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Friday 13 February 2015

15-023MR ASIC amends rules on trade reporting obligations for OTC derivatives following industry consultation

ASIC has amended the ASIC Derivative Transaction Rules (Reporting) 2013 (derivative transaction rules (reporting)) following industry consultation and feedback on Consultation Paper 221 OTC Derivatives Reform: Proposed amendments to the ASIC Derivative Transaction Rules (Reporting) 2013 (CP 221).

ASIC Commissioner Cathie Armour said, 'ASIC has carefully considered stakeholder feedback arising from CP 221 and has taken steps to make the reporting regime more effective and easier to comply with, while ensuring that the data being reported will allow regulators to meet the underlying objectives of the over-the-counter (OTC) derivatives reform.'

'Having access to comprehensive OTC derivatives data is key to understanding and supervising the OTC derivatives markets. The changes to the rules take into account the interests of participants in Australia’s OTC derivatives markets while preserving the remit of financial regulators,' Ms Armour said.

The changes to the derivative transaction rules (reporting) include:

  • introducing end-of-day or 'snapshot' reporting instead of intraday or 'lifecycle' reporting as a permanent reporting option
  • introducing a 'safe harbour' from liability for reporting entities using delegated reporting, if certain conditions are met
  • expanding the ability for foreign firms to rely on foreign reporting requirements in order to comply with their obligations under the derivative transaction rules (reporting), known as alternative reporting, while introducing a requirement for foreign entities who use alternative reporting to designate (or ‘tag’) transactions as being reported under the rules to enable that information to be made available for financial regulators and
  • making a number of other technical changes to the derivative transaction rules (reporting) reflecting our proposals in CP 221 and/or feedback received.

ASIC has decided, after consultation with other financial regulators, not to proceed with the proposal to require larger foreign subsidiaries of Australian authorised deposit-taking institutions (ADIs) and Australian financial services licence (AFS) licence holders to report OTC derivative transactions. We concluded that the regulatory benefit would not outweigh the additional compliance cost, however, regulators will keep the issue of the materiality of OTC derivatives holdings in foreign subsidiaries under review.

As part of the amendment to allow the option for reporting entities to use end-of-day (or 'snapshot') reporting on a permanent basis, we have also introduced a determination power for ASIC to require the reporting of intraday trades in a derivative or class of derivative. Although ASIC does not presently intend to exercise the power to require these intraday trades to be reported, for market integrity purposes we will continue to keep under review the need to require certain intraday OTC derivative transactions to be reported, such as for contracts for difference or margin foreign exchange derivatives.

Find out more about the final derivative transaction rules (reporting) package and supporting documents



At the 2009 Group of Twenty Pittsburgh Summit, the Australian Government joined other jurisdictions in committing to substantial reforms to practices in OTC derivatives markets.

In December 2012, legislation was passed giving ASIC new rule-making powers over licensed trade repositories and the reporting of derivative transactions.

In July 2013, ASIC implemented rules in relation to the OTC derivatives trade reporting obligations of financial institutions and the regulation of derivative trade repositories.

ASIC released CP 221 on 25 July 2014, outlining regulatory options for amending the derivative transaction rules (reporting).

The package of amendments seeks to address compliance costs for industry, as well as provide more complete information to ASIC. The regulatory impact of the overall amendment package has been estimated as deregulatory.

Last updated: 13/02/2015 12:00