The government has made a call for submissions on its draft legislation for the mandatory central clearing of over-the-counter (OTC) interest rate derivatives.

The reforms are looking to bring Australia in line with other developed financial markets.

Draft amendments to the Corporations Regulations for both measures are contained in Corporations (Derivatives) Amendment Determination 2015 (No. 1) and the Corporations Amendment (Central Clearing and Single-Sided Reporting) Regulation 2015.

The Monetary Authority of Singapore extends its reportable OTC Swap Derivatives to include Foreign Exchange from 1st of May 2015.

Date of entry into force of RTS on clearing for Interest Rate Derivatives. If ESMA approves amendments made to the RTS by the EC (submitted December 19, 2014), the following would happen: (i) OTC derivatives entered into between Category 1 firms (subject to a six-month phase-in period) up until two months after the entry into force of the RTS will not be frontloaded; (ii) contracts entered into with Category 2 firms (subject to a 12-month phase-in period) up until five months after the entry into force of the RTS will not be frontloaded. Only trades entered into after two-months (for Cat 1 firms) and five months (for Cat 2 firms) during the remainder of the applicable phase-in period will be subject to frontloading (if those trades have a minimum remaining maturity of six months at the end of the phase-in). The clearing obligation RTS for CDS is also expected to be delivered to the EC in Q1.

Phase 1 Banks also have to start reporting the additional ASIC defined fields into the Global trade Repository.

October 31, 2014 is the new start date for mandatory trade reporting in Canada by derivatives dealers for new transactions where either or both parties are “local counterparties” in an Applicable Province.

Derivatives Trade Reporting – Phase 3 Delay Request has been accepted.

Phase 3 of the OTC derivative transaction reporting obligations will not come into effect until April 2015.

Derivatives Trade Reporting – Phase 3 Delay Request

It is believed the AFMA/ISDA Trade Reporting Group has written a letter to propose for a staggered and delayed start to Phase 3 of the OTC derivative transaction reporting obligations.

Possible content could be to stagger the start of Phase 3 Reporting Entities based on a threshold test and open up an optional earlier start for those ready. also for reporting to start on a best endeavours basis without conditions.

 

The opportunity for more SMSF to invest in bonds will come about when iBonds.com.au is launched. The Larratt Asset Group under the Self Managed Bonds business name is driving the disruptive technology to make this come about. This service will need a wave of education to show the benefits of diversifying into bonds.