In April 2012 the Australian Council of Financial Regulators (which comprises the RBA, APRA and ASIC) issued a Consultation Paper entitled "Implementation of a framework for Australia's G20 over-the-counter derivatives commitments". Public submissions on the Consultation Paper closed on 15 June 2012. Norton Rose Australia is pleased to have made a submission to the government in relation to a number of legal matters raised in the Consultation Paper. A copy of the Norton Rose Australia submission can be accessed here.
The Consultation Paper is the first concrete step taken by the Australian government to implement Australia's G20 commitments relating to the regulation of OTC derivatives. At this stage, the government's proposal envisages the introduction of a legislative framework which will allow ASIC and the Minister for Financial Services and Superannuation to promulgate more specific regulations (following further public consultation) that will mandate that certain prescribed classes of derivatives be subject to one or more mandatory obligations relating to trade reporting, central clearing and trade execution.
Whilst the Consultation Paper seeks submissions on key issues surrounding the implementation of regulations for OTC derivatives, such as which derivatives products and market participants should be subject to mandatory central clearing requirements, the extra-territorial effect of such requirements and whether there should be a requirement that central counterparties be located in Australia, it stops short of issuing draft regulations that seek to address them. It is expected that the next phase of public consultation will involve the issue of more detailed draft legislation to implement the proposed legislative framework, along with further details regarding those classes of derivatives that will be subject to the mandatory obligations.
Norton Rose Australia has extensive experience advising financial institutions, asset managers and corporates regarding the OTC derivatives. Norton Rose Group's London and European offices have also been involved in assisting clients to understand the implications of regulatory developments in the OTC derivatives market in those jurisdictions. Should you wish to discuss any aspects of Australia's proposed regime for regulating OTC derivatives, please contact one of our specialist lawyers. Further information may also be found on the “OTC Oracle” area of the Norton Rose Group website.
See our Derivatives Update from April 2012 here.
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