ISDA Responds to ASIC Consultation on Derivatives Transaction Rules

On December 3, ISDA submitted a response to the Australian Securities and Investments Commission (ASIC) consultation on the remake of the ASIC Derivative Transaction Rules (Clearing) 2015, which are due to sunset on April 1, 2026. ASIC proposed to remake the rules in substantially the same form to continue the operation of Australia’s over-the-counter derivatives central clearing regime. Besides limited, minor and administrative amendments, ASIC proposed a policy update in the Draft ASIC Derivative Transaction Rules (Clearing) 2026 to extend exemptive relief to clearing derivatives transactions resulting from post-trade risk reduction (PTRR) exercises (see Rule 2.1.5).

In the response, ISDA recommends amendments to Rule 2.1.5 to align ASIC’s framework with international practices as well as improve clarity and consistency. For instance, ISDA recommends that ASIC should classify multilateral portfolio compression as a PTRR exercise and not treat it separately, in line with the EU and UK. ISDA also asks for clarification on the policy intention of Rule 2.1.5(3)(b), which implied that an exemption only applies where original trades entering the PTRR process are not required to be cleared. In this regard, ISDA suggests ASIC should consider removing Rule 2.1.5(3)(b) to reflect practical feasibility and align with international standards.

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Response on CCP Participation Requirements

On December 24, ISDA responded to a consultation from the European Securities and Markets Authority (ESMA) on central counterparty (CCP) participation requirements. Participation requirements for CCPs are vital for safe and efficient clearing markets, and ISDA broadly supports ESMA’s consultation...