ASIC has introduced rules implementing Australia’s mandatory central clearing regime for over-the-counter (OTC) derivatives.
In a statement issued by ASIC, the mandatory central clearing regime will help to reduce risk in OTC derivatives markets.
ASIC commissioner Cathie Armour said: “This regime will help to reduce systemic risk in Australia by requiring key interest rate derivatives traded between the largest derivatives dealers to be centrally cleared.
“The rules have been designed taking into account the mandatory clearing requirements in other jurisdictions in which Australian financial institutions operate.
“We will work with overseas regulators to determine whether or not [equivalent] or substituted compliance treatment is available as this will assist Australian financial institutions [to] manage implementation of the regime,” she said.
The regime applies to transactions in OTC interest rate derivatives denominated in Australian dollars, US dollars, euros, British pounds and Japanese yen between OTC derivatives dealers.
“The derivative transaction rules (clearing) set out which entities and derivative contracts are covered by the clearing mandate, the eligible central counterparties that may be used, alternative clearing (allowing entities to comply with certain overseas clearing requirements) and certain exemptions from the clearing mandate,” the statement said.
The final derivatives transaction rules follow ASIC's consultation earlier in the year. The clearing obligations will commence in April 2016.
The RBA has ruled out the use of negative rates – but is that premature? ...
The RBA has made its latest cash rate call as Australia sets out on the path to recovery. ...
Mayfair has labelled the appointment of receivers to one of its funds as a “serious error of judgement” and blasted claims it might be i...