Central clearing of OTC derivatives
On 11 December 2015, the ASIC Derivative Transaction Rules (Clearing) 2015 were made, introducing a mandatory central clearing regime in Australia for over-the-counter (OTC) interest rate derivatives denominated in Australian dollars (AUD interest rate derivatives), and in US dollars, euros, British pounds and Japanese yen (G4 interest rate derivatives). The clearing mandate applies to Australian and foreign financial institutions that meet the clearing threshold. The clearing obligations will commence in April 2016.
This marks Australia's implementation of the second G20 mandate in relation to OTC derivatives reform.
- Read the ASIC Derivative Transaction Rules (Clearing) 2015
- Read the media release
- View the clearing entity notifications
On 8 September 2015, the Corporations Regulations 2001 were amended to implement central clearing of prescribed classes of OTC interest rate derivatives. The amendment limits the effect of the central clearing mandate to a small number of major domestic and foreign banks that act as dealers in the Australian OTC derivatives market. Smaller financial institutions and all corporate end users are not affected.
On 2 September 2015, a Ministerial determination was made setting out the product scope of the mandatory central clearing regime. The purpose of the Ministerial determination is to allow central clearing requirements to be imposed for AUD and G4 interest rate derivatives.