CAB (07) 632 Designated Settlement Systems And The Primacy Of Clearing Houses' Interest In Collateral

This paper is the report back by officials to Cabinet, following targeted consultation, on the policy tradeoffs resulting from providing clearing houses, which are to be part of a designated settlement system, with certainty of their interest in collateral, and any additional matters that may arise as a consequence of further analysis.

It recommends the granting of designated clearing houses with a level of certainty that enables them to defeat any other security interests in collateral posted at the clearing house. 

It also recommends that the regulatory regime currently used for the designation of payment systems, Part 5C of the Reserve Bank of New Zealand Act 1989, be amended and serve as the legislative vehicle for designating settlement systems.