Article 2

For the purposes of Article 13(3) of Regulation (EU) No 648/2012, the legal, supervisory and enforcement arrangements of Australia for the exchange of collateral that are applied to non-centrally cleared derivative transactions regulated by APRA shall be considered equivalent to the requirements of Article 11(3) of Regulation (EU) No 648/2012, where the following conditions are satisfied:

(a)	at least one of the counterparties to those transactions is an APRA covered entity as defined under Prudential Standard CPS 226;

(b)	where variation margin is required to be provided under Regulation (EU) No 648/2012, variation margin is provided on the same day on which it is calculated.

By way of derogation from point (b), where it is established between the counterparties that variation margin cannot consistently be provided on the same day on which it its calculated, the legal, supervisory and enforcement arrangements of Australia shall also be considered as equivalent to the requirements of Article 11(3) of Regulation (EU) No 648/2012 where variation margin is provided within 2 working days of its calculation and the margin period of risk used to calculate the initial margin is adjusted accordingly.