OTC derivative transactions on the following products to be reported using the 'lifecycle' methodFrom 1 July 2019, ASIC will require OTC derivative transactions on the following products to be reported using the ‘lifecycle’ method:

– CFDs;
– Margin FX;
– Equity derivatives.

What is the difference between lifecycle reporting 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’.

Where are these changes coming from?

You can access the ASIC instrument here.

Under the current derivative transaction rules, reporting entities have an option to adopt either snapshot or lifecycle reporting. Nevertheless, rule 2.2.8(3) of ASIC Derivative Transaction Rules (Reporting) 2013 allows ASIC to determine certain derivatives to be “Excluded Derivatives” for using snapshot reporting, if such determination has 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 these changes will be useful for monitoring market misconduct and the prevention of market abuse in these products.

If you would like to know more about how TRAction can assist you with the transition to lifecycle reporting, please contact us.

Sophie Gerber

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.