ASIC Lifecycle Method Reporting for CFDs, Margin FX and Equity Derivatives

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ASIC requires that OTC derivative transactions on the following products are reported using the ‘lifecycle’ method:

  • CFDs;
  • Margin FX;
  • Equity derivatives.

Under the previous transaction rules (prior to 1 July 2019), reporting entities had the option of using either Snapshot or Lifecycle reporting for these products.

What is the Difference Between Lifecycle and Snapshot Reporting?

Lifecycle reporting requires you to report the entry into, exit of, as well as any modification of an OTC derivative which occurred during the preceding business day. This is often referred to as ‘intraday reporting’.

Snapshot reporting, on the other hand, only requires you to report the positions which are open at the end of the business day. This is often referred to as ‘end-of-day reporting’.

Current Transaction Reporting Rules

Under the current derivative transaction rules, reporting entities must use Lifecycle reporting for the instrument types outlined above. Rule 2.2.8(3) of ASIC Derivative Transaction Rules (Reporting) 2013 allows ASIC to determine certain derivatives to be “Excluded Derivatives” which requires lifecycle reporting, if ASIC concludes that the determination will have one of the following effects:

  • enhance the transparency of information available to relevant authorities and the public;
  • promote financial stability; or
  • support the detection and prevention of market abuse.

ASIC considers the monitoring of reporting useful for monitoring market misconduct and the prevention of market abuse in these products.

You can access the ASIC instrument here.

If you would like to know more about how TRAction can assist you with lifecycle reporting or ASIC OTC derivative reporting generally, please contact us.

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