Eligible Securities

Securities must meet certain criteria to be eligible for use in the Reserve Bank's domestic market operations. The Reserve Bank has the discretion to change its eligibility criteria at any time.

1. How to Apply

Applicants must submit all supporting documents, outlined in the application form, before the Reserve Bank will begin reviewing the application.

Australian Government (AGS) and semi-government securities are automatically eligible. Short-term paper (less than 12 months to maturity) is assessed at the issuer level. All other securities are assessed individually.

Any queries should be addressed to eligible_securities@rba.gov.au.

When the RBA rejects an application for repo eligibility, the RBA will send a rejection letter to the applicant at approximately the same time that the RBA publishes the rejection decision in the Outstanding applications and ineligible securities file (see the ‘Schedule of releases’ above).

Should the RBA revoke repo eligibility (for example, because new information is received, existing information is reinterpreted or the RBA’s eligibility criteria is revised), the RBA will promptly send a rejection letter to the applicant and the List of eligible securities file and the Outstanding applications and ineligible securities file will each be updated accordingly the next time they are released (see the ‘Schedule of releases’ above). However, a rejection letter will ordinarily not be sent where a previously eligible security changes in a way that means it no longer meets the RBA’s eligibility criteria (for example, a call notice is issued or a security’s credit rating is downgraded and no longer meet the RBA’s minimum requirements) and a rejection letter might not be sent if the RBA revokes repo eligibility due to a revision to the RBA’s eligibility criteria which has otherwise been communicated by the RBA (for example, by publication on this website).

If an applicant does not agree with the RBA’s decision to reject an application for repo eligibility, or revoke repo eligibility, the applicant may email eligible_securities@rba.gov.au with reasons for why the applicant disagrees with the RBA’s assessment and supporting information.

2. Eligibility Criteria

All criteria must be met on application, and for the term of each transaction. The Reserve Bank can revoke eligibility at any time; where a security posted under repo has its eligibility revoked, the counterparty will be expected to substitute alternative eligible collateral.

Table 1 lists securities that are eligible for transactions in the Reserve Bank's domestic market operations and various facilities. The Reserve Bank only accepts certain securities for some transactions.

2.1 Primary criteria

These criteria apply to all securities. Some security types have additional criteria (section 2.2).

1. Denominated in Australian dollars
2. Lodged and active in Austraclear

   All transactions in domestic market operations are settled in Austraclear.

   The Reserve Bank will not begin assessing securities until they have been issued and are active in Austraclear.

3. Governed by the laws of an Australian state or territory
4. Not a euro entitlement

   The Reserve Bank only accepts securities that are issued directly into Austraclear, as indicated by a ‘domestic’ syndication in Austraclear.

   A euro entitlement exists where an Australian dollar denominated security has been deposited with an international central securities depository (such as Euroclear or Clearstream) as an ‘Investor CSD’ but where Austraclear permits that security to settle through its system as an ‘Issuing CSD’ in the same manner as domestic securities.

5. Senior and unsubordinated

   Eligible securities must not be subordinated to any other unsecured debt securities. However, subordinated tranches of asset-backed securities are eligible if they meet all other criteria.

   Subordination includes:

   • Structural subordination, where debt securities issued by a holding company are subordinated to debt securities issued by its subsidiary. Structurally subordinated securities are ineligible regardless of supporting guarantees from subsidiary issuers.
   • Statutory subordination, where debt is legislated to be subordinated. For example, long-term (i.e. original maturity greater than 400 days) senior unsecured debt issued by Canadian banks after 23 September 2018 is subordinated to short-term senior unsecured debt, as well as long-term senior unsecured debt issued before this date.

   Securities that can be bailed in under a foreign jurisdiction's statutory powers can still be eligible. This includes securities that count towards Total Loss Absorbing Capacity (TLAC) or Minimum Requirement for own funds and Eligible Liabilities (MREL). However, a security is not eligible if it would be bailed in before other unsecured debt securities issued by the same institution. For example, senior non-preferred securities are not eligible.

