Part Part 7 - ASIC Derivative Transaction Rules (Reporting) 2022 - 2A Market means a financial market the operator of which is licensed under subsection 795B(1) of the Act, but does not include a financial market operated by an operator specified in regulation 10.15.02 of the Corporations Regulations 2001 or any other financial market that ASIC does not have the function of supervising under section 798F of the Act. | Zoe
Part 72A Market means a financial market the operator of which is licensed under subsection 795B(1) of the Act, but does not include a financial market operated by an operator specified in regulation 10.15.02 of the Corporations Regulations 2001 or any other financial market that ASIC does not have the function of supervising under section 798F of the Act.
Start here
Get a plain-English read of Part 7
Turn the raw legal text into a practical explanation grounded in ASIC Derivative Transaction Rules (Reporting) 2022.
Part 7.2A Market means a financial market the operator of which is licensed under subsection 795B(1) of the Act, but does not include a financial market operated by an operator specified in regulation 10.15.02 of the Corporations Regulations 2001 or any other financial market that ASIC does not have the function of supervising under section 798F of the Act.
Phase 1, Phase 2 or Phase 3:
(a) in relation to a Reportable Transaction, has the meaning given by paragraph S1.1.1(1)(a);
(b) in relation to a Reportable Position, has the meaning given by paragraph S1.2.1(1)(a).
Position Reporting Date has the meaning given by paragraph S1.2.1(1)(c).
Position Reporting Requirement has the meaning given by paragraph S1.2.1(1)(b).
Prescribed Class means a class of Derivatives that the Minister has determined, under section 901B of the Act, as a class of Derivatives in relation to which Reporting Requirements may be imposed (and that determination has not been revoked).
Prescribed Repository means a prescribed derivative trade repository as defined in section 761A of the Act.
Regulated Foreign Market has the meaning given by Rule 1.2.4.
Relevant Jurisdiction means, in relation to a Reportable Transaction or Reportable Position:
(a) this jurisdiction, if the Reportable Transaction or Reportable Position was booked to the profit or loss account of a branch of the Reporting Entity located in this jurisdiction or was entered into by the Reporting Entity in this jurisdiction; or
(b) if paragraph (a) does not apply:
(i) the jurisdiction in which the Reportable Transaction or Reportable Position was booked to the profit or loss account of a branch of the Reporting Entity; or
(ii) if subparagraph (i) does not apply, the jurisdiction in which the Reportable Transaction was entered into by the Reporting Entity.
Reportable Position has the meaning given by paragraph S1.2.1(1)(b).
Reportable Transaction, in relation to a Reporting Entity, has the meaning given by Rule 1.2.5.
Reporting Entity has the meaning given by Rule 1.2.5.
Reporting Period has the meaning given by paragraph S1.1.1(1)(c).
Reporting Requirements has the meaning given by section 761A of the Act and includes the Position Reporting Requirements and the Transaction Reporting Requirements.
RE means the responsible entity of a managed investment scheme.
Rules means these derivative transaction rules.
Transaction Reporting Requirement has the meaning given by paragraph S1.1.1(1)(b).
Trustee means a trustee of a trust.
1.2.4 OTC Derivatives
(1) Subject to subrule (2), in these Rules a Derivative is an OTC Derivative if the Derivative is in a Prescribed Class.
(2) In these Rules a Derivative is not an OTC Derivative if:
(a) the Derivative is able to be traded (within the meaning of section 761A of the Act) on a Part 7.2A Market or a Regulated Foreign Market; and
(b) in the case of a Part 7.2A Market, the entry into of the arrangement that is the Derivative:
(i) takes place on the Part 7.2A Market in accordance with the Operating Rules of the Part 7.2A Market; or
(ii) is reported to the operator of the Part 7.2A Market in its capacity as operator of the Part 7.2A Market, in accordance with the Operating Rules of the Part 7.2A Market; or
(c) in the case of a Regulated Foreign Market, the entry into of the arrangement that is the Derivative takes place on the Regulated Foreign Market.
