INTERNATIONAL MONETARY AGREEMENTS AMENDMENT BILL (NO. 1) 2010

International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 1

A Bill for an Act to amend the International

Monetary Agreements Act 1947, and for related

purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the International Monetary Agreements

Amendment Act (No. 1) 2010.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

2 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

Commencement information

Column 1

Column 2

Column 3

Provision(s) Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedule 1

The later of:

(a) the day this Act receives the Royal

Assent; and

(b) the day the amendments to the NAB

Decision and the changes in credit

arrangements of existing participants

referred to in Decision

No. 14577-(10/35), dated 12 April 2010,

of the Executive Board of the

International Monetary Fund, become

effective.

However, the provision(s) do not commence

at all if the event mentioned in paragraph (b)

does not occur.

The Minister must announce by notice in the

Gazette the day the amendments to the NAB

Decision and the changes in credit

arrangements of existing participants

become effective.

Note:

This table relates only to the provisions of this Act as originally

passed by both Houses of the Parliament and assented to. It will not be

expanded to deal with provisions inserted in this Act after assent.

(2) Column 3 of the table contains additional information that is not

part of this Act. Information in this column may be added to or

edited in any published version of this Act.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

concerned, and any other item in a Schedule to this Act has effect

according to its terms.

Amendment of the International Monetary Agreements Act 1947 Schedule 1

International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 3

Schedule 1--Amendment of the International

Monetary Agreements Act 1947

1 Subsection 3(1) (definition of New Arrangements to

Borrow)

Omit "a copy of which is set out in Schedule 4", substitute "a copy of

which, as amended by Decision No. 14577-(10/35), dated 12 April

2010, of the Executive Board of the Fund, is set out in Schedule 4".

2 Paragraph 6(1)(b)

Omit ", after that decision becomes effective".

3 Subsection 8B(1)

Omit ", after the New Arrangements to Borrow have become

effective,".

4 Subsection 8B(1)

Omit "that decision", substitute "the New Arrangements to Borrow".

5 Schedule 4 to the Act

Repeal the Schedule, substitute:

Schedule 4--Decision No. 11428-(97/6), dated

27 January 1997, of the Executive

Board of the Fund, as amended by

Decision No. 14577-(10/35), dated

12 April 2010, of the Executive Board

of the Fund

Note:

See subsection 3(1).

New Arrangements to Borrow

Preamble

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4 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

In order to enable the International Monetary Fund (the "Fund") to

fulfill more effectively its role in the international monetary system, a number

of countries with the financial capacity to support the international monetary

system have agreed to provide resources to the Fund up to specified amounts in

accordance with the terms and conditions of this decision. As the Fund is a

quota-based institution, the credit arrangements provided for under the terms of

this decision shall only be drawn upon when quota resources need to be

supplemented in order to forestall or cope with an impairment of the

international monetary system. In order to give effect to these intentions, the

following terms and conditions are adopted under Article VII, Section 1(i) of

the Fund's Articles of Agreement.

Paragraph 1. Definitions

(a)

As used in this decision the term:

(i)

"amount of a credit arrangement" means the maximum

amount expressed in special drawing rights that a

participant undertakes to make available to the Fund

under a credit arrangement;

(ii)

"Articles" means the Articles of Agreement of the

Fund;

(iii)

"available commitment" means a participant's credit

arrangement less any drawn and outstanding balances;

(iv)

"borrowed currency" or "currency borrowed" means

currency transferred to the Fund's account under a

credit arrangement;

(v)

"call" means a notice by the Fund to a participant to

make a transfer under its credit arrangement to the

Fund's account;

(vi)

"credit arrangement" means an undertaking to provide

resources to the Fund on the terms and conditions of

this decision;

(vii)

"currency actually convertible" means currency

included in the Fund's quarterly financial transactions

plan for transfers;

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International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 5

(viii)

"drawer" means a member that purchases borrowed

currency from the General Resources Account of the

Fund;

(ix)

"indebtedness of the Fund" means the amount the Fund

is committed to repay under a credit arrangement;

(x)

"member" means a member of the Fund;

(xi)

"participant" means a participating member or a

participating institution;

(xii)

"participating institution" means an official institution

of a member that has entered into a credit arrangement

with the Fund with the consent of the member; and

(xiii)

"participating member" means a member that has

entered into a credit arrangement with the Fund.

(b)

For the purposes of this decision, the Monetary Authority of

Hong Kong (the "HKMA") shall be regarded as an official institution of the

member whose territories include Hong Kong, provided that:

(i)

loans by the HKMA and payments by the Fund to the

HKMA under this decision shall be made in the

currency of the United States of America, unless the

currency of another member is agreed between the

Fund and the HKMA;

(ii)

the references to balance of payments and reserve

position in paragraphs 5(c), 6(b), 6(c), 7(a), and 11(e)

shall be understood to refer to the balance of payments

and reserve position of Hong Kong. The HKMA shall

not be eligible to vote on a proposal for activation

under paragraph 5(c), included in a resources

mobilization plan under paragraph 6(b), or subject to

calls under paragraph 7(a), and shall be excluded from

calls in accordance with paragraph 6(c), if, at the time

of voting on any such proposal, approval of any such

resource mobilization plan, or making of any such call,

the HKMA notifies the Fund that Hong Kong's present

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6 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

and prospective balance of payments and reserve

position does not allow it to meet calls under its credit

arrangement; and

(iii)

the HKMA shall have the right to request early

repayment in accordance with paragraph 13(c) with

respect to claims transferred to the HKMA if at the

time of the transfer the balance of payments position of

Hong Kong is, in the opinion of the Fund, sufficiently

strong to justify such a right.

Paragraph 2. Credit Arrangements

(a)

A member or institution that adheres to this decision undertakes

to provide resources to the Fund on the terms and conditions of this decision up

to the amount in special drawing rights set forth in Annex I to this decision

("Annex I"), which may be amended from time to time in order to take into

account changes in credit arrangements resulting from the application of

paragraphs 3(b), 4, 15(b), 16, 17 and 19(b).

