Australian Securities and Investments Commission
Corporations Act—Paragraph 907D(2)(a)— Class Exemption
Enabling legislation
1. The Australian Securities and Investments Commission (ASIC) makes this instrument under paragraph 907D(2)(a) of the Corporations Act 2001 (Act).
Title
2. This instrument is ASIC Instrument [14/0952].
Commencement
3. This instrument commences on the later of:
(a) the date it is registered under the Legislative Instruments Act 2003; and
(b) 1 October 2014.
Note: An instrument is registered when it is recorded on the Federal Register of Legislative Instruments (FRLI) in electronic form: see Legislative Instruments Act 2003, section 4 (definition of register). The FRLI may be accessed at http://www.frli.gov.au/.
Exemption 1 (Exchange-traded derivatives)
4. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity does not have to comply with Rule 2.2.1 of the Rules to the extent that Rule requires the Reporting Entity to report a Reportable Transaction or Reportable Position in relation to a Derivative (Exchange-Traded Derivative) where:
(a) the Derivative is able to be traded (within the meaning of section 761A of the Act) on a Relevant Financial Market; and
(b) the entry into of the arrangement that is the Derivative takes place on the Relevant Financial Market.
5. For the purposes of the exemption in paragraph 4, and subject to paragraph 6, each of the following financial markets is a Relevant Financial Market:
(a) BSE Limited (Bombay Stock Exchange);
(b) Boston Options Exchange;
(c) Borsa Istanbul;
(d) Bursa Malaysia - Bursa Malaysia Derivatives;
(e) CEGH Gas Exchange of Vienna Stock Exchange;
(f) Chicago Mercantile Exchange;
(g) China Financial Futures Exchange;
(h) Dalian Commodities Exchange;
(i) Dubai Gold & Commodities Exchange;
(j) Dubai Mercantile Exchange;
(k) Electronic Liquidity Exchange operated by ELX Futures LP;
(l) EPEX Spot SE;
(m) European Climate Exchange;
(n) European Energy Exchange;
(o) European Exchange;
(p) Hong Kong Exchange & Clearing Ltd;
(q) HUPX Ltd Hungarian Power Exchange;
(r) ICE Endex;
(s) Jakarta Futures Exchange;
(t) Johannesberg Stock Exchange;
(u) Korea Exchange;
(v) LSE Derivatives Market;
(w) Mexican Derivatives Exchange;
(x) Minneapolis Grain Exchange;
(y) Montreal Exchange;
(z) Moscow Stock Exchange;
(aa) NASDAQ OMX Armenia;
(bb) NASDAQ OMX Iceland;
(cc) National Stock Exchange of India;
(dd) New York Mercantile Exchange;
(ee) New Zealand Exchange;
(ff) Nodal Exchange;
(gg) NYSE Arca Europe;
(hh) OneChicago (Single stock futures);
(ii) Power Exchange Central Europe;
(jj) Powernext;
(kk) Russian Trading System;
(ll) Singapore Commodity Exchange SGX-DT;
(mm) South African Futures Exchange (SAFEX), including SAFEX APD Agricultural Products as part of JSE Limited;
(nn) Taiwan Futures Exchange;
(oo) Tel Aviv Stock Exchange Ltd;
(pp) Thailand Futures Exchange as part of Stock Exchange of Thailand;
(qq) Tokyo Commodity Exchange;
(rr) Tokyo Financial Exchange; and
(ss) Turkish Derivatives Exchange.
6. A financial market is not a Relevant Financial Market for the purposes of paragraphs 4 and 5 if the financial market is a Regulated Foreign Market for the purposes of the Rules.
7. It is a condition of the exemption in paragraph 4 that the Reporting Entity must report in accordance with the Rules:
(a) information about each of its Reportable Transactions in an Exchange-Traded Derivative starting from no later than 1 October 2015; and
(b) the Derivative Position Information set out in Part S2.2 of Schedule 2 of the Rules, about each of its outstanding positions in an Exchange-Traded Derivative as at 1 October 2015 or such earlier date as the Reporting Entity starts to report its Reportable Transactions in the Exchange-Traded Derivative, to a Licensed Repository by or on 1 April 2016.
Exemption 2 (Entity Information and Name Information)
8. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity does not have to comply with Rule 2.2.1 of the Rules to the extent that Rule requires the Reporting Entity to report Entity Information about an entity (in paragraph 9, a Relevant Entity) in relation to a Reportable Transaction or Reportable Position to a Trade Repository.
9. It is a condition of the exemption in paragraph 8 that the Reporting Entity reports an identifier for the Relevant Entity in relation to the Reportable Transaction or Reportable Position to the Trade Repository, using:
(a) a Legal Entity Identifier (LEI), CFTC Interim Compliant Identifier (CICI) or interim entity identifier;
(b) if none of the identifiers listed in subparagraph (a) are available for the Relevant Entity, the entity identifier issued by the Trade Repository to which the Derivative Transaction or Derivative Position has been reported, the entity identifier issued by AVOX Limited (AVOX ID), or the Society for Worldwide Interbank Financial Telecommunication Business Identifier Code (SWIFT BIC); or
(c) if none of the identifiers listed in subparagraph (a) or (b) are available for the Relevant Entity, the internal entity identifier for the Relevant Entity used by the Reporting Entity.
