Hopefully, by now, the mere mention of
derivative trade reporting (DTR) no longer sends you into a
cold sweat, and trade reporting is integrated into your business
If, however, you are still dealing with the finer subtleties of
DTR, this three-part blog series on DTR may help you navigate the
The first blog in this series is a recap of key concepts and
dates. The second blog examines the different ways entities can
comply with the rules, and the third blog looks at ASIC's new
enforcement powers to deal with non-compliance.
Remind me again what DTR is all about?
DTR is the mandatory reporting of Over-The-Counter (OTC)
derivative transactions to trade repositories. This was one of the
reforms agreed to by the leaders of the G20 (including Australia)
in response to the global financial crisis.
Why is it so complex?
If you think the DTR rules are complex, you are not alone. It
may have something to do with the way the regime fits together with
Australian and international frameworks.
If you are trying to understand the DTR regime, you will need to
the Corporations Act 2001,
the Corporations Regulations 2001,
Ministerial determination on the type of OTC derivatives for
which DTR rules can be made,
ASIC's DTR rules (which includes the common and specific
asset classes data-sets to be reported), and
any class order relief provided by ASIC (for which there are
OTC derivatives that are credit derivatives, equity derivatives,
foreign exchange derivatives, interest rate derivatives and
commodity derivatives (that are not electricity derivatives) are
subject to DTR.
However, derivatives traded on an Australian licensed market and
certain other international markets are not OTC derivatives.
Who is caught?
The reach of the DTR rules is broad and the rules about who is
caught are not as easy as they seem.
Generally, if you are an Australian financial institution that
trades in OTC derivatives, you will be caught wherever the trade is
made. For example, trading desks of a bank, liquidity providers,
fund managers, CFD issuers, and FX dealers/remitters who issue
forwards and FX options are generally caught. However, recent
amendments do exclude certain AFSL holders from reporting OTC
DTR rules can also apply to foreign financial service entities
trading in Australia or foreign subsidiaries of Australian
financial institutions trading overseas. The test is not
straightforward so it pays to understand the exact reach of the
How often must I report?
Generally, OTC derivative trades must be reported by the end of
the following business day the transaction occurs, i.e. T + 1.
Who do I report to?
Reporting must be to a licensed trade repository. ASIC has
licensed two trade repositories:
DTCC Data Repository (Singapore) Pte Ltd; and
Chicago Mercantile Exchange Inc.
Our next blog will look at alternative ways an entity can comply
with its DTR requirements.
Remind me again what were the key dates?
This, generally, depended on the size of the entity's total
gross notional outstanding positions at a particular date, which
was, essentially, the total value of (including leveraged)
positions taken out with that entity at a point in time.
If this was between AUD $5 billion and $50 billion, the Phase 3A
reporting dates applied to you. If this was less than AUD $5
billion, the Phase 3B reporting dates applied.
ASIC Frequently Asked Question 14. What are the commencement
dates for reporting certain information under the derivative
transaction rules (reporting)?
Have all reporting requirements commenced?
No. Reporting entities need to report certain internationally
recognised entity identifiers for their counterparties.
ASIC has given reporting entities until 30 September 2018 to
comply with this requirement if a prescribed entity identifier is
not available for the relevant entity. Instead, the internal entity
identifier used by the reporting entity must be reported.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This newsletter includes links to recent documents relating to superannuation, funds management & financial services.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).