(b)

Except as set forth in paragraph 1(b)(i) or otherwise agreed

with the Fund, resources provided to the Fund under this decision shall be made

in the currency of the participant. Agreements under this paragraph for the use

of the currency of another member shall be subject to the concurrence of any

member whose currency shall be used.

Paragraph 3. Adherence

(a)

Any member or institution specified in Annex I as a new

participant may adhere to this decision in accordance with paragraph 3(c).

(b)

Any member or institution not specified in Annex I, may apply

to become a participant at any time. Any such member or institution that wishes

to become a participant shall, after consultation with the Fund, give notice of its

willingness to adhere to this decision, and, if the Fund and participants

representing 85 percent of total credit arrangements shall so agree, the member

or institution may adhere in accordance with paragraph 3(c). When giving

notice of its willingness to adhere under this paragraph 3(b), a member or

institution shall specify the amount, expressed in special drawing rights, of the

credit arrangement which it is willing to enter into, provided that the amount

shall not be less than the credit arrangement of the participant with the smallest

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International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 7

credit arrangement. The admission of a new participant shall lead to a

proportional reduction in the credit arrangements of all existing participants

whose credit arrangements are above that of the participant with the smallest

credit arrangement: such proportional reduction in the credit arrangements of

participants shall be in an aggregate amount equal to the amount of the new

participant's credit arrangement less any increase in total credit arrangements

decided in accordance with paragraph 4(a), provided that no participant's credit

arrangement shall be reduced below the minimum amount set out in Annex I.

(c)

A member or institution shall adhere to this decision by

depositing with the Fund an instrument setting forth that it has adhered in

accordance with its law and has taken all steps necessary to enable it to carry

out the terms and conditions of this decision. On the deposit of the instrument

the member or institution shall be a participant as of the date of the deposit or of

the effective date of the amendments to this decision set out in Executive Board

Decision No. 14577-(10/35), adopted on April 12, 2010, whichever is later.

Paragraph 4. Changes in Amounts of Credit Arrangements

(a)

When a member or institution is authorized under paragraph

3(b) to adhere to this decision, the total amount of credit arrangements may be

increased by the Fund with the agreement of participants representing 85

percent of total credit arrangements; the increase shall not exceed the amount of

the new participant's credit arrangement.

(b)

The amounts of participants' individual credit arrangements

may be reviewed from time to time in the light of developing circumstances and

changed with the agreement of the Fund and of participants representing 85

percent of total credit arrangements, including each participant whose credit

arrangement is changed. This provision may be amended only with the consent

of all participants.

Paragraph 5. Activation Period

(a)

When the Managing Director considers that the Fund's

resources available for the purpose of providing financing to members from the

General Resources Account need to be supplemented in order to forestall or

cope with an impairment of the international monetary system, and after

consultations with Executive Directors and participants, the Managing Director

may make a proposal for the establishment of an activation period during which

the Fund may (i) make commitments under Fund arrangements for which it may

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8 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

make calls on participants under their credit arrangements, and (ii) fund outright

purchases by making calls on participants under their credit arrangements;

provided that an activation period shall not exceed 6 months, and provided

further that the amount covered by calls to fund such commitments under

arrangements and outright purchases shall not exceed the maximum amount

specified in the proposal. The proposal for the establishment of an activation

period shall include information on (i) the overall size of possible Fund

arrangements on which discussions are advanced, (ii) the balance between

arrangements that are expected to be drawn upon and arrangements that are

expected to be precautionary, (iii) additional financing needs that, in the opinion

of the Managing Director, may arise during the proposed activation period, and

(iv) the mix of quota and NAB resources for purchases from the General

Resources Account in the period following the approval of an activation period.

The information will be updated quarterly during an activation period.

(b)

If there is not unanimity among the participants, the question

whether the participants are prepared to accept the Managing Director's

proposal for the establishment of an activation period in accordance with

paragraph 5(a) will be decided by a poll of the participants. A favorable

decision shall require an 85 percent majority of total credit arrangements of

participants eligible to vote. The decision shall be notified to the Fund.

(c)

A participant shall not be eligible to vote if, based on its present

and prospective balance of payments and reserve position, the member is not

included in the financial transactions plan for transfers of its currency at the

time of the decision on a proposal for an activation period.

(d)

An activation period shall become effective only if it is

accepted by participants pursuant to paragraph 5(b) and is then approved by the

Executive Board.

Paragraph 6. Resource Mobilization Plans and Calls

(a)

To fund outright purchases during an activation period and

commitments under arrangements approved during an activation period, calls

under individual credit arrangements of participants may be made on the basis

of resource mobilization plans approved by the Executive Board normally on a

quarterly basis in conjunction with the quarterly financial transactions plan for

the General Resources Account. Such resource mobilization plans shall specify

for each participant the maximum amount for which calls may be made during

the applicable period. The Executive Board may at any time amend such a plan

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International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 9

to change the maximum amounts and period for calls. With respect to the

allocation of the maximum amounts among participants, the resource

mobilization plan shall normally establish an allocation that would result in the

available commitments of participants being of equal proportion relative to their

credit arrangements.

(b)

A participant shall not be included in the resource mobilization

plan when, based on its present and prospective balance of payments and

reserve position, the member is not included and is not being proposed by the

Managing Director to be included in the list of countries in the quarterly

financial transactions plan for transfers of its currency.

(c)

Calls during the period of a resource mobilization plan shall be

made on participants by the Managing Director with due regard to the objective

specified in paragraph 6(a) of achieving available commitments of participants

that are of equal proportion relative to their credit arrangements. No call shall be

made on a participant that has been included in the resource mobilization plan

if, at the time of such call, the member's currency is not being used in transfers

under the financial transactions plan because of the member's balance of

payments and reserve position.

(d)

When the Fund makes a call pursuant to this paragraph 6, the

participant shall promptly make the transfer in accordance with the call.

