Set out below is a mark-up showing the changes to the definition
of derivative transaction:
derivative transaction means:
the entry into of an arrangement that is a derivative; or
the modification or termination of such an arrangement; or
the assignment, by a party to such an arrangement, of
some or all of the party's rights and obligations under the
any other transaction relatingthat
relates to a derivative and that is in a class of
transactions prescribed by the regulations for the purpose of this
The former sub-paragraph (d) of the definition caused some
concern among industry participants because it potentially extended
the new laws to transactions that are not in the nature of a
derivative, such as security or other credit support.
Industry participants will welcome the fact that the Government
has addressed this potential for overreach by extending the
definition to only catch "other transactions" to the
extent they are in a derivatives class prescribed by the
The new sub-paragraph (c) has been included to ensure that the
new laws apply to the transfer of rights or obligations under a
Other housekeeping additions to the Bill relate to consequential
legislative amendments, primarily to provide for the sharing of
information between regulators, and to extend confidentiality and
information protection laws to data provided by market participants
The legislation is expected to be in place before the end of the
year. It is not yet known if or when the responsible Minister will
prescribe a class or classes of derivatives under the new laws.
However, if this occurs, the Australian Securities and Investments
Commission will consult publicly in relation to any rules that will
apply to prescribed classes of derivatives.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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