CLF Notifications

Last updated: 6 September 2019

This page is where the Reserve Bank publishes amendments to the CLF Terms and Conditions and/or the CLF Operational Notes, and the dates upon which they come into effect.

Notice – 6 September 2019

On 6 September 2019, the Reserve Bank notified CLF participants that a new clause 21 (U.S. Stay Regulations) would be added to the Committed Liquidity Facility (CLF) Terms and Conditions effective 7 October 2019.

This new clause is being added to the CLF Terms and Conditions in order: (a) for the RBA to contractually recognise the application of the U.S. Stay Regulations to the Committed Liquidity Facility Terms and Conditions; and (b) to ensure that the Committed Liquidity Facility Terms and Conditions are not a “Protocol Covered Agreement” for the purposes of the ISDA 2018 U.S. Resolution Stay Protocol.

This new clause is intended to assist certain financial institutions which are subject to the new U.S. Stay Regulations in respect of qualified financial contracts to comply with their obligations under those regulations; however, nothing in the CLF Terms and Conditions or this notification is intended to be, or should be relied upon as, legal or financial or other professional advice in relation to compliance with the relevant regulations.

This new clause will only affect U.S. Covered Entities.

The new CLF Terms and Conditions clause 21 is provided below.

21. U.S. Stay Regulations

  1. This clause 21 applies at any time that the CLF Participant is a U.S. Covered Entity. If at any time the CLF Participant is not a U.S. Covered Entity, this clause 21 is of no force or effect.
  2. In this clause 21:

    Adhering Party has the meaning given to the term “Adhering Party” in the ISDA Protocol.

    Affiliate has the meaning given in section 2(k) of the Bank Holding Company Act (12 U.S.C. 1841(k)) and section 225.2(a) of the Board's Regulation Y (12 CFR 225.2(a)).

    CLF QFC means, in respect of the CLF Participant, each of the following:

    1. (Ⅰ) the CLF Commitment Deed;
    2. (Ⅱ) these Terms and Conditions; and
    3. (Ⅲ) any SF Repo between the RBA and the CLF Participant.

    Covered Bank has the meaning given to the term “covered bank” in the OCC Regulation.

    Covered Entity has the meaning given to the term “covered entity” in the FRB Regulation.

    Covered FSI has the meaning given to the term “covered FSI” in the FDIC Regulation.

    Default Right means any:

    1. (Ⅰ) right of a party, whether contractual or otherwise (including, without limitation, rights incorporated by reference to any other contract, agreement, or document, and rights afforded by statute, civil code, regulation, and common law), to liquidate, terminate, cancel, rescind, or accelerate such agreement or transactions thereunder, set off or net amounts owing in respect thereto (except rights related to sameday payment netting), exercise remedies in respect of collateral or other credit support or property related thereto (including the purchase and sale of property), demand payment or delivery thereunder or in respect thereof (other than a right or operation of a contractual provision arising solely from a change in the value of collateral or margin or a change in the amount of an economic exposure), suspend, delay, or defer payment or performance thereunder, or modify the obligations of a party thereunder, or any similar rights; or
    2. (Ⅱ) right or contractual provision that alters the amount of collateral or margin that must be provided with respect to an exposure thereunder, including by altering any initial amount, threshold amount, variation margin, minimum transfer amount, the margin value of collateral, or any similar amount, that entitles a party to demand the return of any collateral or margin transferred by it to the other party or a custodian or that modifies a transferee's right to reuse collateral or margin (if such right previously existed), or any similar rights, in each case, other than a right or operation of a contractual provision arising solely from a change in the value of collateral or margin or a change in the amount of an economic exposure.

    FDIC Regulation means 12 C.F.R. §§ 382.1-7.

    FRB Regulation means 12 C.F.R. §§ 252.2, 252.81-88.

    ISDA Protocol means the ISDA 2018 U.S. Resolution Stay Protocol published by the International Swaps and Derivatives Association, Inc. on 31 July 2018 and available on the ISDA website (www.isda.org).

    OCC Regulation means 12 C.F.R. §§ 47.1-8.

    U.S. Covered Entity means a Covered Bank, Covered Entity or Covered FSI.