10. From 1 October 2014 to 30 September 2015 (inclusive), and subject to paragraph 11, a Reporting Entity does not have to comply with Rule 2.2.1 of the Rules to the extent that Rule requires the Reporting Entity to report Name Information about an entity (in this paragraph, a Relevant Entity) in relation to a Reportable Transaction or Reportable Position to a Trade Repository, in the case where the Trade Repository to which the Reportable Transaction or Reportable Position is to be reported, is:
(a) unable to accept Name Information; or
(b) unable to populate the Name Information for the Relevant Entity using the Entity Information or other identifier reported by the Reporting Entity in accordance with the condition in paragraph 9.
11. From 1 July 2015, the exemption in paragraph 10 ceases to apply in the case where the Trade Repository is able to accept Name Information.
Exemption 3 (Privacy – Foreign privacy restrictions)
12. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity does not have to comply with Rule 2.2.1 of the Rules to the extent that Rule requires the Reporting Entity to report Identifying Information in relation to a Reportable Transaction or Reportable Position to a Trade Repository, where at the time the Identifying Information is required to be reported:
(a) the Reporting Entity is of the reasonable view that the Reporting Entity would breach a law or regulation of a Relevant Foreign Jurisdiction if the Reporting Entity reported the Identifying Information to the Trade Repository;
(b) the Reporting Entity has a written opinion of external legal counsel that supports the view referred to in subparagraph (a); and
(c) the Reporting Entity is reasonably satisfied that the law or regulation the subject of the written legal opinion referred to in subparagraph (b) has not changed in any relevant respect since the date the opinion was issued.
13. It is a condition of the exemption in paragraph 12 that:
(a) the Reporting Entity reports all Derivative Transaction Information in relation to the Reportable Transaction or all Derivative Position Information in relation to the Reportable Position (as applicable) other than the Identifying Information, in accordance with the Rules;
(b) as soon as reasonably practicable after the Reporting Entity becomes reasonably satisfied that the Reporting Entity would no longer breach the law or regulation of the Relevant Foreign Jurisdiction if the Reporting Entity reported the Identifying Information to the Trade Repository, the Reporting Entity must use all reasonable endeavours to report the Identifying Information to the Trade Repository to which the Reportable Transaction or Reportable Position was reported, unless the OTC Derivative the subject of the Reportable Transaction or Reportable Position has been terminated or has expired; and
(c) the Reporting Entity must, on request by ASIC and as soon as reasonably practicable following such request, give ASIC a copy of the written legal opinion referred to in subparagraph 12(b) in respect of the Relevant Foreign Jurisdiction.
Exemption 4 (Privacy – Counterparty consents)
14. For the period specified in paragraph 15 and subject to paragraphs 16 and 17, a Reporting Entity does not have to comply with Rule 2.2.1 of the Rules to the extent that Rule requires the Reporting Entity to report Identifying Information in relation to a Reportable Transaction or Reportable Position to a Trade Repository, where at the time the Identifying Information is required to be reported:
(a) the Reporting Entity is required to obtain the express consent (Consent) of the counterparty (Relevant Counterparty) to which the Identifying Information relates before it reports the Identifying Information to the Trade Repository;
(b) if the Reporting Entity does not obtain the Consent before it reports the Identifying Information to the Trade Repository, the Reporting Entity may breach:
(i) a duty of confidence owed by the Reporting Entity to the Relevant Counterparty which is actionable at law by the Relevant Counterparty;
(ii) a contractual duty owed by the Reporting Entity to the Relevant Counterparty; or
(iii) a provision of a law or regulation of a foreign jurisdiction that applies to the Reporting Entity in its dealings with the Relevant Counterparty; and
(c) the Reporting Entity has not obtained the Consent of the Relevant Counterparty.
15. Subject to paragraph 16 and 17, the exemption in paragraph 14 applies from 1 October 2014 to the earlier of 30 September 2015 (inclusive) and the date the Reporting Entity obtains the Consent of the Relevant Counterparty.
16. From 1 January 2015, the exemption in paragraph 14 ceases to apply in relation to a Relevant Counterparty if the Reporting Entity enters into an OTC Derivative with the Relevant Counterparty on or after 1 January 2015.
17. The exemption in paragraph 14 does not apply unless the Relevant Counterparty enters into the Reportable Transaction or Reportable Position pursuant to:
(a) an Historic OTC Derivatives Agreement between the Relevant Counterparty and the Reporting Entity; or
(b) an Agency Agreement that was in place as at 31 July 2014, under which the Relevant Counterparty had entered into one or more OTC Derivatives with the Reporting Entity through the Intermediary on or before 31 July 2014.
18. For the purposes of paragraph 17:
Agency Agreement means a legally binding agreement between the Relevant Counterparty and an Intermediary that has an Historic OTC Derivatives (Intermediary) Agreement with the Reporting Entity.
