Following feedback received from market participants on the Australian trade reporting regime, changes have been proposed by ASIC. Although they are stated to be ‘technical’, reporting entities (Australian and international) should be aware of them as the rules are about to change. In this alert we summarise key features of the changes.

ASIC has proposed some changes to the ASIC Derivative Transaction Rules (Reporting) 2013, as described in a recent consultation paper (a link to the paper can be found here). A summary is set out below. ASIC has requested comments on its consultation paper by Friday 29 August.

Reporting by foreign subsidiaries of Australian financial entities

One significant proposal is to require certain foreign subsidiaries of authorised deposit-taking institutions (ADIs) and Australian financial services licensees (AFS licensees) to comply with the reporting regime.

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ASIC has also queried whether a threshold should be applied on a global level and whether a threshold should be applied at all for foreign subsidiaries.

Currently under the reporting regime, these entities need to report but a date has not been set from which they need to start reporting.

Encouraging the use of delegated reporting

ASIC has proposed a new rule to apply to reporting entities which choose to delegate their reporting requirements to another entity. This is intended to encourage the use of delegated reporting by such entities as those in the wealth management sector

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Currently, the Reporting Entity is responsible for fulfilling its obligations under the rules (including responsibility for the accuracy of the reported data) regardless of whether the reporting obligation is delegated.

Tagging by foreign entities

ASIC proposes to require foreign entities which meet their obligations under the Australian reporting regime by complying with a substantially equivalent trade reporting regime overseas to designate (“tag”) the transactions as being reported under the Australian regime. This is to facilitate the Australian regulators to access the reported information

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Other changes

The remainder of ASIC’s proposed changes are summarised in the table below.  The first two changes reflect technical relief that has been granted to some Reporting Entities under temporary class orders or relief instruments.

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And if you are looking for a short refresher…

The Australian trade reporting obligations apply to any derivative activity that meets the definition of “Reportable Transaction” by any person that meets the definition of “Reporting Entity”. A copy of the existing trade reporting rules can be found here and our Alert containing a summary of the trade reporting rules can be found here).