ASIC has announced its intention to ‘modernise’ the derivatives reporting rules. The ASIC Derivative Transaction Rules (Reporting) 2013 were introduced in response to the 2009 G20 Pittsburgh Summit.
Changes to the rules will remove the transitional arrangements which no longer apply while also seeking to harmonise reporting requirements between jurisdictions globally. Changes to delegated reporting provisions are also expected.
The Commodity Futures Trading Commission (CFTC) in the US and the European Securities Markets Authority (ESMA) have also announced tweaks to their trade reporting regimes.
The rule change proposals will draw heavily on international standards for transaction, product and party identifiers data elements including:
- CPMI IOSCO Guidance Harmonisation of the Unique Transaction Identifier (UTI)
- CPMI IOSCO Technical Guidance Harmonisation of Unique Product Identifier (UPI); and
- CPMI IOSCO Harmonisation of critical OTC derivatives data elements (other than UTI and UPI).
ASIC will also review of a number of other rules elements, including:
- consolidating reporting exemptions within the rules
- coverage scope of
- reporting entities
- reportable transactions
- life cycle reporting
- alternative reporting provisions
- delegated reporting provisions.
ASIC has provided an indicative consultation timeline with consultations opening during November 2020 and closing February 2021. A second round of consultation will occur in the months of May and June 2021. Rules are expected to be announced in Q3 or Q4 2021 and will come into force either Q3 or Q4 2022.
The changes hope to reduce compliance costs incurred by multinationals with multiple reporting obligations across different jurisdictions. The harmonisation will also assist regulators in meeting their objective of monitoring counterparty risk within the global economy.
Sophie works in our Sydney office. She is co-CEO and founder of TRAction and focuses on assisting clients in Australia, Europe and Asia to meet their regulatory requirements with trade and transaction reporting solutions as well as development of the best execution platform. She has extensive experience in providing compliance and legal services to Australia’s financial services and credit participants. Her vast experience coupled with in-depth knowledge of business practicalities, regulatory compliance and financial services laws allow her to effectively and efficiently engage with clients.