    U.S. Special Resolution Regime means the Federal Deposit Insurance Act (12 U.S.C. 1811–1835a) and regulations promulgated thereunder and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5381–5394) and regulations promulgated thereunder.

  3. In the event that the CLF Participant becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of a CLF QFC (and any interest and obligation in or under, and any property securing, a CLF QFC) from the CLF Participant will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the CLF QFC (and any interest and obligation in or under, and any property securing, the CLF QFC) were governed by the laws of the United States or a state of the United States.
  4. In the event that the CLF Participant or an Affiliate of the CLF Participant becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights with respect to a CLF QFC that may be exercised against the CLF Participant are permitted to be exercised by the RBA to no greater extent than the Default Rights could be exercised under the U.S. Special Resolution Regime if the CLF QFC was governed by the laws of the United States or a state of the United States.
  5. Notwithstanding anything to the contrary in the ISDA Protocol and regardless of whether the RBA or the CLF Participant becomes an Adhering Party before or after or at the same time that this clause 21 becomes effective, the RBA and the CLF Participant agree (including for the purpose of clause 3(b) of the ISDA Protocol) that the ISDA Protocol shall not apply to these Terms and Conditions or any CLF QFC and, accordingly, that neither these Terms and Conditions nor any CLF QFC will be a “Protocol Covered Agreement” for the purposes of the ISDA Protocol.

Notice – 7 June 2019

On 7 June, the Reserve Bank announced that Section 10 of the CLF Operational Notes would be replaced with:

10. CLF Fee

In consideration of the Reserve Bank's CLF commitment to an ADI, the ADI must pay a monthly CLF Fee in advance to the Reserve Bank.

The CLF Fee for a calendar month must be paid to the Reserve Bank by the ADI by no later than 4.00 pm AEST/AEDT on the last Settlement Day (i.e. a day on which RITS is open for settlement) of the immediately preceding month. If the CLF fee has not been paid when due, the Reserve Bank will not be obliged to enter into an SF Repo with the ADI. A failure to pay the CLF fee will also entitle the Reserve Bank to cancel its commitment to the ADI.

The amount of the CLF Fee due to the Reserve Bank by an ADI in respect of a calendar month is calculated by multiplying (as at the first business day of the calendar month for which the CLF Fee is being paid):

  1. the amount of the Reserve Bank's CLF commitment to the ADI;
  2. the CLF Fee Rate; and
  3. 1/12,

and rounding that figure to the nearest cent.

For the purposes of paragraph (a), the calculation of the Reserve Bank's CLF commitment is determined by reference to the amount most recently advised by APRA for the first business day of the calendar month for which the CLF Fee is being paid and is not affected by any amounts which have been utilised by means of an SF Repo under the CLF.

For the purposes of paragraph (b), the CLF Fee Rate is: 0.15 per cent until 31 December 2019; 0.17 per cent from 1 January 2020 to 31 December 2020; and 0.20 per cent from 1 January 2021 onwards.

The Reserve Bank may change the CLF Fee Rate at its sole discretion by way of an update to these CLF Operational Notes. Any change to the CLF Fee Rate will become effective no earlier than three months following the date on which the Reserve Bank publishes the change to these CLF Operational Notes on the CLF Notifications page.

The Reserve Bank will provide a monthly invoice to the ADI. The payment of the CLF Fee will be via RITS cash transfer.

Notice – 28 June 2018

A minor amendment to Attachment A: Form of Utilisation Request in the CLF Operational Notes will be made effective 30 July 2018. In order to further clarify what information is required in Section 3. ii Purchase Price of the Request the guidance note has been revised as follows:

ii. Purchase Price: [  ]

[Note: the proposed Purchase Price (payment amount) for the SF Repo must be in Australian dollars and must not exceed the Reserve Bank's Commitment]

has been replaced with:

ii. Purchase Price: [  ]

[Note: the proposed Purchase Price for the SF Repo must be in Australian dollars and must not exceed the Reserve Bank's Commitment. The proposed Purchase Price is the proposed price at which the CLF Participant will sell the Purchased Securities to the Reserve Bank (i.e. the Australian dollar amount the CLF Participant proposes will be paid by the Reserve Bank to the CLF Participant to purchase the Purchased Securities). It is not the Fair Value of the Purchased Securities]

