Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.5A - REGULATION OF DERIVATIVE TRANSACTIONS AND DERIVATIVE TRADE REPOSITORIES  

Division 2 - Regulation of derivative transactions: derivative transaction rules  

Subdivision A - Power to make derivative transaction rules  

SECTION 901A   ASIC MAY MAKE DERIVATIVE TRANSACTION RULES  

Power to make derivative transaction rules

901A(1)    
Subject to this Division, ASIC may, by legislative instrument, make rules ( derivative transaction rules ) dealing with matters as permitted by this section.

Note: Subdivision C deals with the process of making derivative transaction rules.

Main matters that may be dealt with in derivative transaction rules

901A(2)    
The derivative transaction rules may (subject to this Division) impose any of the following kinds of requirements:

(a)    execution requirements (see subsection (5) );

(b)    reporting requirements (see subsection (6) );

(c)    clearing requirements (see subsection (7) );

(d)    requirements that are incidental or related to execution requirements, reporting requirements or clearing requirements.

Note: Paragraph (2)(d) : the derivative transaction rules may (for example) impose requirements on the operator of a licensed derivative trade repository to facilitate compliance, by other persons, with reporting requirements.

Other matters that may be dealt with in derivative transaction rules

901A(3)    
The derivative transaction rules may also (subject to this Division) deal with matters incidental or related to requirements referred to in subsection (2) , including any of the following:

(a)    specifying the classes of derivative transactions in relation to which particular requirements apply;

(b)    for execution requirements - specifying the licensed market or prescribed facility (or the class of licensed market or prescribed facility) on which derivative transactions in a particular class must be entered into;

(c)    for reporting requirements:

(i) specifying the licensed derivative trade repository or prescribed derivative trade repository (or the class of licensed derivative trade repository or prescribed derivative trade repository), to which information about derivative transactions, or positions, in a particular class must be reported; and

(ii) specifying the information that is required to be reported;

(d)    for clearing requirements:

(i) specifying the licensed CS facility or prescribed facility (or the class of licensed CS facility or prescribed facility) through which derivative transactions in a particular class must be cleared; and

(ii) specifying a period within which transactions must be cleared;

(e)    specifying the persons who are required to comply with requirements imposed by the rules;

(f)    the manner and form in which persons must comply with requirements imposed by the rules;

(g)    the circumstances in which persons are, or may be, relieved from complying with requirements in the rules that would otherwise apply to them;

(h)    the keeping of records, or the provision of records or other information, relating to compliance with (or determining whether there has been compliance with) the rules;

(i)    any other matters that the provisions of this Act provide may be dealt with in the derivative transaction rules.

Note: Paragraph (e) : subject to section 901D , the persons who are required to comply with requirements imposed by the rules may (for example) be:

(a) persons who are parties to derivative transactions, or who are intermediaries or agents who facilitate or are otherwise involved in derivative transactions; or

(b) operators of financial markets on which derivative transactions are entered into; or

(c) operators of clearing and settlement facilities through which derivative transactions are cleared; or

(d) operators of licensed or prescribed derivative trade repositories.

901A(4)    
(Repealed by No 17 of 2019, s 3, Sch 1 [ 60] (effective 13 March 2019).)

Meaning of execution requirements

901A(5)    

Execution requirements are requirements for derivative transactions not to be entered into otherwise than on:

(a)    a licensed market, the licence for which authorises a class of financial products that includes the derivatives to which the transactions relate to be dealt with on the market; or

(b)    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.

Meaning of reporting requirements

901A(6)    

Reporting requirements are requirements for information about derivative transactions, or about positions relating to derivative transactions, to be reported to:

(a)    a licensed derivative trade repository, the licence for which authorises the repository to provide services in respect of a class of derivatives that includes the derivatives to which the transactions relate; or

(b)    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.

Meaning of clearing requirements

901A(7)    

Clearing requirements are requirements for derivative transactions to be cleared through:

(a)    a licensed CS facility, the licence for which authorises the facility to provide services in respect of a class of financial products that includes the derivatives to which the transactions relate; or

(b)    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.

Rules cannot generally impose requirements retrospectively

901A(8)    
The derivative transaction rules:

(a)    cannot impose an execution requirement on a person in relation to a derivative transaction entered into before the requirement started to apply to the person; and

(b)    cannot impose a reporting requirement on a person in relation to a derivative transaction entered into before the requirement started to apply to the person, or in relation to a position as it was at a time before the requirement started to apply to the person; and

(c)    cannot impose a clearing requirement on a person in relation to a derivative transaction entered into before the requirement started to apply to the person, unless the transaction has not been cleared by the time the requirement starts to apply to the person.