6. Minimum credit rating

   Table 2: Minimum Average Rating Requirement

   Standard & Poor's equivalent rating

   	Minimum number of ratings	Minimum average rating
   Australian Government and semi-government securities	None	N/A
   New Zealand Government securities	None	N/A
   Australian and New Zealand Government-guaranteed securities	None	N/A
   ADI bonds	2	BBB−
   ADI paper	1	Public
   Corporate bonds	1	BBB
   	2	BBB−
   Commercial paper	1	BBB/A−3
   	2	BBB−
   Asset-backed securities	1	AAA
   Self-securitisations	1	AAA
   Supranational and foreign-government securities	1	AAA
   Other AAA	1	AAA
   Asset-backed commercial paper	1	AAA/A−1

   Ratings must be final, publicly available and from a recognised credit agency (Standard & Poor's, Moody's or Fitch).

   If both the security and issuer are rated by the same recognised credit agency, the Reserve Bank uses the lower of the two, except for:

   • covered bonds, where the security rating is used if available.
   • asset-backed securities and asset-backed commercial paper, where only security ratings are considered.

   If any tranche of an asset-backed security or asset-backed commercial paper program issued after 1 April 2019 is rated by more than one agency, only tranches rated by the same agencies will be considered for repo eligibility.

   Average ratings are calculated by assigning an ordinal ranking (AAA = 1, AA+ = 2, etc.) and taking the average, rounding to the nearest integer (with 0.5 rounding to the lower credit rating).

   A credit rating on negative watch is treated as an immediate one notch downgrade. A negative outlook has no effect.

   Recognised Credit Rating Agencies

   The Reserve Bank will consider requests for additional credit agencies to be recognised. An entity must first be recognised by APRA as an External Credit Assessment Institution before the Reserve Bank will consider a request. Requests should be submitted to eligible_securities@rba.gov.au.

7. Freely tradeable in the secondary market

   Private placement securities can be eligible as long as they are freely tradeable. Trading restrictions that are not allowed include a requirement that a noteholder gains the consent of another party in order to be able to sell the security.

8. Contains a robust, reasonable and fair fallback rate, if the security references BBSW

   All floating rate notes (FRNs) and marketed asset-backed securities issued on or after 1 December 2022, where BBSW is the relevant interest rate for the purposes of calculating coupons, must meet the following criteria in order to be eligible for purchase by the Reserve Bank under repo:

   • Include at least one ‘robust’ and ‘reasonable and fair’ fallback for BBSW in the event that it permanently ceases to exist.
   • A ‘robust’ fallback is one that clearly specifies the method for the calculation of interest that would apply for the purposes of calculating coupon payments. The fallback must also specify a clear and unambiguous trigger event after which the fallback would apply. Acceptable fallbacks would include those that reference AONIA (including AONIA plus or minus a fixed spread). Fallbacks that reference another benchmark interest rate may also be accepted at the Reserve Bank’s discretion. A fallback waterfall may additionally include a fallback to a reference rate that might exist in the future, for example forward-looking term AONIA, subject to it being declared a significant financial benchmark by ASIC at the time the fallback is triggered.
   • A ‘reasonable and fair’ fallback is one that reasonably mitigates the impact on the economic value of the security in the event the fallback is invoked. A fixed-rate fallback would not be considered reasonable and fair for the purposes of these criteria.
   • The robust and reasonable and fair fallback(s) must sit above any other fallbacks that rely on collecting dealer quotes, or on discretion – whether by the issuer, the calculation agent, or any other related or third party – in the fallback waterfall.
   • Include a fallback to apply in the case that BBSW is not available, but where it has not permanently ceased. This fallback must: clearly specify the method for determining the interest that would apply for the purposes of calculating coupon payments; and specify a clear and unambiguous trigger event after which the fallback would apply. An example of an acceptable fallback structure is that provided for the ‘No Index Cessation Effective Date with respect to BBSW’ circumstance in the 2020 ISDA IBOR Fallbacks Supplement. A fallback relying on collecting dealer quotes, or on discretion by the issuer, the calculation agent, or any other party related to the security must not sit at the top of the fallback waterfall.