Notice – 1 March 2017

On 1 March 2017, the following notice was provided to CLF Participants as a result of updates to the Technical Notes for Domestic Market Operations relating to reporting requirements for asset-backed securities:

  • Prior to 1 March 2018, for asset-backed securities to satisfy the mandatory reporting requirements for RBA eligible securities, reporting through the Securitisation System must be lodged within 7 calendar days of the monthly anniversary of the distribution date for asset-backed securities. From 1 March 2018, reporting through the Securitisation System must be lodged by the monthly anniversary of the distribution date for the asset-backed securities. Any asset-backed securities that do not meet this requirement will be considered ineligible for repo with the Reserve Bank. Securities that lose eligibility due to late reporting will remain ineligible until all submissions outstanding related to that security have been made and a subsequent submission has been lodged successfully by the due date.

Notice – 23 January 2017

Minor amendments to the CLF Terms and Conditions and the CLF Operational Notes have been made in response to the upcoming adoption of a revised version of the RITS Regulations. The amendments were announced on 23 January 2017 and are effective from the later of: (a) 23 February 2017 and (b) the ‘Rewrite Adoption Date’ as defined in the revised version of the RITS Regulations. The amendments are:

  • All references to ‘RBA Repo’ have been replaced with ‘SF Repo’. Following the first reference to ‘SF Repo’ in each document, ‘(Standing Facility Repo)’ has been added.
  • All references to ‘Approved Security’ have been replaced with ‘Eligible Security’.
  • All references to ‘TBMA/ISMA Agreement’ have been replaced with ‘SIFMA/ICMA Agreement’.
  • In CLF Terms and Conditions Clause 1.3: the definition of ‘Approved Security’ has been replaced with:

    Eligible Security means a Security that the Reserve Bank has determined it is prepared to purchase or sell under a Reciprocal Purchase Transaction to which Annexure A of the RITS Regulations applies and that satisfies any other criteria determined by the Reserve Bank from time to time as set out in the CLF Operational Notes for this purpose.

    the definition of ‘Master Agreement’ has been replaced with:

    Master Agreement means the SIFMA/ICMA Agreement as amended and supplemented by Annex I in section 3 of Annexure A of the RITS Regulations and clause 6 of these Terms and Conditions.

    the definition of ‘RITS Participating Bank Facilities Agreement’ has been deleted.

  • CLF Terms and Conditions Clause 3.1 has been replaced with:

    3.1 Amount

    The commitment of the Reserve Bank to the CLF Participant on any day is, subject to clause 3.2, an amount in Australian Dollars which is equal to the Australian Dollar amount of CLF commitment of the Reserve Bank to the CLF Participant which, on or prior to that day, APRA has most recently advised the CLF Participant and the Reserve Bank in writing that the CLF Participant may count towards the CLF Participant's LCR on that day.

  • In CLF Terms and Conditions Clause 4.2, ‘RITS Regulations, the Conditions of Operation and the Master Agreement’ has been replaced with ‘RITS Membership Documents’.
  • In CLF Terms and Conditions Clause 6.3, ‘clause 2(c) in Annex I set out in Exhibit A of the RITS Regulations, for the purposes of paragraph 2(cc) of the Master Agreement’ has been replaced with ‘paragraph 1(e) in Annex I in section 3 of Annexure A of the RITS Regulations, for the purposes of paragraph 2(ee) of the Master Agreement’.
  • In CLF Terms and Conditions Clause 11.1(a), ‘its RITS Membership Agreement and RITS Participating Bank Facilities Agreement’ has been replaced with ‘each RITS Membership Document it has executed and delivered to the Reserve Bank’.
  • In CLF Terms and Conditions Clause 20.4, ‘the CLF Operational Notes, the RITS Regulations, the Conditions of Operation, the RITS Membership Agreement and the RITS Participating Bank Facilities Agreement’ has been replaced with ‘the CLF Operational Notes and the RITS Membership Documents’.
  • In CLF Terms and Conditions Clause 20.6, ‘RITS Regulations’ has been replaced with ‘RITS Membership Documents’.
  • In CLF Operational Notes, Section 1, ‘The Reserve Bank is providing a Committed Liquidity Facility (CLF) as part of Australia's implementation of the Basel III liquidity standards from 1 January 2015. Consistent with the standards, certain authorised deposit-taking institutions (ADIs)…’ has been replaced with ‘The Reserve Bank provides a Committed Liquidity Facility (CLF) to certain authorised deposit-taking institutions (ADIs) as part of Australia's implementation of the Basel III liquidity standards. Consistent with the standards, certain ADIs…’.
  • In CLF Operational Notes, Section 5, ‘Exhibit B of the RITS Regulations’ has been replaced with ‘Annex I in section 3 of Annexure A of the RITS Regulations’.

