Christian Chamorro-Courtland (Western Sydney University, School of Law) has posted The Final Countdown: The Case for Modernising Australia’s Settlement Finality Laws (Journal of Banking and Finance Law and Practice) on SSRN. Here is the abstract:
Australia’s Payment Systems and Netting Act 1998 (Cth) was enacted for a payment systems environment that has changed significantly over the past three decades. The development of distributed ledger technology (DLT), tokenised money and the increasing interlinking of domestic and foreign payment systems raise new questions about whether its settlement finality protections remain adequate for the next generation of payment infrastructure. This article examines whether the PSNA remains fit for purpose and what reforms may be required. It argues that the Act’s technology-neutral language is capable of accommodating properly governed DLT-based systems, although some clarification may be desirable. Cross-border interlinking presents a more significant challenge because the Act lacks a general framework for recognising qualifying foreign payment systems. Drawing on the European Union’s proposed Settlement Finality Regulation as a comparative model, the article proposes targeted modernisation of the PSNA to preserve its existing strengths while extending legal certainty and protection against systemic risk to new technologies and increasingly interconnected payment systems.
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