(2A) For the purposes of subrule (2), Regulated Foreign Market means any financial market:
(a) that is registered by the United States Commodity Futures Trading Commission as a "Designated Contract Market" under section 5h of Commodity Exchange Act 1936 (US);
(b) that is a "Regulated market" as defined in Article 4(1)(21) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (in this Rule, the Directive); or
(c) that is a financial market, or is in a class of financial markets, that has been determined by ASIC as a Regulated Foreign Market under subrule (3).
(3) ASIC may determine from time to time that a financial market, or a financial market in a class of financial markets, in a foreign jurisdiction is a Regulated Foreign Market for the purposes of subrule (2), where, in the opinion of ASIC, the operation of the financial market in the foreign jurisdiction is subject to requirements and supervision that are sufficiently equivalent, in relation to market integrity and market transparency, to the requirements and supervision to which:
(a) a facility referred to in paragraph (2A)(a) is subject in the United States;
(b) a facility referred to in paragraph (2A)(b) is subject in the European Union; or
(c) a Part 7.2A Market is subject in this jurisdiction.
(4) A determination by ASIC for the purposes of subrule (3):
(a) will be published on ASIC’s website; and
(b) takes effect on the day specified in the determination.
(5) A determination by ASIC for the purposes of subrule (3):
(a) may be withdrawn by ASIC, from a date specified in a notice of withdrawal that is not less than 1 calendar month after the date the notice is registered under the Legislative Instruments Act 2003; and
(b) once withdrawn ceases to have effect.
Note 1: A Derivative is an OTC Derivative under this Rule regardless of whether it is cleared through a Licensed CS Facility.
Note 2: Determinations and notices of withdrawal under this Rule will be registered by ASIC on the Federal Register of Legislative Instruments (FRLI) and take effect under the Legislative Instruments Act 2003.
1.2.5 Reporting Entities and Reportable Transactions
(1) Subject to subrule (2) and for the purposes of these Rules:
(a) each entity referred to in column 2 of Table 1 is a Reporting Entity; and
(b) each of the following Derivative Transactions is a Reportable Transaction in relation to the Reporting Entity:
(i) the entry into of an arrangement that is an OTC Derivative of the kind referred to in column 3;
(ii) the modification or termination of an arrangement that is an OTC Derivative entered into as referred to in subparagraph (i); and
(iii) the assignment, by a party to an arrangement that is an OTC Derivative entered into as referred to in subparagraph (i), of some or all of the party’s rights and obligations under the arrangement, where the Reporting Entity has actual knowledge of the assignment.
(2) A Reportable Transaction includes a Derivative Transaction referred to in paragraph (1)(b) by an RE or Trustee in its capacity as RE or Trustee of an Australian Entity, and in those circumstances the Reporting Entity is the RE or Trustee.
Table 1: Reporting Entities and OTC Derivatives
Item 2. Reporting Entity 3. OTC Derivatives
1 An Australian Entity. All OTC Derivatives to which the Reporting Entity is a counterparty, regardless of where the OTC Derivative is entered into.
2 A foreign subsidiary of an Australian Entity where that Australian Entity is an Australian ADI or AFS Licensee. All OTC Derivatives to which the Reporting Entity is a counterparty, regardless of where the OTC Derivative is entered into.
3 A Foreign ADI that has a branch located in this jurisdiction. All OTC Derivatives:(a) booked to the profit or loss account of a branch of the Reporting Entity located in this jurisdiction; or(b) entered into by the Reporting Entity in this jurisdiction.
4 A foreign company that is required to be registered under Division 2 of Part 5B.2 of the Act.
Note: Where a Reporting Entity is covered by item 3 or 4 in addition to item 2, the Reporting Entity must report under item 2.
1.2.6 References to Licensed Repositories or Prescribed Repositories
(1) A reference in these Rules to reporting information about a Reportable Transaction, or a Reportable Position, to a Licensed Repository, is a reference to reporting the information to a Licensed Repository, the Licence for which authorises the Licensed Repository to provide services in respect of a class of Derivatives that includes the Derivatives to which the Reportable Transaction or Reportable Position relates.
(2) A reference in these Rules to reporting information about a Reportable Transaction, or a Reportable Position, to a Prescribed Repository, is a reference to reporting the information to a Prescribed Repository that is prescribed in relation to a class of Derivatives that includes the Derivatives to which the Reportable Transaction or Reportable Position relates.
