Timetable for implementation
Stakeholders have expressed concern that they will need sufficient time to conduct due diligence on any new CCPs and put in place the necessary operational systems, processes and legal documentation in order to connect to CCPs. Accordingly, it is proposed that there would be a period of time after the determination is made in respect to G4‑IRD before central clearing would become mandatory through ASIC rule making.
Consultation would also be expected to take place with regulatory authorities outside Australia regarding the mandatory central clearing rules proposed to be adopted in accordance with international agreements and to ensure appropriate harmonisation in the process of implementing mandatory central clearing requirements.
This period would provide market participants the opportunity to prepare to centrally clear transactions without disruption to their use of derivatives for hedging or the risk of noncompliance with the law.
Taking these matters into account, the proposed timetable for giving legal effect to the above proposals is as follows:
- Second Quarter 2014 — The Government would expose for comment a draft Ministerial determination relating to G4‑IRD, with relevant accompanying regulations restricting ASIC rule‑making.
- Second Quarter 2014 — it is currently expected that, in parallel, ASIC would consult on rules relating to the details of the central clearing obligations.
- Late 2014 — central clearing rules completed.
- Early 2015 — central clearing obligations would commence.
Do you have comments on the proposed timetable for implementing the central clearing obligation? Could you comment on the incremental costs and benefits of an earlier or later start date than what is proposed?