Paragraph 7. Procedures for Special Calls

(a)

Calls pursuant to paragraph 11(e) may be made at any time

with due regard to the objective specified in paragraph 6(a) of achieving

available commitments of participants that are of equal proportion relative to

their credit arrangements, provided that no such call shall be made on a

participant, when, based on its present and prospective balance of payments and

reserve position, the member is not included and is not being proposed by the

Managing Director to be included in the list of countries in the quarterly

financial transactions plan for transfers of its currency or, if the member has

been included in the financial transactions plan, when, at the time of such call,

the member's currency is not being used in transfers under such plan because of

the member's balance of payments and reserve position. Calls under this

paragraph 7(a) shall not be subject to the procedures set forth in either

paragraph 5 or paragraph 6.

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10 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

(b)

Calls pursuant to paragraph 23 may be made at any time; they

shall not be subject to the procedures set forth in either paragraph 5 or

paragraph 6.

(c)

When the Fund makes a call pursuant to this paragraph 7, the

participant shall promptly make the transfer in accordance with the call.

Paragraph 8. Nature and Evidence of Indebtedness

(a)

A participant's claim on the Fund arising from calls under this

decision shall be in the form of a loan to the Fund; provided that, at the request

of a participant, the Fund shall issue to the participant and the participant shall

purchase, for up to the amount of any call on that participant, one or more

promissory notes (each a "Note" or together the "Notes") that have the same

substantive terms as loans extended under this decision and are subject to the

General Terms and Conditions for NAB Notes set forth in Annex II to this

decision (the "GTC"). The GTC may be amended by a decision of the Fund

with the agreement of participants representing 85 percent of total credit

arrangements, provided that any amendment of the GTC shall be consistent with

the terms of this decision. The amended GTC shall apply upon effectiveness to

all outstanding Notes issued under this decision.

(b)

In cases where a participant's claim on the Fund is in the form

of a loan, the Fund shall issue to the participant, at its request, instruments

evidencing the Fund's indebtedness. The form of the instruments shall be

agreed between the Fund and the participant. Upon repayment of the amount of

any such instrument and all accrued interest, the instrument shall be returned to

the Fund for cancellation. If less than the amount of any such instrument is

repaid, the instrument shall be returned to the Fund and a new instrument for the

remainder of the amount shall be substituted with the same maturity date as in

the old instrument.

(c)

In cases where a participant's claim on the Fund is in the form

of Notes, such Notes shall be issued in book entry form. Upon the request of a

participant, the Fund shall issue a registered Note substantially in the form as set

out in the Appendix to the GTC. Upon repayment of any Note and all accrued

interest, the Note shall be returned to the Fund for cancellation. If less than the

amount of any such Note is repaid, the Note shall be returned to the Fund and a

new Note for the remainder of the amount shall be substituted with the same

maturity date as in the old Note.

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International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 11

Paragraph 9. Interest

(a)

The Fund shall pay interest on its indebtedness under this

decision at a rate equal to the combined market interest rate computed by the

Fund from time to time for the purpose of determining the rate at which it pays

interest on holdings of special drawing rights or any such higher rate as may be

agreed between the Fund and participants representing 85 percent of the total

credit arrangements.

(b)

Interest shall accrue daily and shall be paid as soon as possible

after each July 31, October 31, January 31, and April 30.

(c)

Interest due to a participant shall be paid, as determined by the

Fund in consultation with the participant, in special drawing rights, in the

participant's currency, in the currency borrowed, in freely usable currencies, or,

with the agreement of the participant, in other currencies that are actually

convertible.

Paragraph 10. Use of Borrowed Currency

The Fund's policies and practices under Article V, Sections 3 and 7 of

the Articles on the use of its general resources, including those relating to the

period of use, shall apply to purchases of currency borrowed by the Fund.

Nothing in this decision shall affect the authority of the Fund with respect to

requests for the use of its resources by individual members, and access to these

resources by members shall be determined by the Fund's policies and practices,

and shall not depend on whether the Fund can borrow under this decision.

Paragraph 11. Repayment by the Fund

(a)

Subject to the other provisions of this paragraph 11, the Fund,

five years after a transfer by a participant in response to a call under this

decision, shall repay the participant an amount equivalent to the transfer

calculated in accordance with paragraph 12. If a drawer for whose purchase

resources were made available under this decision repurchases on a date earlier

than five years after its purchase, the Fund shall repay participants an equivalent

amount during the quarterly period in which the repurchase is made in

accordance with paragraph 11(d). Repayment under this paragraph 11(a) or

under paragraph 11(c) shall be, as determined by the Fund, in the currency

borrowed whenever feasible, in the currency of the participant, in special

drawing rights in an amount that does not increase the participant's holdings of

special drawing rights above the limit under Article XIX, Section 4 of the

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12 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

Articles unless the participant agrees to accept special drawing rights above that

limit in such repayment, in freely usable currencies, or, with the agreement of

the participant, in other currencies that are actually convertible.

(b)

Before the date prescribed in paragraph 1l(a), the Fund, after

consultation with participants, may make repayment in part or in full to one or

several participants in accordance with paragraph 11(d). The Fund shall have

the option to make repayment under this paragraph 11(b) in the participant's

currency, in the currency borrowed, in special drawing rights in an amount that

does not increase the participant's holdings of special drawing rights above the

limit under Article XIX, Section 4 of the Articles unless the participant agrees

to accept special drawing rights above that limit in such repayment, in freely

usable currencies, or, with the agreement of the participant, in other currencies

that are actually convertible.

(c)

Whenever a reduction in the Fund's holdings of a drawer's

currency is attributed to a purchase of currency borrowed under this decision,

the Fund shall promptly repay an equivalent amount to participants. If the Fund

has used resources under this decision to finance a reserve tranche purchase by

a drawer and the Fund's holdings of the drawer's currency that are not subject

to repurchase are reduced as a result of net sales of that currency during a

quarterly period covered by a financial transactions plan, the Fund shall repay at

the beginning of the next quarterly period an amount equivalent to that

reduction to participants, up to the amount of the reserve tranche purchase.

Payments under this paragraph 11(c) shall be allocated among participants in

accordance with paragraph 11(d).

