ASIC releases second consultation paper for changes to its derivative transaction rules
17 May 2022 Australia
Image: Anton Balazh
The Australian Securities & Investments Commission (ASIC) has released its second consultation paper for proposed changes to simplify the ASIC Derivative Transaction Rules.
The consultation sets out further proposals to amend the ASIC Derivative Transaction Rules (Reporting) 2013 made under s901A of the Corporations Act 2001, following its first round of consultation, released in November 2020.
This consultation process on the second consultation paper is designed to help ASIC to develop its policy on over-the-counter derivative transaction reporting requirements.
The existing reporting requirements for derivatives transactions in Australia are designed to provide transparency in relation to trading activity, positions and counterparty exposures, helping regulators to identify financial system vulnerabilities, to conduct market surveillance, to monitor market metrics and practices, and to inform policy developments.
International standards have been developed for entity identifiers, transaction identifiers, product identifiers and critical data elements for transaction terms as well as valuation and collateral information for use in derivative transaction reporting.
Several overseas regulators have updated their existing rules to implement these standards.
In its second consultation paper, released yesterday (16 May), the ASIC looks to understand and assess the financial implications of the proposals and any alternative approaches on stakeholders.
The commission has asked stakeholders to outline the likely compliance costs and the likely effect on competition the proposals would have, if they are implemented.
The deadline to submit comments for the second consultation paper is 8 July 2022.
Commenting on the new consultation paper, Priya Kundamal, general manager and head of data repository at DTCC (Singapore): “DTCC commends the ASIC for taking the lead in the Asia Pacific region to advance global data harmonisation efforts that are critical in enabling cross-border data aggregation and in achieving systemic risk mitigation across global jurisdictions.
“Crucially, this includes incorporating critical data elements within the core reporting data framework, adopting common global identifiers, such as the legal entity identifier, the unique product identifier and the unique transaction identifier, and aligning to the ISO 20022 technical format and data standards.
She concludes: “We thank the ASIC team for their collaborative approach with the industry during the consultation process and we look forward to continued progress on this important initiative.”
The consultation sets out further proposals to amend the ASIC Derivative Transaction Rules (Reporting) 2013 made under s901A of the Corporations Act 2001, following its first round of consultation, released in November 2020.
This consultation process on the second consultation paper is designed to help ASIC to develop its policy on over-the-counter derivative transaction reporting requirements.
The existing reporting requirements for derivatives transactions in Australia are designed to provide transparency in relation to trading activity, positions and counterparty exposures, helping regulators to identify financial system vulnerabilities, to conduct market surveillance, to monitor market metrics and practices, and to inform policy developments.
International standards have been developed for entity identifiers, transaction identifiers, product identifiers and critical data elements for transaction terms as well as valuation and collateral information for use in derivative transaction reporting.
Several overseas regulators have updated their existing rules to implement these standards.
In its second consultation paper, released yesterday (16 May), the ASIC looks to understand and assess the financial implications of the proposals and any alternative approaches on stakeholders.
The commission has asked stakeholders to outline the likely compliance costs and the likely effect on competition the proposals would have, if they are implemented.
The deadline to submit comments for the second consultation paper is 8 July 2022.
Commenting on the new consultation paper, Priya Kundamal, general manager and head of data repository at DTCC (Singapore): “DTCC commends the ASIC for taking the lead in the Asia Pacific region to advance global data harmonisation efforts that are critical in enabling cross-border data aggregation and in achieving systemic risk mitigation across global jurisdictions.
“Crucially, this includes incorporating critical data elements within the core reporting data framework, adopting common global identifiers, such as the legal entity identifier, the unique product identifier and the unique transaction identifier, and aligning to the ISO 20022 technical format and data standards.
She concludes: “We thank the ASIC team for their collaborative approach with the industry during the consultation process and we look forward to continued progress on this important initiative.”
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