Consistent with an announcement made by the Federal Treasurer on 10 April 2013, the Government has confirmed that the Australian Office of Financial Management (AOFM) will not purchase any new residential mortgage-backed securities (RMBS). As the Government takes the view that the securitisation market is recovering, the AOFM will also be permitted to sell existing RMBS. The securitisation industry may consider this withdrawal of Government backing to be a little premature as the non-bank lending sector which was drastically affected during the financial crisis, is still reliant on wholesale rather than securitisation markets funding.
The Government has released a range of measures to introduce derivatives reporting and clearing arrangements for the over-the-counter (OTC) derivatives market. Whilst some of the proposals are still the subject of consultation with industry, the Government has signalled its commitment to this area of regulation by the provision of $5.9 million over four years to implement the various reforms. If implemented, this regulation will align Australia with the key components of derivatives markets reform in the UK, Europe and the US.