(d)

Repayments under paragraphs 11(a), second sentence, 11(b)

and 11(c) shall be allocated among participants with due regard to the objective

specified in paragraph 6(a) of achieving available commitments of participants

that are of equal proportion relative to their credit arrangements. For each

participant, repayments shall be applied first to the longest outstanding claim

under its credit arrangement. If repayment is to be made in accordance with this

paragraph 11(d) on a claim that has been transferred, the repayment shall be

made to the transferee of such claim.

(e)

Before the date prescribed in paragraph 11(a), a participant may

give notice representing that there is a balance of payments need for repayment

of part or all of the Fund's indebtedness and requesting such repayment. The

participant seeking such repayment shall consult with the Managing Director

and with the other participants before giving notice. The Fund shall give the

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International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 13

overwhelming benefit of any doubt to the participant's representation.

Repayment shall be made promptly after consultation with the participant in

freely usable currencies or in special drawing rights, as determined by the Fund,

or, with the agreement of the participant, in the currencies of other members

that are actually convertible. If the Fund's holdings of currencies in which

repayment should be made are not wholly adequate, the Managing Director

shall make calls on individual participants to provide the necessary balances

under their credit arrangements subject to the limit of their available

commitments. At the time of such call, and if so requested by the participant

seeking early repayment, (i) a participant providing balances under its credit

arrangement that are not balances of a freely usable currency shall ensure that

such balances can be exchanged for a freely usable currency of its choice, and

(ii) a participant providing balances under its credit arrangement that are

balances of a freely usable currency, shall collaborate with the Fund and other

members to enable such balances to be exchanged for another freely usable

currency.

(f)

When a repayment is made on a claim arising from a call under

this decision, the amount that can be called for under the credit arrangement of

the participant under which the claim arose as a result of a call under this

decision shall be restored pro tanto.

(g)

Unless otherwise agreed between the Fund and a participating

institution, the Fund shall be deemed to have discharged its obligations to a

participating institution to make repayment in accordance with the provisions of

this paragraph 11 or to pay interest in accordance with the provisions of

paragraph 9 if the Fund transfers an equivalent amount in special drawing rights

to the member in which the participating institution is established.

Paragraph 12. Rates of Exchange

(a)

The value of any transfer shall be calculated as of the date of

the dispatch of the instructions for the transfer. The calculation shall be made in

terms of the special drawing right in accordance with Article XIX, Section 7(a)

of the Articles, and the Fund shall be obliged to repay an equivalent value.

(b)

For all of the purposes of this decision, the value of a currency

in terms of the special drawing right shall be calculated by the Fund in

accordance with Rule O-2 of the Fund's Rules and Regulations.

Paragraph 13. Transferability

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14 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

(a)

No participant or non-participant holder may transfer all or any

part of its claim to repayment under a credit arrangement except (i) in

accordance with this paragraph 13 or (ii) with the prior consent of the Fund and

on such terms and conditions as the Fund may approve.

(b)

All or part of any claim to repayment under a credit

arrangement may be transferred at any time to a participant or to a

non-participant that is either (i) a member of the Fund, (ii) the central bank or

other fiscal agency designated by any member for purposes of Article V,

Section 1 of the Articles ("other fiscal agency"), or (iii) an official entity that

has been prescribed as a holder of special drawing rights pursuant to Article

XVII, Section 3 of the Articles.

(c)

As from the value date of the transfer, the transferred claim

shall be held by the transferee on the same terms and conditions as claims

originating under its credit arrangement (in the case of transferees that are

participants) or as the claim was held by the transferor (in the case of transferees

that are non-participants), except that (i) the transferee shall have the right to

request early repayment of the transferred claim on balance of payments

grounds pursuant to paragraph 11(e) only if the transferee is a member, or an

institution of a member, whose balance of payments and reserve position, at the

time of the transfer, is considered sufficiently strong for its currency to be

usable in transfers under the Fund's financial transactions plan; (ii) if the

transferee is a non-participant, references to the participant's currency shall be

deemed to refer (A) if the transferee is a member, to the transferee's currency,

(B) if the transferee is an institution of a member, to the currency of that

member, and (C) in other cases, to a freely usable currency as determined by the

Fund; and (iii) claims transferred in accordance with this paragraph 13 shall be

considered drawn balances of the first transferor participant for purposes of

determining the available commitment under its credit arrangement, and claims

obtained by a participant under a transfer shall not be considered drawn

balances of the transferee for purposes of determining the available commitment

under its credit arrangement.

(d)

The price for the claim transferred shall be as agreed between

the transferee and the transferor.

(e)

The transferor of a claim shall inform the Fund promptly of the

claim that is being transferred, the name of the transferee, the amount of the

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International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 15

claim that is being transferred, the agreed price for transfer of the claim, and the

value date of the transfer.

(f)

The transfer shall be registered by the Fund and the transferee

shall become the holder of the claim if the transfer is in accordance with the

terms and conditions of this decision. Subject to the foregoing, the transfer shall

be effective as of the value date agreed between the transferee and the

transferor.

(g)

Notice to or by a transferee that is a non-participant shall be in

writing or by rapid means of communication and shall be given to or by the

fiscal agency designated by the transferee in accordance with Article V,

Section 1 of the Articles and Rule G-1 of the Rules and Regulations of the Fund

if the transferee is a member, or to or by the transferee directly if the transferee

is not a member.

(h)

If all or part of a claim is transferred during a quarterly period

as described in paragraph 9(b), the Fund shall pay interest to the transferee on

the amount of the claim transferred for the whole of that period.

(i)

Unless otherwise agreed between the Fund and a transferee that

is either a participating institution or the central bank or other fiscal agency

designated by any member for purposes of Article V, Section 1 of the Articles,

the Fund shall be deemed to have discharged its obligations to make repayment

to such transferee in special drawing rights in accordance with paragraph 11 or

to pay interest in special drawing rights in accordance with paragraph 9 if the

Fund transfers an equivalent amount in special drawing rights to the account of

the member in which the institution is established.

(j)

If requested, the Fund shall assist in seeking to arrange

transfers.

