On Feb. 15, AST ASIC issued sets of proposed changes on derivatives.
AST ASIC released Consultation paper 375 - proposed changes to the ASIC derivative transaction rules (reporting): third consultation, which proposes further amendments to ASIC derivative transaction rules (reporting) 2024 regarding outstanding matters.
Outstanding matters from AST ASIC's prior consults released in Nov. 2020, May 2022.
The 3 attachments to the paper are Attachment 1 to CP 375: draft amendments to 2024 reporting rules and 2015 clearing rules, which show the draft amendments.
Attachment 2 to CP 375: draft amended 2024 ASIC rules (‘compare’ version); which is a draft compilation of ASIC derivative transaction rules (reporting) 2024 as in force on Apr. 1, 2025; includes any commenced amendment affecting instrument to that date.
In addition,Attachment 3 to CP 375: draft amended clearing rules (‘compare’ version), which is a draft compilation of the ASIC derivative transaction rules (clearing) 2015 that shows the text of the law as amended as well as in force on Oct. 21, 2024.
Proposal on 2024 Reporting Rules
AST ASIC said proposed changes to 2024 reporting rules are to simplify the exclusion of exchange-traded derivatives as well as the scope of foreign entity reporting.
In addition, the removal of the alternative reporting provisions; clarify exclusion of FX securities conversion transactions; add additional allowable values for 2 data elements.
Proposal on Clearing Rules
AST ASIC said proposed minor changes to the clearing rules are to simplify as well as align the exclusion of exchange-traded derivatives with the 2024 reporting rules.
AST ASIC explained that its proposed changes would commence on Oct. 21, 2024.
With the exception of changes to the scope of foreign entity reporting as well as removal of alternative reporting provisions which would commence on Apr. 1, 2025.
It considers most reporting entities would not face any material additional compliance burden implementing the proposed changes; however, a small number of international reporting entities and some small-scale exempt reporting entities may be impacted.
Table 2 of paper sets out detail on ASIC’s estimates of regulatory compliance burden of implementing draft amended ASIC derivative transaction rules (reporting) 2024.
Consultation End
The comment period for this consultation closes at 5pm on Mar. 28, 2024.
Section 2 provides that Part 1 and Schedules 1, 2, 3, and 5 to instrument 2024/416 commence on Oct. 21, 2024; and that Schedule 4 commences on Oct. 20, 2025.
AST GVT also published an explanatory statement regarding instrument 2024/416.
AST ASIC’s proposals largely supported by industry feedback to CP 375; some mixed feedback, though, in response to proposed removal of alternative reporting provisions.
In addition, AST ASIC explained that it received eight submissions in total from industry associations, a trade repository, reporting entities and service providers.
Explanatory statement also discusses how AST ASIC consulted with others like AST CB.
Aug. 22, 2024 AST ASIC Response
On Aug. 22, 2024, AST ASIC issued Report 792 - response to submissions on CP 375 Proposed changes to the ASIC derivative transaction rules (reporting): third consultation, which highlights key issues that arose regarding the consultation above.
One of main issues raised by respondents related to substitution of a nexus derivative for the entered into in this jurisdiction meaning of an in-scope reportable transaction.
The other main issue raised related to the removal of alternative reporting provisions.
Final amendments to ASIC derivative transaction rules (reporting) 2024 also respond to other data element and rules matters raised in feedback, before representations from industry or before they were detected by AST ASIC as errors/deficiencies.