   From 1 April 2025, all self-securitisations, regardless of the date of issue, will also be required to include at least one robust and reasonable and fair fallback in order to be eligible.

   The following securities are excluded from this requirement for eligibility:

   • FRNs and marketed asset-backed securities issued before 1 December 2022.
   • Tap issuances on or after 1 December 2022 of FRNs and marketed asset-backed securities (ABS) first issued before 1 December 2022.
   • Issuances of ‘refinancing notes’ on or after 1 December 2022, whose proceeds are used to repay existing notes first issued before 1 December 2022 from marketed closed-pool ABS trusts.

   Nevertheless, the inclusion of robust and reasonable and fair fallbacks for securities that are excluded from this requirement is strongly recommended as a matter of prudent risk management (particularly for those securities with a greater length of time to their maturity).

9. Issuer is not domiciled in a tax haven or in a jurisdiction that entails legal risk outside the Reserve Bank's risk appetite
10. Not highly structured

    Securities must not contain structural features that present risks to the Reserve Bank that are complicated or difficult to quantify.

11. Not materially related to the counterparty

    The Reserve Bank considers entities in the same corporate group, or where one entity owns more than 15 per cent of another, to be materially related. The Reserve Bank also considers self-securitised asset-backed securities to be materially related to the ADI whose receivables have been securitised. Counterparties that are materially related to an eligible security will appear on the List of eligible securities.

    The Reserve Bank may grant a related-party exemption for self-securitisations to allow a counterparty to post a materially related security for repos contracted under Exceptional Liquidity Assistance, but not for open market operations or Standing Facilities (see Section 3).

12. Has not entered the closed period to maturity, and no call or redemption notice has been issued

2.2 Additional criteria

The following criteria apply to certain securities:

13. Government-guaranteed securities
    1. Explicit guarantee defined in legislation

       Issuers that meet this requirement include Export Finance Australia, Housing Australia and KFW.

14. Commercial paper
    1. Issued by an Australian company, or an issuer established by Australian legislation

       See the List of Eligible Securities for issuers that meet this requirement.

15. Asset-backed securities, self-securitisations and asset-backed commercial paper
    1. Cash flows are not generated from synthetic assets underlying the transaction

       The Reserve Bank does not accept asset-backed securities where the primary assets are derivatives.

    2. Based on a true sale of assets into a bankruptcy-remote special purpose vehicle
    3. Not particularly complex or unusual

       The Bank assesses the structure of the special purpose vehicle, the underlying assets and structure of the liabilities, as well as any related parties and support features.

    4. Makes regular coupon payments, if the maturity is greater than 12 months
    5. Report data to the Securitisation System each month

       Securitisation submissions are due on the monthly anniversary of the distribution date. For more information see the RBA Securitisations Industry Forum.

       Marked asset-backed securities will cease to be eligible if they do not report on time. Securities will remain ineligible for at least one month, until all outstanding submissions and the next month’s submission have been made.

       Self-securitisations will incur a 15 per cent penalty haircut (in the form of an ‘Additional Discount’, see Margin Ratios) if they do not report on time. The penalty haircut will remain in place until all outstanding submissions and the next month’s submission have been made. However, repo eligibility may also be revoked, including in the event of repeated or extended late submissions. The RBA will notify the Australian Prudential Regulation Authority (APRA) of any late reporting in respect of any self-securitisations.

       Information Providers can contact the Securitisation Support Centre before the deadline to request an extension. These requests will only be granted under exceptional circumstances.

