Corporations Amendment (Derivative Trade Repositories) Regulation 2013

Administered by Department of the Treasury

Legislation au F2013L01279 Regulations Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Select Legislative Instrument 2013 No. 150

Issued by authority of the Treasurer

Corporations Act 2001

Corporations Amendment (Derivative Trade Repositories) Regulation 2013

The Corporations Act 2001 (the Act) provides for the regulation of corporations, financial markets and products and services, including in relation to licensing, conduct, financial product advice and disclosure.

Subsection 901A(6) of the Act provides that reporting requirements are requirements for information about derivative transactions, or about positions relating to derivative transactions, to be reported to inter alia, a facility that is (or that is in a class of facilities that is) prescribed by the regulations for the purpose of this paragraph in relation to a class of derivatives that includes the derivatives to which the transactions relate.

The Corporations Amendment (Derivative Trade Repositories) Regulation 2013 (the proposed Regulation)  makes a number of amendments to the Corporations Regulations 2001 (the Principal Regulations).  These amendments list a number of facilities as being prescribed if the facility is registered to operate as a derivative trade repository under a law of a foreign jurisdiction.

The Regulation ceases to have effect at the end of 30 June 2014.

The Regulation has been discussed with industry stakeholders and the proposed prescribed facilities in targeted consultation over the first half of calendar year 2013.

A regulatory impact statement on the proposed trade reporting reforms has been judged as compliant by the Office of Best Practice Regulation (ref: 13512).

Details of the Regulation are set out in Attachment A.

A statement of the Regulation’s compatibility with human rights is set out in Attachment B.

The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Under the Corporations Agreement 2002, the Commonwealth must consult with the Legislative and Governance Forum for Corporations before making amendments to certain provisions of the Corporations Regulations 2001.  The Council has been consulted.  No adverse views have been expressed.  The Act specifies no other conditions that need to be satisfied before the power to make the Regulation may be exercised.

The Regulation commences on the day after registration.

ATTACHMENT A

 

Details of the Corporations Amendment (Derivatives Trade Repositories) Regulation 2013

Section 1 – Name of Regulation

Section 1 provides that the name of the Regulation is the Corporations Amendment (Derivative Trade Repositories) Regulation 2013.

Section 2 – Commencement

Section 2 provides that the Regulation commences on the day after registration.

Section 3 – Authority

Section 3 provides that the Regulation is made under the Corporations Act 2001 (the Act).

Section 4 – Schedule(s)

Section 4 provides that each instrument specified in the Schedule is amended or repealed as set out in the applicable items in the Schedule.

 

Schedule 1 – Amendments

Item [1]

This provision allows for interim reporting of derivatives contracts to repositories that are licensed in other jurisdictions prior to the establishment of licensed trade repositories in Australia.

This item amends the Corporations Regulations 2001 by adding a new Part 7.5A at the end of Part 7.5 as well as a new Division 2 and a new subdivision 2.1.

Subsection 901A(6) of the Act provides that reporting requirements are requirements for information about derivative transactions, or about positions relating to derivative transactions, to be reported to inter alia, a facility that is (or that is in a class of facilities that is) prescribed by the regulations for the purpose of this paragraph in relation to a class of derivatives that includes the derivatives to which the transactions relate.

This item lists a number of facilities as being prescribed if the facility is registered to operate as a derivative trade repository under a law of a foreign jurisdiction.

The prescribed trade repositories would be:

(a) DTCC Data Repository (U.S.) LLC;

(b) DTCC Derivatives Repository Ltd.;

(c) DTCC Data Repository (Japan) KK;

(d) DTCC Data Repository (Singapore) Pte Ltd;

(e) Chicago Mercantile Exchange Inc.;

(f) INFX SDR, Inc.;

(g) ICE Trade Vault, LLC; and

(h) the Monetary Authority appointed under section 5A of the Exchange Fund Ordinance of Hong Kong.

The Regulation ceases to have effect at the end of 30 June 2014.