Note: See subsection 901A(6) and paragraph 905F(4)(b) of the Act.
1.2.7 References to total gross notional outstanding
(1) A reference in these Rules to the total gross notional outstanding positions held by a Reporting Entity is a reference to the Reporting Entity’s total gross notional outstanding positions aggregated across:
(a) all OTC Derivatives; and
(b) all Derivatives that would be OTC Derivatives but for the fact that the Derivatives are not in a Prescribed Class,
but does not include positions in OTC Derivatives:
(c) held by a related body corporate of the Reporting Entity; or
(d) where the entry into, modification, termination or assignment of the OTC Derivative to which the position relates is not a Reportable Transaction in relation to the Reporting Entity within the meaning of Rule 1.2.5 (other than by reason that the Derivatives are not in a Prescribed Class).
(2) For the purposes of the Transaction Reporting Requirements and Position Reporting Requirements that apply in Phase 2 only, a Reporting Entity that is an RE or Trustee may determine whether the Reporting Entity holds total gross notional outstanding positions of $50 billion or more separately in relation to each managed investment scheme or trust for which the Reporting Entity is the RE or Trustee.
Note: See also subrules S1.1.1(2) and S1.2.1(2).
Chapter 2: Reporting Requirements
Part 2.1 Application
2.1.1 Application
This Chapter imposes obligations on Reporting Entities to report their Reportable Transactions and Reportable Positions to Licensed Repositories and Prescribed Repositories.
Note: Schedule 1 provides for phased implementation of the Reporting Requirements and Schedule 2 sets out the Derivative Transaction Information and Derivative Position Information to be reported.
Part 2.2 Reporting Requirements
2.2.1 Transaction Reporting Requirements and Position Reporting Requirements
Core Transaction Reporting Requirements and Position Reporting Requirements
(1) Subject to subrules (2) and (3), Rule 2.2.8 and Part 2.4, a Reporting Entity must report information about:
(a) each of its Reportable Transactions in accordance with the Transaction Reporting Requirements in Part S1.1 of Schedule 1, during the applicable Reporting Periods set out in that Part, other than a Reportable Transaction that is a modification, termination or assignment referred to in paragraph (c);
(b) each of its Reportable Positions in accordance with the Position Reporting Requirements in Part S1.2 of Schedule 1, by the applicable Position Reporting Date for that Reportable Position set out in that Part; and
(c) each Reportable Transaction that is a modification, termination or assignment of a Reportable Position and that occurs before the applicable Position Reporting Date for that Reportable Position, in accordance with Rule 2.4.4,
and must report the information in accordance with the requirements of this Part.
Note: Parts S1.1 and S1.2 of Schedule 1 deal with phased implementation of the Transaction Reporting Requirements and Position Reporting Requirements.
Exception where no Licensed Repository or Prescribed Repository
(2) A Reporting Entity is not required to comply with the requirements of subrule (1) and this Part that would otherwise apply to the Reporting Entity in relation to a Reportable Transaction or a Reportable Position if, at the time the Reporting Entity is required to comply with the requirements:
(a) there is no Licensed Repository authorised to provide services in respect of the class of Derivatives that includes the Derivatives to which the Reportable Transaction or Reportable Position relates; and
(b) there is no Prescribed Repository that is prescribed in relation to the class of Derivatives that includes the Derivatives to which the Reportable Transaction or Reportable Position relates.
Exception for foreign entities
(3) A Reporting Entity other than an Australian Entity or an RE or Trustee acting in its capacity as RE or Trustee of an Australian Entity, is not required to comply with the requirements of subrule (1) and this Part that would otherwise apply to the Reporting Entity in relation to a Reportable Transaction or a Reportable Position if, at the time the Reporting Entity is required to comply with the requirements:
(a) the Reporting Entity is subject to reporting requirements (Alternative Reporting Requirements) in one or more foreign jurisdictions (in this Rule, each, a Foreign Jurisdiction) that are substantially equivalent to the Reporting Requirements under these Rules; and
(b) either:
(i) the Reporting Entity or another entity has:
(A) reported information about the Reportable Transaction or the Reportable Position to a Prescribed Repository, in compliance with the Alternative Reporting Requirements in at least one Foreign Jurisdiction; and
(B) designated the information reported under paragraph (a) as information that has been reported under these Rules; or
(ii) the Reporting Entity is exempt from the requirement in all of the Foreign Jurisdictions to report information about the Reportable Transaction or the Reportable Position, or there is no requirement in any of the Foreign Jurisdictions to report information about the Reportable Transaction or Reportable Position.