    6. If the pool is revolving, provide a ratings affirmation and an insurability attestation letter (if applicable) at least annually, or on request.
       See Asset-backed Securities Maintenance for more information. Complete the ABS Maintenance Form to submit documents.
    7. Submit completed ABS Maintenance Forms, that meet the RBA’s minimum notice periods, in advance of a:
       • Legal document change – transaction documents are amended. The minimum notice period is 20 business days for legal document changes.
       • Large balance change – more than 10% of pool assets change, including uplifts, downsizes and substitutions. The minimum notice period is 10 business days for large balance changes that do not involve legal document changes.
       • ISIN change – new ISIN is issued from the trust which must be repo eligible from the issue date. The minimum notice period is 10 business days for ISIN changes that do not involve legal document changes.
       See Asset-backed Securities Maintenance for application requirements. To apply, complete the ABS Maintenance Form.
16. Self-securitisations

    1. Remit to the collections account at least weekly. Principal and interest collections must be required to be remitted to the issuer’s collections account at least weekly. This requirement applies to any self-securitisation that the Reserve Bank first approves for repo eligibility after 31 March 2025. Existing self-securitisations (i.e. self-securitisations first approved by the Reserve Bank for repo eligibility on or before 31 March 2025) that do not meet this criteria after 31 March 2025 will incur a higher margin ratio (see Margin Ratios).

    2. Certification: The ADI sponsor must complete, sign and provide to the Reserve Bank a certificate to confirm their compliance with the Reserve Bank’s Eligibility Criteria for self-securitisations. The certificate must be signed by a senior officer of the ADI sponsor (Chief Financial Officer, Group Treasurer, or equivalent) and must be provided to the Reserve Bank at the following times:

       • New self-securitisation applications from 1 April 2025 onwards, the template ‘Certificate – Application for New Eligible Self-securitisation’ must be completed, signed and provided to the Reserve Bank prior to a self-securitisation being granted repo eligibility. Applicants should include this certificate in their application for repo eligibility.
       • Existing eligible self-securitisations the template ‘Annual Certificate – Existing Eligible Self-securitisation’ must be completed, signed and provided to the Reserve Bank between 31 January and 31 March each year, starting in 2025. A separate certificate must be submitted for each existing eligible self-securitisation. Late annual certificate submissions to the RBA may result in penalty haircuts being applied, or revocation of repo eligibility including if the Annual Certificate is late for an extended period. The RBA will notify APRA of any late Annual Certificates.

       Submit your annual certificate for an existing self-securitisation trust using the ABS Maintenance Form.

       The certificates contain certifications which relate to some or all of the following: a comparison of Key Terms of the self-securitisation to a comparable public deal, disapplication of ADI voting power in certain circumstances, existence of Key Legal Opinions, transaction changes, and notice of key events (for more information, see conditions 16c to 16g below).

    3. Key Terms Comparison: The ADI sponsor must certify that (except as expressly disclosed otherwise) the Key Terms of the self-securitisation are substantially similar to the Key Terms of a comparable securitisation under the ADI’s public term securitisation programme over the preceding 10 years. The certification must be completed via the ‘Certificate – Application for new Eligible Self-securitisation’ or ‘Annual Certificate – Existing Eligible Self-securitisation’ template, as applicable (see Condition 16b above).

       A comparable securitisation is one where the type of loans held in the public securitisation are of a substantially similar type as those held in the self-securitisation. For example, if a public securitisation held only residential mortgage loans, then it would likely be comparable to a self-securitisation that held only residential mortgage loans. Conversely, if a public securitisation held personal loans or commercial mortgage loans, then it would not be comparable to a self-securitisation that held only residential mortgage loans.

       If the ADI has undertaken multiple comparable public securitisation transactions in the preceding 10-year period, the ADI should meet this requirement with respect to the most recent one. If the ADI does not have an established public term securitisation within the 10-year period, this requirement does not apply.

       There may be various, good, reasons for differences in Key Terms with respect to an ADI’s self-securitisation and public securitisation programmes, however, it is important that these differences are disclosed to the Reserve Bank (for example, the template certificates referred to in Condition 16b above provide ADIs with an ability to include qualifying disclosure against the required certification that the Key Terms of the self-securitisation are, in all material respects, substantially similar to the equivalent Key Terms of the relevant comparable public term securitisation).

