Background and legislation
This page provides information on the background and enabling legislation for the ABSF and SFSF.
Australian Business Securitisation Fund
In November 2018 the Treasurer announced the Government’s intention to create the Australian Business Securitisation Fund (ABSF), a $2 billion fund to support the development of funding markets for lenders to small and medium enterprises (SMEs).
The Treasurer also announced that the ABSF would be administered by the AOFM, with investments to be made in securitisations of loans made by SME lenders, including via warehouse facilities.
The ABSF’s enabling legislation provides for the first tranche of $250 million to be transferred to the ABSF’s special account on 1 July 2019. A second tranche of $250 million was transferred on 1 July 2020. Additional transfers, each of $500 million, will occur on 1 July of 2021, 2022 and 2023.
The enabling legislation for the ABSF, the Australian Business Securitisation Fund Act, received Royal Assent on 5 April 2019.
On 10 April 2019 the Treasurer issued legislative instruments which commenced on 16 April 2019. These are the Australian Business Securitisation Fund Rules, and the Australian Business Securitisation Fund Investment Mandate Directions.
Structured Finance Support Fund
In March 2020 the Treasurer announced the Government’s intention to create the Structured Finance Support Fund (SFSF), initially consisting of $15 billion.
The Fund will enable the Government to support continued access to funding markets for small and medium enterprises (SMEs) impacted by the economic effects of the COVID-19.
The Treasurer also announced that the SFSF would be administered by the AOFM. The AOFM will make targeted investments in structured finance markets used by smaller lenders that provide consumer and business finance, investing in rated term securitisations and in rated and unrated securitisation warehouses.
The AOFM acknowledges the ongoing assistance of the Australian Securitisation Forum in making its deliberations. The AOFM would also like to gratefully acknowledge the assistance of officials from the Clean Energy Finance Corporation on elements of the AOFM’s overall strategy.
The enabling legislation for the SFSF, the Structured Finance Support (Coronavirus Economic Response Package) Act 2020, received Royal Assent on 24 March 2020.
The Treasurer has issued the following legislative instruments (commencing on 26 March 2020):
The Legislation and Directions provide the tools for the AOFM to intervene across a wide front in order to support the Government’s objectives to maintain the flow of credit beyond those ADIs who can access the RBA’s Term Funding Facility to Support Lending to Australian Businesses.