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.