(4) Sub-subparagraph (3)(b)(i)(B) does not apply until 13 April 2015.
2.2.2 Reporting Requirement—Changes
(1) Where a Reporting Entity has reported information about a Reportable Transaction or Reportable Position in accordance with subrule 2.2.1(1) and there is a change to the information reported that does not constitute a Reportable Transaction, the Reporting Entity must report the change, and also the applicable information about the change set out in item 55 of Table S2.1(1), in accordance with the requirements of this Part.
(2) Without limiting subrule (1) and subject to subrule (3), a Reporting Entity must report:
(a) each updated mark-to-market, mark-to-model or other valuation of the OTC Derivative to which the Reportable Transaction or Reportable Position relates, whether performed by the Reporting Entity or by another person on behalf of the Reporting Entity; and
(b) each change to the collateral held in relation to the OTC Derivative to which the Reportable Transaction or Reportable Position relates.
(3) If there is more than one update or change of the kind referred to in paragraphs (2)(a) or (b) during a Business Day, the Reporting Entity is only required to report the update or change that occurs closest to the end of that Business Day.
(1) Subject to subrule (2), a Reporting Entity that is required to report:
(a) information about a Reportable Transaction in accordance with paragraph 2.2.1(1)(a) or (c); or
(b) a change to information about a Reportable Transaction or Reportable Position in accordance with subrule 2.2.2(1),
must report the information or change by no later than the end of the next Business Day after the requirement to report the information or change arises.
(2) If the Licensed Repository or Prescribed Repository to which the information or change is to be reported is not available to accept the report of information or changes by the time required under subrule (1), the Reporting Entity must report the information or changes as soon as practicable after the Licensed Repository or Prescribed Repository becomes available to accept the report.
2.2.4 Reporting Requirement—Format
A Reporting Entity that is required to report:
(a) information about a Reportable Transaction or a Reportable Position in accordance with subrule 2.2.1(1); or
(b) a change to information referred to in paragraph (a), in accordance with subrule 2.2.2(1),
must report the information or change in an electronic form and in accordance with any format requirements specified:
(c) in these Rules; and
(d) by the Licensed Repository or Prescribed Repository to which the information or change is reported, to the extent those format requirements are not inconsistent with any format requirements referred to in paragraph (c).
2.2.5 Reporting Requirement—Continuity of reporting
(1) Subject to subrule (2) and Rule 2.4.5, a Reporting Entity that reports to a Derivative Trade Repository (in this Rule, the Original Trade Repository):
(a) information about a Reportable Transaction in an OTC Derivative, or a Reportable Position in an OTC Derivative, in accordance with subrule 2.2.1(1); or
(b) a change to information referred to in paragraph (a), in accordance with subrule 2.2.2(1),
must take all reasonable steps to ensure that it reports further information or changes that relate to the same OTC Derivative, to the Original Trade Repository.
(2) If the Reporting Entity or the person that reports on its behalf is no longer a participant of the Original Trade Repository, or the Reporting Entity is no longer able to comply with subrule 2.2.1(1) or 2.2.2(1) by reporting the information or change to the Original Trade Repository, the information or change must be reported to another Licensed Repository or Prescribed Repository in accordance with the requirements of this Part.
2.2.6 Reporting Requirement—Accuracy of reporting
A Reporting Entity must take all reasonable steps to ensure that information it reports under subrule 2.2.1(1) and any change to that information it reports under subrule 2.2.2(1), whether reported by the Reporting Entity on its own behalf or by another person on behalf of the Reporting Entity, is and remains at all times complete, accurate and current.
