Corporations Amendment (Central Clearing and Single-Sided Reporting) Regulation 2015 (157 of 2015)

Schedule 1   Amendments

Part 2   Amendments commencing 1 October 2015

Corporations Regulations 2001

6   After Subdivision 2.1A of Division 2 of Part 7.5A

Insert:

Subdivision 2.1B - Phase 3 reporting entities - exemption from OTC derivative reporting requirements

7.5A.70 Definitions for Subdivision 2.1B

In this Subdivision:

ASIC exemption instrument meansASIC Instrument [14/0633].

Derivative Transaction Rules (Reporting) means the ASIC Derivative Transaction Rules (Reporting) 2013.

OTC derivative (short for over-the-counter derivative) means an OTC Derivative within the meaning of the Derivative Transaction Rules (Reporting).

OTC derivative position means a position relating to an OTC derivative transaction.

OTC derivative position information means Derivative Position Information within the meaning of the Derivative Transaction Rules (Reporting), as in force on 1 October 2015, about OTC derivative positions.

OTC derivative transaction means a derivative transaction (within the meaning of Chapter 7 of the Act) relating to an OTC derivative.

phase 3 reporting entity means a Phase 3 Reporting Entity within the meaning of the ASIC exemption instrument as in force on 1 October 2015.

reporting counterparty : see regulation 7.5A.72.

reporting entity means a Reporting Entity within the meaning of the Derivative Transaction Rules (Reporting), as in force on 1 October 2015.

representative capacity : an entity is a party to an OTC derivative transaction, or holds an OTC derivative position, in a representative capacity if the entity is such a party, or holds such a position, in a capacity as the responsible entity for a registered scheme, or as the trustee of a trust.

total gross notional outstanding positions , in relation to a phase 3 reporting entity, has a meaning affected by the ASIC exemption instrument, as in force on 1 October 2015.

7.5A.71 Exemption - single-sided transaction and position reporting

(1) This regulation is made for paragraph 907E(2)(a) of the Act.

Exemptions

(2) A phase 3 reporting entity is exempt from a provision of the Derivative Transaction Rules (Reporting) requiring the entity, at a particular time, to report information about an OTC derivative transaction to which the entity is a party if, at that time:

(a) regulation 7.5A.73 applies to the entity in relation to the transaction; and

(b) the other party to the transaction is a reporting counterparty in relation to the phase 3 reporting entity and the information.

(3) A phase 3 reporting entity is exempt from a provision of the Derivative Transaction Rules (Reporting) requiring the entity, at a particular time, to report OTC derivative position information in relation to an OTC derivative position to which the entity is a party if, at that time:

(a) regulation 7.5A.73 applies to the entity in relation to the position; and

(b) the other party to the position is a reporting counterparty in relation to the phase 3 reporting entity and the information.

Effect of exemption on ASIC exemption instrument

(4) Subregulation (5) applies if a phase 3 reporting entity is exempt under this regulation from a provision of the Derivative Transaction Rules (Reporting) requiring the entity to report information about a particular OTC derivative transaction or OTC derivative position.

(5) The entity is also exempt from subsection 907D(3) of the Act in relation to a provision of the ASIC exemption instrument that imposes a requirement to report information about the transaction or position as a condition of an exemption under that instrument.

7.5A.72 Reporting counterparties

(1) This regulation sets out, for the purposes of regulation 7.5A.71, the circumstances in which an entity (the other entity ) is a reporting counterparty in relation to:

(a) a phase 3 reporting entity that proposes to rely on an exemption in that regulation (the exempt entity ); and

(b) information that is:

(i) information about an OTC derivative transaction; or

(ii) OTC derivative position information.

Reporting entities

(2) The other entity is a reporting counterparty in relation to the exempt entity and the information if:

(a) the other entity has made a representation to the exempt entity:

(i) that the other entity is a reporting entity, other than a phase 3 reporting entity, that is required to report such information under the Derivative Transaction Rules (Reporting); or

(ii) that the other entity is a phase 3 reporting entity that is required to report such information under the Derivative Transaction Rules (Reporting), and that regulation 7.5A.73 does not apply to the other entity in relation to such OTC derivative transactions or OTC derivative positions; and

(b) the exempt entity makes regular enquiries reasonably designed to determine whether the representation is correct; and

(c) the exempt entity has no reason to suspect that the representation is incorrect.

(3) The other entity is a reporting counterparty in relation to the exempt entity and the information if:

(a) the other entity has made the following representations to the exempt entity:

(i) that the other entity is a reporting entity;

(ii) that the other entity will report such information in accordance with the Derivative Transaction Rules (Reporting); and

(b) the exempt entity makes regular enquiries reasonably designed to determine whether the other entity has been making reports in accordance with the representation referred to in subparagraph (a)(ii); and

(c) the exempt entity has no reason to suspect that the other entity has not been making such reports.

Foreign entities

(4) The other entity is a reporting counterparty in relation to the exempt entity and the information if:

(a) the other entity is a foreign entity; and

(b) the other entity has made the following representations to the exempt entity:

(i) that the other entity is subject to reporting requirements ( alternative reporting requirements ) in one or more foreign jurisdictions that are substantially equivalent to requirements under the Derivative Transaction Rules (Reporting);

(ii) that the other entity will report such information to a facility prescribed by or under subregulation 7.5A.30(2), in accordance with the alternative reporting requirements;

(iii) that the other entity will designate such information reported to that facility as information that has been reported in accordance with the Derivative Transaction Rules (Reporting); and

(c) the exempt entity makes regular enquiries reasonably designed to determine whether the other entity has been making reports in accordance with the representations referred to in subparagraphs (b)(ii) and (iii); and

(d) the exempt entity has no reason to suspect that the other entity has not been making such reports.

