The Australian Securities and Investments Commission on Dec. 14 published final rules mandating clearing for over-the-counter interest rate swaps. The clearing obligation begins in April for dealers with more than AU$100 billion (USD$70.6 billion) in total gross notional outstanding in over-the-counter derivatives. The mandate applies to dealer-to-dealer interest rate swaps denominated in five currencies: the Australian dollar, the U.S. dollar, the euro, the pound sterling and Japanese yen.
In line with overseas mandatory clearing requirements, the regime also provides the basis for substituted compliance or sufficient equivalence determinations by foreign regulators. "We will work with overseas regulators to determine whether or not equivalence or substituted compliance treatment is available as this will assist Australian financial institutions manage implementation of the regime," said Cathie Armour, ASIC Commissioner.