       As a condition of maintaining eligibility status and having regard to such disclosed differences in Key Terms, the Reserve Bank may at its discretion require that an ADI update its self-securitisation transaction documents to remove some or all of the differences in Key Terms. The Reserve Bank understands that any such updates by an ADI to its self-securitisation transaction documents may need to take into account potential restrictions on the making of changes which might be imposed by prudential regulations such as Prudential Standard APS120 (for example, restrictions relating to the provision of implicit support).

       The following provisions are the Key Terms for the purposes of this eligibility criteria:

       • what constitutes the events of default (or similar) under the transaction documents;
       • what constitutes the servicer termination events (or similar) under the transaction documents;
       • what constitutes the trust manager termination events (or similar) under the transaction documents;
       • what constitutes the title perfection events (or similar) under the transaction documents;
       • what constitutes liquidity support (such as liquidity draws and/or principal draws) under the transaction documents;
       • a requirement to maintain a threshold rate in respect of the underlying loans (taking into account the operation of any applicable derivative transactions such as interest rate swaps);
       • a requirement to remit collections from the underlying loans to the trustee of the self-securitisation; and
       • a requirement for the trustee of the self-securitisation to have given first ranking security over the assets of the securitisation trust in favour of an independent security trustee (together with a requirement that the security trustee must enforce the security, if directed, in accordance with the transaction documents, by the relevant secured creditors following the occurrence of an event of default).

    4. Disapplication of the ADI’s Voting Power: From 1 April 2025 onwards, the transaction documents of the self-securitisation must disapply the voting power of the holders of securities (where the relevant holder is the ADI sponsor or a member of the ADI sponsor’s group) in circumstances where a transaction change (see Condition 16f below) relates to the waiver of an event of default, a servicer termination event, or a title perfection event and, at that time, the Reserve Bank is a holder of relevant securities. That is, if a transaction change to effect a waiver of these events would otherwise only occur with the approval of the holders of the relevant securities, neither the ADI nor any member of the ADI’s group may be entitled to exercise any such approval rights, thereby effectively requiring the waiver to be approved by the Reserve Bank.

       For the purposes of this Condition 16d, the holder of a security includes the holder of a beneficial interest in a security (e.g. where the legal interest in a security is held by Austraclear Limited).

    5. Legal Opinions: Starting from 1 April 2025, the Reserve Bank requires certifications that the Key Legal Opinions for each eligible self-securitisation have been issued. The certifications must be completed via the ‘Certificate – Application for new Eligible Self-securitisation’ or ‘Annual Certificate – Existing Eligible Self-securitisation’ template, as applicable (see Condition 16b above).

       For the purpose of this Condition 16e, the Key Legal Opinions are:

       • Transaction Opinion: a transaction opinion prepared by external counsel, covering matters such as the enforceability of obligations of key transaction parties, the authorisations required by the ADI sponsor and its related bodies and the effectiveness of the sale of the relevant securitised loans by the seller to the self-securitisation.
       • Tax Opinion: a tax opinion prepared by external counsel, addressing issues relating to the tax neutrality of the self-securitisation.
       • Trustee Opinion: a trustee opinion prepared by external counsel, covering matters such as the authorisations required by the trustee and security trustee (to enter into and perform their obligations under the relevant transaction documents).

       The Reserve Bank may, at its discretion and on a case by case basis, require that a copy of one or more of the Key Legal Opinions is delivered to the Reserve Bank (on a non-reliance basis) or that one or more of the Key Legal Opinions is refreshed (including, for example, a refresh of a transaction opinion following a material amendment to the transaction document(s) for a self-securitisation, a change in a key transaction party or a material change in applicable law).

    6. Transaction Changes Notification: Starting from 1 April 2025, ADI sponsors must inform the Reserve Bank prior to any self-securitisation transaction changes becoming effective.