(k)

The transferee of a claim may request at the time of transfer

that a claim in the form of a loan be exchanged by the Fund for a Note on the

same substantive terms subject to the GTC, or that a claim in the form of a Note

be exchanged for a loan claim on the same substantive terms. (l) Derivative

transactions in respect of any claim under this decision, and transfer of

participation interests in any claim, are prohibited.

Paragraph 14. Notices

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16 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

Notice to or by a participating member under this decision shall be in

writing or by rapid means of communication and shall be given to or by the

fiscal agency of the participating member designated in accordance with Article

V, Section 1 of the Articles and Rule G-1 of the Rules and Regulations of the

Fund. Notice to or by a participating institution shall be in writing or by rapid

means of communication and shall be given to or by the participating

institution.

Paragraph 15. Amendment

(a)

Except as provided in paragraphs 4(b), 15(b) and 16, this

decision may be amended during the period prescribed in paragraph 19(a) and

any subsequent renewal periods that may be decided pursuant to paragraph

19(b) only by a decision of the Fund and with the concurrence of participants

representing 85 percent of total credit arrangements. Such concurrence shall not

be necessary for the modification of the decision on its renewal pursuant to

paragraph 19(b).

(b)

If in its view an amendment materially affects the interest of a

participant that voted against the amendment, the participant shall have the right

to withdraw its adherence to this decision by giving notice to the Fund and the

other participants within 90 days from the date the amendment was adopted.

This provision may be amended only with the consent of all participants.

Paragraph 16. Withdrawal of Adherence

Without prejudice to paragraph 15(b), a participant may withdraw its

adherence to this decision in accordance with paragraph 19(b) but may not

withdraw within the period prescribed in paragraph 19(a) except with the

agreement of the Fund and all participants. This provision may be amended

only with the consent of all participants.

Paragraph 17. Withdrawal from Membership

If a participating member or a member whose institution is a participant

withdraws from membership in the Fund, the participant's credit arrangement

shall cease at the same time as the withdrawal takes effect. The Fund's

indebtedness under the relevant credit arrangement shall be treated as an

amount due from the Fund for the purpose of Article XXVI, Section 3 and

Schedule J of the Articles.

Amendment of the International Monetary Agreements Act 1947 Schedule 1

International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 17

Paragraph 18. Suspension of Exchange Transactions and Liquidation

(a)

The right of the Fund to make calls under paragraphs 6, 11(e),

and 23 and the obligation to make repayments under paragraph 11 shall be

suspended during any suspension of exchange transactions under Article XXVII

of the Articles.

(b)

In the event of liquidation of the Fund, credit arrangements

shall cease and the Fund's indebtedness shall constitute liabilities under

Schedule K of the Articles. For the purpose of paragraph 1(a) of Schedule K,

the currency in which the liability of the Fund shall be payable shall be first the

currency borrowed, then the participant's currency and finally the currency of

the drawer for whose purchases transfers were made by the participants in

connection with calls under paragraph 6.

Paragraph 19. Period and Renewal

(a)

This decision shall continue in existence until November 16,

2012. When considering a renewal of this decision for any period following the

period referred to in this paragraph 19(a), the Fund and the participants shall

review the functioning of this decision and, in particular, (i) the experience with

the procedures for activation and (ii) the impact of the Fourteenth General

Review of Quotas on the overall size of quotas, and shall consult on any

possible modifications.

(b)

This decision may be renewed for such period or periods and

with such modifications, subject to paragraphs 4(b), 15(b) and 16, as the Fund

may decide. The Fund shall adopt a decision on renewal and modification, if

any, not later than twelve months before the end of the period prescribed in

paragraph 19(a). Any participant may advise the Fund not less than six months

before the end of the period prescribed in paragraph 19(a) that it will withdraw

its adherence to the decision as renewed. In the absence of such notice, a

participant shall be deemed to continue to adhere to the decision as renewed.

Withdrawal of adherence in accordance with this paragraph 19(b) by a

participant shall not preclude its subsequent adherence in accordance with

paragraph 3(b).

(c)

If this decision is terminated or not renewed, paragraphs 8

through 14, 17 and 18(b) shall nevertheless continue to apply in connection with

any indebtedness of the Fund under credit arrangements in existence at the date

of the termination or expiration of the decision until repayment is completed. If

Schedule 1 Amendment of the International Monetary Agreements Act 1947

18 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

a participant withdraws its adherence to this decision in accordance with

paragraph 15(b), paragraph 16, or paragraph 19(b), it shall cease to be a

participant under the decision, but paragraphs 8 through 14, 17 and 18(b) of the

decision as of the date of the withdrawal shall nevertheless continue to apply to

any indebtedness of the Fund under such former credit arrangement until

repayment has been completed.

Paragraph 20. Interpretation

Any question of interpretation raised in connection with this decision

(including the GTC) which does not fall within the purview of Article XXIX of

the Articles shall be settled to the mutual satisfaction of the Fund, the

participant or transferee of a claim raising the question, and all other

participants. For the purpose of this paragraph 20 participants shall be deemed

to include those former participants to which paragraphs 8 through 14, 17 and

18(b) continue to apply pursuant to paragraph 19(c) to the extent that any such

former participant is affected by a question of interpretation that is raised.

Paragraph 21. Relationship with the General Arrangements to Borrow and

Associated Borrowing Arrangements

(a)

When considering whether to activate the New Arrangements

to Borrow or the General Arrangements to Borrow, the Fund shall be guided by

the principle that the New Arrangements to Borrow shall be the facility of first

and principal recourse, except that in the event that a proposal for the

establishment of an activation period under the New Arrangements to Borrow is

not accepted under paragraph 5(a), a proposal for calls may be made under the

General Arrangements to Borrow.

