AUSTRALIA: OTC Derivatives Reform – ASIC Implements Reporting Regime

Thursday July 11 2013

Final rules around over-the-counter (OTC) derivatives trade reporting obligations of financial institutions and the regulation of derivative trade repositories in Australia have been released.

The regime is set out in a package of rules and guidance released by ASIC, on 11 July 2013, on a new OTC derivatives reform webpage – including the ASIC Derivative Transaction Rules (Reporting) 2013, ASIC Derivative Trade Repository Rules 2013, Regulatory Guide 249 Derivative trade repositories (RG 249), and explanatory statements and FAQ material.

The Australian reforms have been designed to ensure, as far as possible, consistency with international requirements as well as to maximise the prospects of substituted compliance or sufficient equivalence judgments being reached by foreign regulators. This would help ensure that global markets remain open to Australian participants and infrastructures.

The final package follows consultations launched in March 2013 (refer 13-051MR and 13-066MR). While final trade reporting rules are in place, final regulatory guidance on those rules is expected to be published in coming weeks. In the meantime, FAQ material on the trade reporting rules has been published.

The reporting rules establish which entities will need to report to trade repositories, what information will need to be reported, and when the reporting obligation will start for different classes of reporting entities and different instrument types.

Derivative trade repositories, or data warehouses, maintain electronic databases of records of derivative transactions. The rules for these repositories cover issues such as application requirements and conditions, the manner in which they must provide their services, and ASIC`s approach to regulation of overseas-based repositories.

End users of OTC derivatives (i.e. those that are not financial institutions or intermediaries) will not be covered by the reporting regime. ASIC will consult on their reporting obligations later this year.

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