Notice – 22 September 2016

On 22 September 2016, the following notice was provided to CLF Participants as a result of updates to the Technical Notes for Domestic Market Operations:

  • The Reserve Bank will not accept securities after a call notice has been issued. For CLF purposes, this change to the criteria for ‘approved securities’ will come into effect from 22 September 2017.

Notice – 8 April 2015

The following amendments to the CLF Terms and Conditions and the CLF Operational Notes were announced on 8 April 2015 and are effective from 8 May 2015:

  • CLF Terms and Conditions Clause 14 has been amended to clarify that the CLF Participant only indemnifies the Reserve Bank regarding technological failures directly related to the CLF. Specifically, in paragraph (a)(ii), ‘any technological failure of any sort (including the failure of any communications, computer, software or electrical failure);’  was replaced with: ‘any technological failure of any sort (including the failure of any communications, computer, software or electrical failure) directly related to the CLF;’
  • In Schedule 1 to the CLF Terms and Conditions, paragraph (c) ‘acknowledge that the Commitment of the Reserve Bank will not become effective until 1 January 2015’ has been deleted, as it has become redundant. The subsequent paragraphs have been renumbered accordingly.
  • In the CLF Operational Notes, a new Section 12 on Privacy has been added:

    12. Privacy

    All ADIs which apply for and/or enter into a CLF with the Reserve Bank are responsible for ensuring that a copy of the following notice is given to all relevant employees within their organisation.

    The Reserve Bank collects personal information regarding the contacts (including CLF authorised signatories) for an ADI in respect of a CLF including their name, title and position, work telephone number, work email address and/or specimen signature (the Information). The Reserve Bank collects the Information in order to: identify and verify the contacts for the ADI; communicate with the ADI in respect of the CLF; and check the due execution of communications from the ADI (including any Utilisation Requests). If the Information were not collected, the Reserve Bank would not be able to establish a CLF with the ADI or, in respect of that CLF, communicate with the ADI, maintain contact information for the ADI or ensure requests and instructions received from the ADI are correctly authorised. The Information is of a kind which the Reserve Bank does not usually disclose to persons or organisations outside the Reserve Bank. Individuals are entitled under Australian privacy law in certain circumstances to access, and seek correction of, personal information about them held by the Reserve Bank. If you wish to access the personal information the Reserve Bank holds about you, or if you have an enquiry or complaint about how the Reserve Bank handles personal information, you can contact the Reserve Bank's Privacy Officer by email to privacy@rba.gov.au or by phone on 02 9551 8111. The personal information of a contact (including a CLF authorised signatory) for an ADI should be updated by notice given in accordance with the CLF Terms and Conditions and these CLF Operational Notes. More information about access, correction and complaints is in the Reserve Bank's Privacy Policy available on its website at www.rba.gov.au/privacy/.

Notice – 1 December 2014

On 1 December 2014, the following minor amendments were made to the CLF Operational Notes as a result of updates to the Technical Notes for Domestic Market Operations:

  • In Section 7, the link to the ‘Liquidity Facilities’ page was replaced with a link to the ‘Standing Facilities’ page.
  • In Section 9, the link to the ‘Eligible Securities’ page was replaced with a link to the ‘Eligible Securities and Margin Ratios’ page.
  • In Section 9, the sentence ‘The Reserve Bank will provide guidance on its approach to valuing asset-backed securities without observed market prices on its website by the end of 2014.’ was replaced with the sentence: ‘For guidance on the Reserve Bank's approach to valuing asset-backed securities without observed market prices, please see the Reserve Bank website: Valuing Asset-Backed Securities Without Observed Market Prices.’