The Australian Securities and Investments Commission (ASIC) today released the findings of its most recent assessment of the SFE Clearing Corporation Pty Ltd (SFECC) and the first assessment of Austraclear Limited (Austraclear).
SFE Clearing Corporation Pty Ltd (SFECC) provides clearing and settlement services in relation to derivatives traded on SFE's market. Austraclear, part of the SFE group, is a central securities depository providing clearing and settlement facilities for a range of over the counter products.
Under the Corporations Act 2001, ASIC is required to conduct an annual assessment of how well a licensed clearing and settlement facility is complying with its obligations to supervise its markets.
ASIC's report concludes that SFECC and Austraclear have adequate arrangements for supervising their respective clearing and settlement facilities including arrangements for:
- handling conflicts between its commercial interests and the need to ensure that the clearing and settlement facility's services are provided in a fair and effective way; and
- enforcing compliance with its operating rules.
Copies of the reports are available from the ASIC website at www.asic.gov.au.
Background
A clearing and settlement facility is defined under the Corporations Act as a facility that provides a regular mechanism for the parties to transactions relating to financial products to meet obligations to each other. Anyone who operates a clearing and settlement facility in Australia must obtain a licence to do so, or otherwise be exempted by the Minister.
As part of the conditions of granting a licence to operate a clearing and settlement facility, the licensee must supervise the clearing and settlement facility in accordance with Part 7.3 of the Corporations Act 2001.
ASIC is required to conduct an assessment of how well a licensed clearing and settlement facility is complying with its obligations to supervise the facility. ASIC must do this at least once per year in relation to each licensee. ASIC can also assess how well a licensee is complying with its other obligations under the Act.
End of release