In publishing draft rules and regulatory guide for the new regulation of derivative trade repositories in Australia, ASIC has taken the first concrete step to the actual implementation of G20 derivatives reforms in Australia. The journey is on track … what’s next?
Late last year, the Australian Treasury reconfirmed that trade reporting is the first of the G20 derivatives requirements which would be implemented in Australia (see our alert here). On Friday, 15 March, ASIC published drafts of the rules and regulatory guide intended to allow this to happen – through its licensing and regulation of derivative trade repositories operating in Australia. Derivative trade repositories are a cornerstone of global regulatory efforts to increase transparency of transaction information, promote financial stability and support the detection and prevention of market abuse.
ASIC’s draft rulebook supplements the licensing requirement for derivative trade repositories, which was introduced into the Corporations Act late last year (see our alert here). While the amended Corporations Act also allows the Government to determine some of the details of the regulatory regime for trade repositories through making regulations, the Government has not yet confirmed how it might do so.
The proposed rules are broadly in line with international principles of trade repositories regulation and corresponding overseas regimes. Important features of the draft rulebook include:
Click here to view table.
The consultation package also describes the proposed application process for obtaining a trade repository licence (including the information and documentation required upon application).
Comments on the draft rules and regulatory guide can be provided up to 12 April 2013.
Although a critical part of the new regulatory structure, most Australian market participants are likely to be more interested in what happens next. ASIC’s next consultation package in the “OTC space”, which is expected in the next 4 weeks or so, will be the derivative transaction rules (DTRs) relating to trade reporting itself. These rules should actually determine what derivatives need to be reported in Australia, who needs to do the reporting and how it is to be done.