Commonwealth Consolidated Acts

BANKING ACT 1959 - SECT 31

  (1)   An asset in a cover pool must be one of the following:

  (a)   an at call deposit held with an ADI and convertible into cash within 2 business days;

  (b)   a bank accepted bill or certificate of deposit that:

  (i)   matures within 100 days; and

  (ii)   is eligible for repurchase transactions with the Reserve Bank; and

  (iii)   was not issued by the ADI that issued the covered bonds secured by the assets in the cover pool;

  (c)   a bond, note, debenture or other instrument issued or guaranteed by the Commonwealth, a State or a Territory;

  (d)   a loan secured by a mortgage, charge or other security interest over residential property in Australia;

  (e)   a loan secured by a mortgage, charge or other security interest over commercial property in Australia;

  (f)   a mortgage insurance policy or other asset related to a loan covered by paragraph   (d) or (e);

  (g)   a contractual right relating to the holding or management of another asset in the cover pool;

  (h)   a derivative held for one or more of the following purposes:

  (i)   to protect the value of another asset in the cover pool;

  (ii)   to hedge risks in relation to another asset in the cover pool;

  (iii)   to hedge risks in relation to liabilities secured by the assets in the cover pool;

  (i)   an asset of a kind prescribed by the regulations for the purposes of this paragraph.

  (2)   Paragraph   (1)(i) is not limited by paragraphs   (1)(a) to (h).

  (3)   Despite subsection   (1), a cover pool must not contain an asset of a kind prescribed by the regulations for the purposes of this subsection.