(b)

Outstanding drawings and available commitments under the

New Arrangements to Borrow and the General Arrangements to Borrow shall

not exceed SDR 367,467.36 million, or such other amount of total credit

arrangements as may be in effect in accordance with this decision. The available

commitment of a participant under the New Arrangements to Borrow shall be

reduced pro tanto by any outstanding drawings on, and commitments of, the

participant under the General Arrangements to Borrow. The available

commitment of a participant under the General Arrangements to Borrow shall

be reduced pro tanto by the extent to which its credit arrangement under the

General Arrangements to Borrow exceeds its available commitment under the

New Arrangements to Borrow.

Amendment of the International Monetary Agreements Act 1947 Schedule 1

International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 19

(c)

References to drawings and commitments under the General

Arrangements to Borrow shall include drawings and commitments under the

Associated Borrowing Arrangements referred to in paragraph 23 of the General

Arrangements to Borrow.

Paragraph 22. Other Borrowing Arrangements

Nothing in this decision shall preclude the Fund from entering into any

other types of borrowing arrangements.

Paragraph 23. Transitional Arrangements for Amendments Adopted Pursuant to

Decision No. 14577-(10/35), adopted on April 12, 2010

At the request of a participant that holds claims, either in the form of loans or

notes, on the Fund under bilateral borrowing agreements entered into by the

Fund prior to the effectiveness of the amendments to this decision set forth in

Decision No. 14577-(10/35), adopted on April 12, 2010, the Managing Director

shall make calls under the credit arrangement of such a participant to fund the

repayment of such claims. Similarly, at the request of the relevant participant,

calls shall be made on a participant that is a participating institution for the

repayment of such claims held by the member of which it is an official

institution or by the central bank or other fiscal agency designated by the

member, or on a participant that is a member for the repayment of such claims

held by the central bank or other fiscal agency designated by the member.

Notwithstanding paragraph 11(a), the maturity date of claims under credit

arrangements arising from such calls shall be the maturity date of the bilateral

borrowing agreement claim for whose repayment the call was made.

Paragraph 24. Delay in Drawings

No drawings shall be made under this decision until participants

representing at least 70 percent of the total credit arrangements of new

participants listed in Annex I have adhered to this decision in accordance with

paragraph 3(c).

Schedule 1 Amendment of the International Monetary Agreements Act 1947

20 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

Annex I

Participants and Amount of Credit Arrangements 1/

(in Millions of Special Drawing Rights)

Current Credit

Arrangements

New Credit

Arrangements

Current Participants

Australia 801.29

4,370.41

Austria 407.57

3,579.24

Banco Central de Chile

340.00

1,360.00

Belgium 956.60

7,861.85

Canada 1,380.99

7,624.43

Danmarks Nationalbank

367.01

3,207.78

Deutsche Bundesbank

3,518.75

25,370.81

Finland

340.00 2,231.76

France

2,549.29 18,657.38

Hong Kong Monetary Authority

340.00 340.00

Italy

1,752.95 13,578.03

Japan

3,518.75 65,953.20

Korea

340.00 6,583.44

Kuwait

341.29 341.29

Luxembourg

340.00 970.59

Malaysia

340.00 340.00

Netherlands

1,301.85 9,043.72

Norway

378.88

3,870.94

Saudi Arabia

1,760.86 11,126.03

Singapore

340.00 1,276.52

Spain

664.77 6,702.18

Sveriges Riksbank

849.76 4,439.74

Swiss National Bank

1,540.26 10,905.42

Thailand

340.00

United Kingdom

2,549.29 18,657.38

United States

6,639.83 69,074.27

New Participants

Bank of Israel

500.00

Brazil

8,740.82

China

31,217.22

Cyprus

340.00

Greece

1,654.51

India

8,740.82

Ireland

1,885.52

Amendment of the International Monetary Agreements Act 1947 Schedule 1

International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 21

Mexico

4,994.76

New Zealand

624.34

Philippines

340.00

Portugal

1,542.13

Russian Federation

8,740.82

South Africa

340.00

Total

367,467.36

1/ Credit arrangements are subject to a minimum of SDR 340 million.

Annex II

General Terms and Conditions for Notes Issued by the International

Monetary Fund under the New Arrangements to Borrow (the "NAB")

These are the General Terms and Conditions for the promissory notes (the

"Notes") issued by the International Monetary Fund (the "Fund") in accordance

with paragraphs 8 and 13(k) of Executive Board Decision No. 11428-(97/6),

January 27, 1997, on the New Arrangements to Borrow (the "NAB Decision"),

as amended. Terms that are not otherwise defined in these General Terms and

Conditions shall have the meaning ascribed to them in the NAB Decision.

Paragraph 1. Issuance of Notes to Participants and Other Holders.

(a)

At the request of a participant pursuant to paragraph 8(a) of the

NAB Decision the Fund will issue to the participant, and the participant shall

purchase, Notes in the amount requested, up to the amount of the Fund's call on

the participant under its credit arrangement. At the request of the transferee of a

loan claim, the Fund will issue Notes to the transferee in exchange for the loan

claim pursuant to paragraph 13(k) of the NAB Decision.

(b)

Notes shall be denominated in the special drawing right.

Paragraph 2. Form, Delivery and Custody of Notes.

(a)

Notes will be issued in book entry form. The Fund will

establish and maintain in its records a book entry account in the name of each

holder recording pertinent details of all Notes issued, including the number,

issue date, principal amount, and maturity date. As of the value date of each

purchase, or of each exchange or transfer of a Note in accordance with

paragraph 13 of the NAB Decision, the Fund will make an appropriate entry in

its records regarding details of the Note purchased or transferred. The making of

such an entry in the records of the Fund shall constitute a taking of delivery of

Schedule 1 Amendment of the International Monetary Agreements Act 1947

22 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

the Note by the purchaser or transferee, and the person so listed with respect to

such Note shall be the holder thereof for all purposes.

(b)

Upon the request of a holder, the Fund will issue to the holder a

registered Note substantially in the form set out in the Appendix to these

General Terms and Conditions, including without limitation the legend

regarding restrictions on transfer of Notes. Each such registered Note will bear

as its issue date the value date of the purchase of the Note or the value date of

the loan claim for which it was exchanged pursuant to paragraph 13(k) of the

NAB Decision and shall be issued in the name of the relevant holder. Unless

otherwise agreed between a holder and the Fund, the Fund will keep such

registered Notes in custody for the holder, and acceptance of custody by the

Fund shall constitute delivery of such registered Notes to the holder.

