Australian Securities and Investments Commission

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 ASIC Derivative Transaction Rules (Reporting) 2022, (ASIC’s Rules), Australian issuers of OTC derivatives need to report their reportable transactions. ASIC’s Rules and Regulatory Guide 251 provide a framework for the regulation of OTC derivatives reporting. 

What is the reporting obligation and who is required to report?

Reporting entities (often holders of an Australian Financial Services Licence (AFSL), but others are captured including overseas firms) are required to do the following in respect of OTC derivatives:

  • report all trades;
  • report end of day open positions; and
  • submit any modifications to an ADTR.

What to report and to whom?

ASIC’s Rules outline a common set of data fields and specific fields relation to specific asset classes including:

  • credit derivatives;
  • commodity derivatives (other than electricity derivatives);
  • interest rate derivatives;
  • foreign exchange derivatives; and
  • equity derivatives.

Broadly, the following information is to be reported for all reportable positions:

  • the economic terms of the position;
  • the product and entity identifiers;
  • information on whether the position is centrally cleared;
  • valuation (mark-to-market, mark-to-model or other valuation); and
  • collateral information

to a licensed ADTR, on a daily basis. At present, DTCC is the only licensed trade repository (TR) in Australia.

Extra-territorial obligations

MiFIR Reporting in Europe (EU) and the United Kingdom (UK)

Australian firms are brought into the ambit of MiFIR where a branch or subsidiary is incorporated in the EU and/or UK, and financial instruments are traded on an EU/UK trading venue or where the firm interacts in certain ways with EU/UK entities. For more information, visit our MiFIR page.

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Further Information

Reporting entities need to consider their obligations and put procedures in place which promote compliance with the ASIC Derivative Transaction Rules (Reporting) 2022. Find out more about what needs to be reported.

Under ASIC’s Regulatory Guide (RG) 251, firms reporting OTC derivatives are required to make regular enquiries with their reporting delegate to ensure that the delegate continues to meet its obligations to report your trades (ASIC Reporting Rule 2.2.7).

As a reporting entity, you also need to take all reasonable steps to ensure the completeness, accuracy and currency of the information reported. (ASIC Reporting Rule 2.2.6). Read more about what is required.

ASIC currently requires OTC derivative transactions on CFDs, margin FX and equity derivatives to be reported using the ‘lifecycle’ method.

From 21 October 2024, this will be expanded even further to nearly all OTC derivatives. Read more about the requirements.

Australia’s reporting regime requires both parties to a derivative transaction to report to an Australian Derivative Trade Repository (ADTR). However, there is relief from this principle allowing single-sided reporting, i.e. where only one party is required to report. Read more for further details on single-sided reporting.

Until the commencement of the new ASIC trade reporting rules on 21 October 2024, a reporting entity receives a safe harbour benefit when it appoints one or more persons (each a delegate) to report OTC derivatives on its behalf.

After 21 October 2024, firms can continue to delegate their reporting, however the safe harbour provisions will be mostly removed from the ASIC rules. This means that firms will need to implement greater monitoring and reconciliations of their ASIC trade reporting.

For those firms already delegating their reporting, we encourage you to use this transition period to build an understanding of how to conduct regular reconciliations and monitoring. TRAction have compiled resources for both clients and non-clients. Read more for assistance with this process. 

TRAction has identified common mistakes in ASIC trade reporting data. Ensuring the completeness and accuracy of your ASIC trade reporting is important and hence you should take time to review your reporting process against the list below:

  1. Reporting all trading platforms and systems
  2. Full visibility of your reportable trade accounts (only applicable to clients using MT4 API, MT4 & MT5 linked servers)
  3. Addition of Symbols
  4. Missing or wrong identifier of Non-Reporting Counterparty
  5. Wrong notional amount
  6. Incorrect Datetime/Timestamp format
  7. UTI/USI format in csv file
  8. Not informing your reporting delegate of any addition/removal of liquidity providers
  9. Incorrectly rely on single sided relief

For TRAction’s guidance on how to prevent or rectify the above errors read more.

Are you aware of the penalties for non-compliance with ASIC’s trade reporting rules? To find out about what you can be fined for and how to avoid these read more.

It’s a fair concern and it’s a question we’ve been asked by a few brokers, so we’ve taken the time to answer the questions fully and share with the industry as a whole. In the case that the client is an individual, the ASIC Reporting Rules require a unique ID and the client’s legal name. No phone numbers, emails or address are required in the reports. Read more about what data needs to be provided.

Is the trust or trustee required to obtain a Legal Entity Identifier (“LEI”) under ASIC OTC derivative reporting?  As an Australian reporting entity, if your non-individual clients do not have an LEI, you cannot allow them to enter into an OTC derivatives transaction with you. Read more here.

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