In a determination reached on December 20, the CFTC decided that major Australian banks can substitute compliance with CFTC’s rules by complying with the Australian regulatory regimes administered by ASIC and the Australian Prudential Regulation Authority.
The decision follows an application by the Australian Bankers' Association (ABA) on behalf of five Australian banks registered as swap dealers with the CFTC, including ANZ, Commonwealth Bank, Macquarie Bank, National Australia Bank and Westpac.
“The decision recognises the strength of the Australian regime, and reflects the ongoing constructive engagement between the Australian regulators and foreign counterparts, at all levels of our organisations,” said ASIC chairman Greg Medcraft.
“We have been working closely with IOSCO [International Organization of Securities Commissions] and the OTC Derivatives Regulators Group to put in place principles to facilitate substituted compliance,” said Mr Medcraft, who co-founded the American Securitisation Forum, was its chairman from 2005 to 2007 and is current chairman of IOSCO.
“We are pleased with the CFTC’s decision,” he said. “The CFTC has recognised the strength of the Australian regulatory regime, and that the way we administer our regulatory regime achieves comprehensive and comparable regulatory outcomes consistent with the US Dodd-Frank Act.”
The CFTC’s decision means that in a number of areas the Australian banks will only need to comply with Australian regulatory requirements administered by ASIC and APRA, instead of similar US requirements under the Dodd-Frank Act, Mr Medcraft said.
“We look forward to ongoing regulatory cooperation with the CFTC across a range of areas, including on OTC derivatives regulation,” he said.
The CFTC has also granted time-limited no-action relief until 15 May 2014 to the Australian trading platform, Yieldbroker Pty Limited, which holds an Australian Market Licence.