(5) The other entity is a reporting counterparty in relation to the exempt entity and the information if:

(a) the other entity is a foreign entity; and

(b) the other entity has made the following representations to the exempt entity:

(i) that the other entity will report such information to a licensed derivative trade repository in accordance with the Derivative Transaction Rules (Reporting);

(ii) that the other entity will designate such information reported to that repository as information that has been reported in accordance with the Derivative Transaction Rules (Reporting); and

(c) the exempt entity makes regular enquiries reasonably designed to determine whether the other entity has been making reports in accordance with the representations referred to in paragraph (b); and

(d) the exempt entity has no reason to suspect that the other entity has not been making such reports.

Subregulations do not limit each other

(6) Subregulations (2), (3), (4) and (5) do not limit each other.

7.5A.73 Application of exemptions

New phase 3 reporting entities

(1) For the purposes of regulations 7.5A.71 and 7.5A.72, this regulation applies to a new phase 3 reporting entity, in relation to an OTC derivative transaction or an OTC derivative position, at all times during a period:

(a) starting on the day the entity becomes a phase 3 reporting entity; and

(b) ending at the end of the quarter day that next follows 2 successive disqualifying quarter days for the entity.

Example: An entity becomes a phase 3 reporting entity on 1 November 2015. However, 31 December 2015 and 31 March 2016 are both disqualifying quarter days for the entity.

This regulation applies to the entity during a period starting on 1 November 2015 and ending at the end of 30 June 2016 (the quarter day that next follows the disqualifying quarter days on 31 December 2015 and 31 March 2016).

Continuing phase 3 reporting entities

(2) For the purposes of regulations 7.5A.71 and 7.5A.72, this regulation applies to a continuing phase 3 reporting entity, in relation to an OTC derivative transaction or an OTC derivative position, at all times during a period:

(a) starting on the day after the quarter day that next follows 2 successive qualifying quarter days for the entity; and

(b) ending at the end of the quarter day that next follows 2 successive disqualifying quarter days for the entity.

Example: An entity becomes a phase 3 reporting entity on 1 November 2015. However, 31 December 2015 and 31 March 2016 are both disqualifying quarter days for the entity, so this regulation stops applying under subregulation (1) at the end of 30 June 2016.

30 June 2016 and 30 September 2016 are qualifying quarter days for the entity. This regulation applies to the entity again during the period starting on 1 January 2017 (the day after the quarter day that next follows the qualifying quarter days) and ending as provided for by paragraph (2)(b).

(3) In this regulation:

continuing phase 3 reporting entity means:

(a) an entity that was a phase 3 reporting entity on 30 September 2015; or

(b) a new phase 3 reporting entity for which the period mentioned in subregulation (1) has ended.

Note: For when this regulation first applies to an entity that was a phase 3 entity on 30 September 2015, see regulation 10.21.01.

disqualifying quarter day , for an entity, means a quarter day at the end of which the total gross notional outstanding positions held by the entity in the relevant capacity is 5 billion Australian dollars or more.

new phase 3 reporting entity means an entity that becomes a phase 3 reporting entity on or after 1 October 2015.

qualifying quarter day , for an entity, means a quarter day at the end of which the total gross notional outstanding positions held by the entity in the relevant capacity is less than 5 billion Australian dollars.

quarter day has the same meaning as in the Act.

Note: Under the Act, quarter days are 31 March, 30 June, 30 September and 31 December.

relevant capacity : a position is held by the entity in the relevant capacity , for the purpose of the definition of qualifying quarter day or disqualifying quarter day in this subregulation, if:

(a) the position is held by the entity otherwise than in a representative capacity, in the following circumstances:

(i) in a case in which the relevant definition is applied in relation to an OTC derivative transaction to which the entity is a party otherwise than in a representative capacity;

(ii) in a case in which the relevant definition is applied in relation to an OTC derivative held by the entity otherwise than in a representative capacity; or

(b) the position is held by the entity in a representative capacity in relation to a particular registered scheme or trust, in the following circumstances:

(i) in a case in which the relevant definition is applied in relation to an OTC derivative transaction to which the entity is a party in that capacity;

(ii) in a case in which the relevant definition is applied in relation to an OTC derivative held by the entity in that capacity.

7.5A.74 Reporting requirement - exemption stops applying

Scope

(1) This regulation applies to a phase 3 reporting entity, in relation to an OTC derivative transaction or an OTC derivative position, if:

(a) regulation 7.5A.73 applies in relation to the entity, in relation to the transaction or position, during a particular period, and the period has ended (at the exemption end time ) ; and

(b) the entity is a counterparty to the relevant OTC derivative (including the derivative as modified) at the exemption end time; and

(c) in reliance on an exemption under regulation 7.5A.71 (the applicable exemption ), the entity does not report OTC derivative position information (the exempt information ) in relation to the transaction or position during that period; and

(d) if it were not for the applicable exemption, the entity would have been required to report the exempt information under:

(i) the Derivative Transaction Rules (Reporting); or

(ii) subsection 907D(3) of the Act, in relation to a provision of the ASIC exemption instrument that imposes a requirement, as a condition of an exemption under that instrument, to report that information.

Single-sided reporting requirement

(2) Despite the applicable exemption, the entity must report OTC derivative position information in relation to the OTC derivative, as at the exemption end time, in accordance with the Derivative Transaction Rules (Reporting), within 6 months after the exemption end time.

(3) If the entity fails to comply with subregulation (2), the applicable exemption is taken never to have applied to the entity in relation to the transaction or position.