The ACT does not consider it necessary for new legislation to be introduced to confer new powers on government to intervene in the financial markets or in contracts arising from them. The case for such legislation would be strengthened if it were part of a concerted multinational (e.g. EU/G10) approach to the market disruption risk. However, even in such a case the potential negative consequences of such legislation may outweigh the advantages.
The ACT, in its response points out that:
The authorities do have a role, however, in encouraging market participants to undertake reviews to ensure that standard contract terms, the rules of exchanges, clearing and settlement systems, etc., and the terms of other contracts provide for the consequences of severe market disruption. The ACT will encourage corporates in particular to review their relevant bi-lateral contracts.
The ACT has commented in detail on the Green Paper in case legislation is considered. Regarding proposed powers of suspension of obligations, the ACT believes that suspensions:
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