A key consideration in implementing a mandatory central clearing requirement is the availability of central clearing of that product for different types of Australian market participants, whether as direct participants or as clients.
Prior to any entity being subject to a central clearing mandate it will be necessary to establish that CCPs have appropriate arrangements in place to offer services.
In February 2013, ASIC and the Reserve Bank released a joint statement explaining how the two regulators are implementing the Principles for Financial Market Infrastructures (PFMIs) in Australia (the Statement).1
Under the Act, ASIC can only make central clearing rules requiring central clearing through either a licenced or prescribed CCP.
The Government will consider prescribing CCPs to ensure Australian market participants have appropriate access to CCPs. One circumstance in which the Government would consider prescribing a CCP would be in order to preserve domestic participants’ access to clearing through an overseas CCP that is making available services to Australian entities but has been judged to be not operating in Australia and therefore is not required to have an Australian CS facility licence.2
Do you have comments on the proposal that some CCPs may be prescribed in order to ensure Australian market participants have appropriate access to CCPs? Or is there another option you prefer? If so, why?
- Implementing the CPSS–IOSCO Principles for financial market infrastructures in Australia, February 2013, available at http://www.asic.gov.au/asic/asic.nsf/byheadline/Implementing-the-CPSS%E2%80%93IOSCO-Principles-for-financial-market-infrastructures-in-Australia?openDocument ↩
- Note that prescribed CCPs would still need to be licensed if they are judged to be operating in Australia. ASIC has set out the factors it considers when assessing whether a CCP is operating in Australia in its Regulatory Guide 211. Available at http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg211-published-18-december-2012.pdf/$file/rg211-published-18-december-2012.pdf. ↩