECOGNITION OF SETTLEMENT SYSTEM

At its 17 August 2004 meeting, the Payments System Board determined the following to be 'approved multilateral netting arrangements' under the Payment Systems and Netting Act 1998:

• the Australian Paper Clearing System;
• the Bulk Electronic Clearing System;
• the Consumer Electronic Clearing System; and
• the High Value Clearing System.

The Board's decision provides legal certainty to these arrangements. All four clearing systems are co-ordinated by the Australian Payments Clearing Association (APCA).

The Board also determined that APCA's Australian Paper Clearing System is a 'recognised settlement system' under the Cheques Act 1986. This decision makes it clear that a financial institution can reverse a provisional credit for a cheque deposit in the event that the institution on which the cheque is drawn cannot settle.

Details of the Board's determinations are set out in the following documents - Approval under the Payment Systems and Netting Act 1998 and Determination under the Cheques Act 1986.