Paragraph 3. Interest.

(a)

The Fund shall pay interest on Notes at a rate equal to the

combined market interest rate computed by the Fund from time to time for the

purpose of determining the rate at which it pays interest on holdings of special

drawing rights or any such higher rate as may be agreed between the Fund and

participants representing 85 percent of the total credit arrangements under the

NAB Decision.

(b)

Interest shall accrue daily and shall be paid as soon as possible

after each July 31, October 31, January 31, and April 30. (c) Interest due to a

holder shall be paid, as determined by the Fund in consultation with the holder,

in special drawing rights, in the holder's currency if the holder is a member, in

the currency borrowed, in freely usable currencies, or, with the agreement of the

holder, in other currencies that are actually convertible.

Paragraph 4. Maturity; Repayment by the Fund.

(a)

Notes have a maturity of five years, provided that a Note issued

pursuant to paragraph 13(k) of the NAB Decision shall have the maturity of the

loan claim for which it was exchanged. Repayment of the Note principal to a

holder is made in accordance with paragraph 11 of the NAB Decision.

(b)

Unless otherwise agreed between the Fund and a holder that is

either a participating institution or the central bank or other fiscal agency

designated by a member for purposes of Article V, Section 1 of the Articles, the

Fund shall be deemed to have discharged its obligations to such holder to make

Amendment of the International Monetary Agreements Act 1947 Schedule 1

International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 23

repayment in special drawing rights in accordance with paragraph 11 of the

NAB Decision or to pay interest in special drawing rights in accordance with

paragraph 3 of these General Terms and Conditions, if the Fund transfers an

equivalent amount in special drawing rights to the account of the member in

which the institution is established.

(c)

The Fund will cancel a Note (i) upon payment of the principal

amount of the Note and all accrued interest, (ii) if a Note is transferred in

accordance with paragraph 6 of these General Terms and Conditions, or (iii) if a

Note is exchanged for a loan claim in accordance with paragraph 13(k) of the

NAB Decision. If the Fund makes early payment of less than the principal

amount of a Note, the Fund will cancel the Note and issue a new Note for the

remainder of the amount.

(d)

Any registered Note to be cancelled by the Fund that is not

already in the custody of the Fund shall be surrendered by the holder to the

Fund for cancellation.

Paragraph 5. Rates of Exchange.

For all of the purposes of these General Terms and Conditions, the

value of a currency in terms of the special drawing right shall be calculated by

the Fund in accordance with Rule O-2 of the Fund's Rules and Regulations.

Paragraph 6. Transferability of Notes.

(a)

A holder may not transfer all or any part of its Notes except (i)

in accordance with this paragraph 6 or (ii) with the prior consent of the Fund

and on such terms and conditions as the Fund may approve. Any other

purported transfer by a participant or other holder shall be of no force or effect.

(b)

All or part of any Note may be transferred at any time to a

participant or to a non-participant that is either (i) a member of the Fund, (ii) the

central bank or other fiscal agency designated by any member for purposes of

Article V, Section 1 of the Articles ("other fiscal agency"), or (iii) an official

entity that has been prescribed as a holder of special drawing rights pursuant to

Article XVII, Section 3 of the Articles.

(c)

As from the value date of the transfer, the Note shall be held by

the transferee on the same terms and conditions as Notes originating under its

credit arrangement (in the case of transferees that are participants in the NAB),

Schedule 1 Amendment of the International Monetary Agreements Act 1947

24 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

or as the Note was held by the transferor (in the case of transferees that are

non-participants in the NAB), except that (i) the transferee shall have the right

to request early repayment of the transferred Note on balance of payments

grounds pursuant to paragraph 11(e) of the NAB Decision only if the transferee

is a member, or the institution of a member, whose balance of payment and

reserve position, at the time of the transfer, is considered sufficiently strong for

its currency to be usable in transfers under the Fund's financial transactions

plan, or, in the case of the HKMA, the balance of payments position of Hong

Kong at the time of the transfer is, in the opinion of the Fund, sufficiently strong

to justify such a right; (ii) if the transferee is a non-participant, references in

paragraph 11 of the NAB Decision to the participant's currency shall be deemed

to refer (A) if the transferee is a member, to the transferee's currency, (B) if the

transferee is an institution of a member, to the currency of that member, and (C)

in other cases, to a freely usable currency as determined by the Fund; and (iii)

Notes transferred in accordance with this paragraph 6 shall be considered drawn

balances of the first transferor participant for purposes of determining the

available commitment under its credit arrangement, and Notes obtained by a

transferee participant shall not be considered drawn balances of such participant

for purposes of determining the available commitment under its credit

arrangement.

(d)

The price for the Note transferred shall be as agreed between

the transferee and the transferor.

(e)

The transferor of a Note shall inform the Fund promptly of the

Note that is being transferred, the name of the transferee, the amount of the

Note that is being transferred, the agreed price for transfer of the Note, and the

value date of the transfer.

(f)

The transfer shall be registered by the Fund and the transferee

shall become the holder of the Note only if such transfer is in accordance with

the terms and conditions of the NAB Decision and these General Terms and

Conditions. Subject to the foregoing, upon registration, the transfer shall be

effective as of the value date agreed between the transferee and the transferor.

(g)

The transferee of a Note may request at the time of transfer that

the Note be exchanged by the Fund for a loan claim pursuant to paragraph 13(k)

of the NAB Decision to be held by the transferee on the same substantive terms

as the transferred Note.

(h)

Notice to or by a transferee that is a non-participant shall be in

writing or by rapid means of communication and shall be given to or by the

Amendment of the International Monetary Agreements Act 1947 Schedule 1

International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 25

fiscal agency designated by the transferee in accordance with Article V,

Section 1 of the Articles and Rule G-1 of the Rules and Regulations of the Fund

if the transferee is a member, or to or by the transferee itself if the transferee is

not a member.

