RITS Legal Framework
The legal framework of RITS is contractual, based on the RITS Regulations and Conditions of Operation and associated legal agreements. The Regulations set out the rules for the operation of RITS and the rights and obligations of Members, the Member's Bank and the Reserve Bank of Australia. More information is available in the RITS Regulations and Conditions of Operation Information Paper. Reciprocal Purchase Transactions and RBA Repos are governed by TBMA/ISMA Global Master Repurchase Agreement (2000), as amended by the RITS Regulations.
Standard agreements are executed between the Member, the Member's bank and the Reserve Bank to bind each party to the Regulations. RITS Members that hold an ESA enter into two standard agreements with the Reserve Bank:
- The Membership Agreement binds the Member, the Member's bank and the Reserve Bank to the RITS Regulations; and
- The Participating Bank Facilities Agreement relates to the Reserve Bank as Participating Bank for interbank ESA transactions across the Member's Exchange Settlement Cash Account (ESCA) within RITS and nominates the ESA as the external bank account to which the Reserve Bank will, each day, post the net movement in the ESCA. This agreement stipulates that ESAs and ESCAs may not go into debit.
A supplementary Membership Agreement is executed where an ESA is subject to special conditions. This includes banks that have been approved by the Reserve Bank and the Australian Prudential Regulation Authority (APRA) to make their RTGS transactions through agents, rather than directly through their own ESAs.
Members of RITS that do not have an ESA are called Non-Transaction Members. These Members belong to RITS for the purpose of being a Batch Administrator or being an eligible counterparty of the Reserve Bank in its domestic market operations. These Members enter into a Membership Agreement (Non-Transaction Member) with the Reserve Bank. Members who are approved Batch Administrators also enter into a Batch Administrator Agreement.
All Members are required to provide the Reserve Bank with an up-to-date list of RITS Authorised Signatories. This list contains the names and specimen signatures of the persons authorised to sign in the name and on behalf of the Member. When notifying the Reserve Bank of their Authorised Signatories, Members must also complete and attach an Authorised Signatories Cover Sheet. Terms used in this cover sheet are explained in the Guidance Notes.