Australian Trade Reporting Requirements
Australian entities dealing in OTC derivatives are required to report transactions to an Australian Derivatives Trade Repository (“ADTR”) licensed by the Australian Securities and Investments Commission (“ASIC”).
Under ASIC’s Derivative Transaction Rules (Reporting) 2013 (“ASIC’s Rules”), Australian issuers of OTC derivatives need to report their reportable transactions.
ASIC’s Rules provide a framework for the regulation of OTC derivatives reporting, clearing and trade execution.
Essentially the requirements for an Australian Financial Services Licence (“AFSL”) derivatives issuer/broker are to carry out the following on a daily basis:
to a licensed ADTR.
Under ASIC’s Rules, a reporting entity must report the following:
Part S2.1 Schedule 2 of ASIC’s Rules requires data items for each reportable transaction.
The requirements are divided into two categories:
Reporting entities are required to report on the following specific asset classes:
Broadly, the following information is to be reported for all derivative transactions:
Most entities will report transactions through the Snapshot Reporting provisions in ASIC’s Rules. A reportable transaction is an OTC derivative that “takes place on a day (“Relevant Day”)”. This is done by “reporting derivative transaction information in relation to the relevant OTC derivative on its terms as of the Relevant Day.”
A single transaction may be reported that reflects intraday modifications of an OTC derivative. If an OTC derivative transacted earlier in a day is no longer in place at the end of a day then that OTC derivative may not be reportable.
Part S2.2 of Schedule 2 of ASIC’s Rules requires data items for each reportable position.
ASIC’s Rules outline a common set of data fields and specific fields relating to each asset class. Broadly, the following information is to be reported for all reportable positions:
ASIC’s Rules allow a reporting entity to appoint one or more persons (each a delegate) to report on its behalf. A reporting entity that appoints a delegate pursuant to ASIC’s Rules is taken to have complied with their reporting obligations, subject to certain conditions, in relation to each reportable transaction and reportable position for which the delegate has been appointed to report. For further information, see our dedicated page on the safe harbour benefits of delegated trade reporting.
ASIC’s Rules require both parties to a derivative transaction to report to an ADTR. However, there is a relief from this principle where only one party is required to report if the reporting entity has less than A$5 billion total gross notional outstanding positions across all OTC derivatives for two consecutive quarters. View our page Single-Sided Reporting to find out whether this exemption applies to you.
We’ve identified some of the most common mistakes that finanical firms make in their ASIC reporting. Find out what these mistakes are and get it right from the start with our simple tips.
TRAction provides clients with delegated reporting solutions in accordance with the reporting requirements outlined above.
Our clients can also conduct a regular check of the reporting done on their behalf. We provide detailed suggestions of how to carry out regular enquiries of a reporting delegate for ASIC OTC derivative trade reporting purposes.
In the midst of an unprecedented global crisis, CME Group has announced its closure of most of its regulatory reporting services including NEX Regulatory Reporting and the CME Australian Trade Repository by 30 November 2020. We are disappointed to see the market losing a piece of key regulatory infrastructure, and also understand the stress and inconvenience it may bring to its existing clients in terms of switching to other reporting delegate.
If you are currently a client of the CME’s regulatory reporting entities, TRAction is here to help you and ensure a smooth transition of reporting services on or before 30 November 2020. Click here to find out more.
See the following pages for more information about specific aspects of transaction reporting in Australia:
Australian brokers that deal in the Israeli Shekel derivative have reporting obligations to the Bank of Israel. All non-Israeli firms who hold a position above the threshold (USD15m in aggregate gross notional) are required to report all OTC derivatives on Shekel FX and rates.
For further information on your Shekel reporting obligations, visit our Israeli Shekel page.
European Reporting Requirements – MiFID II and MiFIR
The second Markets in Financial Instruments Directive (“MiFID II”) and its accompanying regulation (“MiFIR”) created new reporting requirementsfor financial transactions from 3 January 2018. Australian firms are brought into its ambit where a branch or subsidiary is incorporated in Europe, financial instruments are traded on a European trading venue or where the firm interacts in certain ways with EU entities.
Find out more about how TRAction can assist you here. If you would like to get in touch, we would be happy to talk to you about your trade reporting obligations. Feel free to contact us for an obligation-free consultation with one of our experienced staff on +61 2 8960 7248.
The UK and Europe have three different reporting requirements in the financial markets to be reported to a licensed trade repository. Read More
The Monetary Authority of Singapore requires parties to a Specified Derivatives Contract to report to a licensed trade repository or licensed foreign trade repository. Read More