(i)

If all or part of a Note is transferred during a quarterly period as

described in paragraph 3(b) of these General Terms and Conditions, the Fund

shall pay interest to the transferee holder on the relevant interest payment date

on the amount of the Note transferred for the whole of that period.

(j)

If requested, the Fund shall assist in seeking to arrange

transfers.

(k)

For all transfers under this paragraph 6, the Fund will cancel the

Note that has been transferred in whole or in part and, if the Note is a registered

Note, the transferor shall, as a condition for the transfer, surrender for

cancellation any such registered Note that is not already in the custody of the

Fund. Upon cancellation of the relevant Note, the Fund will issue a new Note in

the name of the transferee for the principal amount transferred and, where

appropriate, a new Note in the name of the transferor for any part of the

principal amount retained by it. The issue date of each new Note will be the

issue date of the cancelled Note, and the new Note will have the same maturity

date (including any maturity date resulting from extensions of a previous

maturity date) that is applicable to the cancelled Note. The form and delivery of

each new Note will be as specified in paragraph 2 of these General Terms and

Conditions.

(l)

Derivative transactions in respect of any Note, and transfers of

participation interests in any Note, are prohibited.

Paragraph 7. Notices

Notice to or by a holder who is a participating member shall be in

writing or by rapid means of communication and shall be given to or by the

fiscal agency of the participating member designated in accordance with Article

V, Section 1 of the Articles and Rule G-1 of the Rules and Regulations of the

Fund. Notice to or by a holder who is a participating institution shall be in

writing or by rapid means of communication and shall be given to or by the

participating institution.

Paragraph 8. Interpretation.

Schedule 1 Amendment of the International Monetary Agreements Act 1947

26 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

Any question of interpretation raised in connection with any Note

which does not fall within the purview of Article XXIX of the Articles shall be

settled to the mutual satisfaction of the Fund, the holder raising the question,

and all participants in the NAB. For the purpose of this paragraph 8, holder shall

be deemed to include those former participants in the NAB to which paragraphs

8 through 14, 17 and 18(b) of the NAB Decision continue to apply pursuant to

paragraph 19(c) of the NAB Decision to the extent that any such former

participant is affected by a question of interpretation that is raised.

Paragraph 9. NAB Decision and Changes in the GTC

Notes subject to these General Terms and Conditions, and any claims

thereunder or with respect thereto, are subject to the terms and conditions of the

NAB Decision as in effect from time to time. Any amendments to these General

Terms and Conditions adopted in accordance with paragraph 8(a) of the NAB

Decision shall apply to all outstanding Notes issued under the NAB Decision.

Amendment of the International Monetary Agreements Act 1947 Schedule 1

International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010 27

Annex II, Appendix

Form of Registered NAB Note

Number _______________ SDR ____________________

INTERNATIONAL MONETARY FUND

REGISTERED NAB NOTE

Issue Date: _______________

Maturity Date:

The INTERNATIONAL MONETARY FUND ("the Fund"), for value

received, hereby promises to pay to _________________________________,

being the registered holder of this Note, an amount equivalent to

______________________ Special Drawing Rights (SDR ________________)

on the maturity date specified above and to pay interest thereon as set forth

below.

This Note is issued in accordance with the New Arrangements to

Borrow (the "NAB") and the General Terms and Conditions for Notes Issued by

the International Monetary Fund under the New Arrangements to Borrow (the

"General Terms and Conditions"). Each holder of this Note is deemed to have

agreed to the General Terms and Conditions and relevant terms of the NAB, as

they may be amended in accordance with the NAB Decision, including without

limitation the maturity date, the interest rate, the terms and conditions of early

payment at the request of the Fund or the holder hereof, and the terms and

conditions of transfer of this Note or any part thereof.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES

LAWS OF ANY JURISDICTION.

IN NO EVENT SHALL ANY HOLDER OF THIS NOTE SELL, ASSIGN,

DISPOSE OF OR OTHERWISE TRANSFER THIS NOTE, DIRECTLY OR

INDIRECTLY, TO ANY ENTITY THAT IS NOT (I) A MEMBER OF THE

FUND, (II) THE CENTRAL BANK OR OTHER FISCAL AGENCY

DESIGNATED BY A MEMBER OF THE FUND FOR PURPOSES OF

ARTICLE V, SECTION 1 OF THE FUND'S ARTICLES OF AGREEMENT,

(III) AN OFFICIAL ENTITY THAT HAS BEEN PRESCRIBED AS A

Schedule 1 Amendment of the International Monetary Agreements Act 1947

28 International Monetary Agreements Amendment Bill (No. 1) 2010 No. , 2010

HOLDER OF SPECIAL DRAWING RIGHTS PURSUANT TO ARTICLE

XVII, SECTION 3 OF THE FUND'S ARTICLES OF AGREEMENT, OR (IV)

AN ENTITY IN RESPECT OF WHICH THE FUND HAS CONSENTED IN

WRITING TO THE TRANSFER PURSUANT TO PARAGRAPH 6(A) OF

THE GENERAL TERMS AND CONDITIONS.

ANY DERIVATIVE TRANSACTIONS IN RESPECT OF THIS NOTE, AND

TRANSFERS OF PARTICIPATION INTERESTS IN THIS NOTE, ARE

PROHIBITED.

The Fund shall pay interest on this Note at a rate equal to the combined

market interest rate computed by the Fund from time to time for the purpose of

determining the rate at which it pays interest on holdings of special drawing

rights or any such higher rate as may be agreed between the Fund and

participants representing 85 percent of the total credit arrangements under the

NAB. Interest shall accrue daily and shall be paid as soon as possible after each

July 31, October 31, January 31, and April 30. Interest due to a holder shall be

paid, as determined by the Fund in consultation with the holder, in special

drawing rights, in the holder's currency if the holder is a member, in the

currency borrowed, or in other currencies that are actually convertible.

[Signatures]

Commonwealth of Australia Bills

INTERNATIONAL MONETARY AGREEMENTS AMENDMENT BILL (NO. 1) 2010