 


ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Corporations Amendment (Derivative Trade Repositories) Regulation 2013

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Corporations Amendment (Derivative Trade Repositories) Regulation 2013 (the proposed Regulation) would make a number of amendments to the Corporations Regulations 2001 (the Principal Regulations).  These amendments would list a number of facilities as being prescribed if the facility is registered to operate as a derivative trade repository under a law of a foreign jurisdiction.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The Corporations Amendment (Derivative Trade Repositories) Regulation 2013 was enacted to address the need for the reporting of derivative transactions, which was identified as a gap in the existing regulatory framework under the Corporations Act 2001. This regulation was introduced to facilitate the timely and accurate reporting of derivative transactions by allowing for the interim reporting of such transactions to repositories that are licensed in other jurisdictions, pending the establishment of licensed trade repositories within Australia. The enacting body was the Parliament of Australia, and the regulation aims to enhance transparency and reduce systemic risks within the financial markets by ensuring that comprehensive data on derivative transactions is available for monitoring and analysis. This interim measure was deemed necessary to bridge the gap until the local infrastructure for such reporting was fully operational, thereby supporting the broader policy objective of maintaining financial stability and investor protection.

Scope and Application

The Corporations Amendment (Derivative Trade Repositories) Regulation 2013 applies to entities and persons involved in derivative transactions within Australia. This includes financial institutions, corporations, and other entities required to comply with the Corporations Act 2001. Specifically, the regulation impacts those who must report derivative transactions, ensuring that such reports are directed to prescribed facilities, including those registered in foreign jurisdictions. The regulation lists several foreign derivative trade repositories as prescribed facilities, thereby extending its jurisdictional reach beyond Australia to include these international entities. However, the regulation is temporary, ceasing to have effect at the end of 30 June 2014. The regulation does not impose any exclusions or exemptions, but it does allow for interim reporting to foreign repositories before Australian trade repositories are established. The regulation is a legislative instrument made under the Corporations Act 2001 and, as such, it is subject to consultation and compliance with certain legislative processes.

Key Provisions

The Corporations Amendment (Derivative Trade Repositories) Regulation 2013 amends the Corporations Regulations 2001 to allow for interim reporting of derivatives contracts to repositories that are licensed in other jurisdictions prior to the establishment of licensed trade repositories in Australia. This is done by adding a new Part 7.5A at the end of Part 7.5 as well as a new Division 2 and a new subdivision 2.1 in the regulations. This amendment is in response to the requirements of subsection 901A(6) of the Corporations Act 2001, which mandates that information about derivative transactions be reported to prescribed facilities. The Regulation lists specific foreign derivative trade repositories that are prescribed if they are registered under the law of a foreign jurisdiction. The prescribed repositories include DTCC Data Repository (U.S.) LLC, DTCC Derivatives Repository Ltd., DTCC Data Repository (Japan) KK, DTCC Data Repository (Singapore) Pte Ltd, Chicago Mercantile Exchange Inc., INFX SDR, Inc., ICE Trade Vault, LLC, and the Monetary Authority appointed under section 5A of the Exchange Fund Ordinance of Hong Kong. Entities governed by these regulations must ensure that they comply with the reporting requirements specified by the Act and the amended regulations. Specifically, they must report information about derivative transactions to the prescribed foreign derivative trade repositories if they are registered under the law of a foreign jurisdiction. This requirement is crucial for maintaining transparency and oversight in the derivatives market, ensuring that entities are held accountable for their transactions and positions. Failure to comply with these reporting obligations can lead to serious legal repercussions, as outlined in the next section. The Act imposes stringent obligations on entities to ensure accurate and timely reporting of derivative transactions. Any entity that fails to comply with these obligations may face significant consequences. Under the Corporations Act 2001, breaches of these reporting requirements can result in both civil and criminal penalties. Civil penalties can include fines up to a substantial amount, as determined by the courts. Additionally, criminal penalties may apply, which can include imprisonment, reflecting the seriousness with which the law views non-compliance. The maximum penalties for breaches are set out in the Act, and non-compliance can also lead to disqualification from managing corporations, further emphasizing the importance of adhering to these regulatory requirements.

Legal classification tags

Area of Law
Financial Markets Regulation
Commercial Law
Instrument
Regulation
Concepts
Reporting & Disclosure Obligations
Licensing & Registration
Enforcement Powers
Catchwords
Derivative Trade Repositories

Interactions

Authorises

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.