2.2.7 Derivative Transaction Information—Delegation of reporting
(1) A Reporting Entity may appoint one or more persons (in this Rule, each a Delegate) to report on behalf of the Reporting Entity in accordance with Rules 2.2.1 to 2.2.5 and 2.2.8.
(2) A Reporting Entity that appoints a Delegate in accordance with subrule (1) is taken to have complied with Rules 2.2.1 to 2.2.5 in relation to each Reportable Transaction and Reportable Position which the Delegate has been appointed to report, if:
(a) the terms of the Delegate’s appointment and any related agreements or arrangements are documented in writing; and
(b) the Reporting Entity makes regular enquiries reasonably designed to determine whether the Delegate is discharging its obligations under the terms of its appointment.
Note 1: For example, the Reporting Entity may appoint a counterparty of the Reporting Entity, central counterparty, trading platform, service provider, broker or any other third party.
Note 2: While other forms of reporting delegation are permitted under the Rules, a Reporting Entity will only be taken under this Rule 2.2.7 to have complied with the reporting obligations in Rules 2.2.1 to 2.2.5 for those Reportable Transactions and Reportable Positions reported by a Delegate in accordance with this Rule 2.2.7.
2.2.8 Lifecycle or snapshot reporting
(1) A Reporting Entity may comply with Rule 2.2.1 in relation to a Reportable Transaction in an OTC Derivative (Relevant OTC Derivative), other than a Derivative that is an Excluded Derivative or that is in a class of Excluded Derivatives at the time the Reportable Transaction is entered into, that takes place on a day (Relevant Day) by:
(a) reporting Derivative Transaction Information for each Reportable Transaction in the Relevant OTC Derivative; or
(b) reporting Derivative Transaction Information in relation to the Relevant OTC Derivative on its terms as of the Relevant Day,
and otherwise reporting the information in accordance with the Rules.
(2) Where a Reporting Entity complies with Rule 2.2.1 in relation to a Reportable Transaction that is a modification of an OTC Derivative in accordance with paragraph (1)(b), the Reporting Entity does not have to comply with Rules 2.2.1 and 2.2.2 in relation to that Reportable Transaction to the extent those Rules require a Reporting Entity to report Derivative Transaction Information in Item 55 of Table S2.1(1).
(3) ASIC may determine from time to time that an OTC Derivative, or a derivative product class, is an Excluded Derivative for the purposes of subrule (1), where, in the opinion of ASIC, making that determination will:
(a) enhance the transparency of information available to relevant authorities and the public;
(b) promote financial stability; or
(c) support the detection and prevention of market abuse.
(4) A determination by ASIC for the purposes of subrule (3):
(a) will be published on ASIC’s website; and
(b) takes effect on the day specified in the determination that is not less than 90 calendar days after the date the determination is published on ASIC's website.
(5) A determination by ASIC for the purposes of subrule (3):
(a) may be withdrawn by ASIC, from a date specified in a notice of withdrawal that is not less than 90 calendar days after the date the notice is published on ASIC's website; and
(b) once withdrawn ceases to have effect.
(6) A determination under subrule (3) is not a legislative instrument.
Part 2.3 Records
2.3.1 Keeping of records
(1) A Reporting Entity must keep records that enable the Reporting Entity to demonstrate it has complied with the requirements of these Rules.
(2) A Reporting Entity must keep the records referred to in subrule (1) for a period of at least five years from the date the record is made or amended.
(3) Without limiting subrule (1) and subject to subrule (4), a Reporting Entity must keep a record of all information that it is required to report under subrules 2.2.1(1) and 2.2.2(2).
(4) A Reporting Entity is not required to keep the records referred to in subrule (3) where the Reporting Entity has arrangements in place to access those records in a Licensed Repository or Prescribed Repository, either directly or through another person, for the period set out in subrule (2).
2.3.2 Provision of records or other information
(1) A Reporting Entity must, on request by ASIC, provide ASIC with records or other information relating to compliance with or determining whether there has been compliance with these Rules.
(2) A request by ASIC under subrule (1) must be in writing and give the Reporting Entity a reasonable time to comply.
(3) The Reporting Entity must comply with a request under subrule (1) within the time specified in the request or if no time is specified, within a reasonable time.