       For the purpose of this Condition 16f, a self-securitisation transaction change includes:

       • amendments to transaction documents;
       • entering into new transaction documents (however, the Reserve Bank does not expect an ADI to provide it with prior notice of individual swap transactions being entered into pursuant to an existing ISDA master agreement or sale notices (or similar documents) being entered into pursuant to an existing master sale agreement (or other similar document));
       • waivers of breach of obligations or representation (including compliance with loan eligibility criteria);
       • extensions of grace periods applicable to certain key events;
       • waivers of the occurrence of key events (such as an event of default, servicer termination event, trust manager termination event or title perfection event);
       • releases of parties from some (or all) of their obligations;
       • changes to the parties to transaction documents; and
       • the self-securitisation becoming, or ceasing to be, a member of a tax consolidated group.

       In the case of a transaction change that involves a waiver (including waivers of breaches and waivers of key events such as termination events or triggers (e.g. amortisation events)) or the extension of a grace period in connection with breaches, trigger or termination events or other key events, the notification must be given to the Reserve Bank at least 10 business days in advance.

       In the case of any other transaction change, the notification must be given to the Reserve Bank at least 20 business days in advance.

       In either case, if the transaction change is not being implemented at the request of the ADI and is not within the control of the ADI, the ADI must still notify the Reserve Bank immediately on becoming aware that the transaction change has occurred (or is to occur).

       If there are reasonable grounds for an ADI seeking to implement a transaction change on an expedited basis, the Reserve Bank may (on request by the ADI and on a case-by-case basis) exercise its discretion to reduce the specified notice period.

       In the event of any inconsistency between the minimum notice period specified in Condition 15(g) and this Condition 16(f), the minimum notice period in this Condition 16(f) will prevail.

       Failure to meet Condition 16(f) may result in penalty haircuts being applied or revocation of repo eligibility. The RBA will notify APRA if the RBA becomes aware that any ADI sponsor of a self-securitisation has failed to meet Condition 16(f).

    7. Information Provision:

       • Starting from 1 April 2025, the ADI sponsor must ensure that notices, documentation or other information that is required by the transaction documents of the self-securitisation to be provided to a rating agency or to the holders of securities in the self-securitisation is also copied to the Reserve Bank (regardless of whether the Reserve Bank holds any securities at the relevant time). However, the Reserve Bank does not require the relevant ADI to provide the Reserve Bank with: (1) loan-level or other data to the extent that such information has already been provided to the Reserve Bank via the Reserve Bank’s Securitisation System; or (2) a copy of the monthly trust manager report in respect of a self-securitisation, unless the Reserve Bank expressly requests to receive such a copy.
       • The ADI sponsor should also promptly inform the Reserve Bank if it becomes aware of the occurrence of any of the following events (or similar), irrespective of any notification requirements under the transaction documents: an event of default (or similar), a servicer termination event (or similar); a trust manager termination event (or similar), or a title perfection event (or similar).

       • If the ADI sponsor becomes aware that any information or documentation previously provided to the Reserve Bank, in accordance with the requirements of this criteria, in connection with the self-securitisation is incorrect, misleading or deceptive, the ADI is required to promptly inform the Reserve Bank and, as soon as reasonably practicable thereafter, provide the Reserve Bank with the corrected information or documentation.

         Failure to meet Condition 16(g) may result in penalty haircuts being applied or revocation of repo eligibility. The RBA will notify APRA if the RBA becomes aware that any ADI sponsor of a self-securitisation has failed to meet Condition 16(g).

3. Related-party Exemptions for Self-securitisations

The Reserve Bank may grant a related-party exemption to a counterparty for a self-securitisation which the Reserve Bank considers to be materially related to that counterparty. This exempts the security from criteria 11; the Reserve Bank would purchase the security from the counterparty in repos contracted under Exceptional Liquidity Assistance, but not in open market operations or under the Reserve Bank’s Standing Facilities.

• Exceptional Liquidity Assistance. Related-party exemptions will be considered on a case-by-case basis (Liquidity Facilities Operational Notes, section 4)