Historic OTC Derivatives Agreement means a legally binding agreement between the Relevant Counterparty and the Reporting Entity that was in place as at 31 May 2014, under which the Relevant Counterparty:
(a) may enter into OTC Derivatives with the Reporting Entity; or
(b) had entered into one or more OTC Derivatives with the Reporting Entity on or before 31 May 2014.
Historic OTC Derivatives (Intermediary) Agreement means a legally binding agreement between a person (the Intermediary) and the Reporting Entity that was in place as at 31 May 2014, under which the Intermediary:
(a) may enter into OTC Derivatives with the Reporting Entity on behalf of other persons, pursuant to legally binding agreements between the Intermediary and those other persons; or
(b) had entered into one or more OTC Derivatives with the Reporting Entity on behalf of other persons, on or before 31 May 2014.
19. It is a condition of the exemption in paragraph 14 that:
(a) the Reporting Entity reports all Derivative Transaction Information in relation to the Reportable Transaction or all Derivative Position Information in relation to the Reportable Position (as applicable) other than the Identifying Information, in accordance with the Rules;
(b) the Reporting Entity must use all reasonable endeavours to obtain the Consent from the Relevant Counterparty, as soon as reasonably practicable; and
(c) as soon as reasonably practicable after the Relevant Counterparty gives the Consent, the Reporting Entity must use all reasonable endeavours to report the Identifying Information to the Trade Repository to which the Reportable Transaction or Reportable Position was reported, unless the OTC Derivative the subject of the Reportable Transaction or Reportable Position has been terminated or has expired.
20. It is an additional condition of the exemption in paragraph 14 that the Reporting Entity must:
(a) have in place a written compliance plan which describes how the Reporting Entity will use all reasonable endeavours to obtain the Consent from Relevant Counterparties as soon as reasonably practicable, as required by subparagraph 19(b);
(b) on request by ASIC, provide ASIC with a copy of the compliance plan referred to in subparagraph (a), within the time specified in the request or if no time is specified, within a reasonable time; and
(c) on request by ASIC, provide ASIC with a document reporting on the Reporting Entity’s implementation of the compliance plan referred to in subparagraph (a), within the time specified in the request or if no time is specified, within a reasonable time, covering the period up to the time of the request.
Exemption 5 (Intra-day modification reporting and reporting of 'action type')
21. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity does not have to comply with paragraphs 2.2.1(1)(a) and (c) of the Rules to the extent those paragraphs require a Reporting Entity to report information about a Reportable Transaction that is a modification of an OTC Derivative (Relevant OTC Derivative) on a day (the Relevant Day), to a Trade Repository by no later than the end of the next Business Day following the Relevant Day.
22. It is a condition of the exemption in paragraph 21 that a Reporting Entity reports, for the Relevant OTC Derivative, information (State Data) about the Relevant OTC Derivative that is the same as the Derivative Transaction Information set out in Part S2.1 of Schedule 2 of the Rules, and reports the State Data to a Trade Repository:
(a) as of the Relevant Day, by no later than the end of the next Business Day following the Relevant Day; and
(b) otherwise in accordance with the Rules as if the State Data was information reported under paragraph 2.2.1(1)(a) or (c) of the Rules (as applicable).
23. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity is not required to comply with the condition in paragraph 22 to the extent that condition requires a Reporting Entity to report:
(a) Derivative Transaction Information referred to in Items 40–44 (collateral) and Item 55 (action type) of Table S2.1(1) of the Rules; and
(b) Derivative Transaction Information referred to in Item 1 of Table S2.1(1) of the Rules that is a ‘universal transaction identifier’ or a ‘single transaction identifier’, subject to a Reporting Entity reporting a Trade Identifier within the meaning of paragraph 28 of this instrument.
24. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity does not have to comply with paragraphs 2.2.1(1)(a) and (c) and Rule 2.2.2 of the Rules to the extent those paragraphs and that Rule require a Reporting Entity to report Derivative Transaction Information in Item 55 (action types) of Table S2.1(1) of the Rules for a Reportable Transaction that is a modification of an OTC Derivative.
Exemption 6 (Accuracy of Reporting)
25. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity does not have to comply with Rule 2.2.6 to the extent that Rule requires a Reporting Entity to:
(a) correct an error or omission in information reported by the Reporting Entity pursuant to the Rules, at any time prior to the end of the next Business Day following the day on which the Reporting Entity became aware of the error or omission; or
(b) correct an error or omission in information reported by the Reporting Entity pursuant to the Rules, where the information was reported prior to the error or omission being identified by the Reporting Entity.
26. It is a condition of the exemptions in paragraph 25 that the Reporting Entity corrects the error or omission in the information as at the date that the Reporting Entity became aware of the error or omission and by no later than the end of the next Business Day after the day on which the Reporting Entity has become aware of the error or omission.
Exemption 7 (Trade identifiers)
27. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity does not have to comply with paragraphs 2.2.1(1)(a) and (c) of the Rules to the extent those paragraphs require the Reporting Entity to report, for a Reportable Transaction, Derivative Transaction Information referred to in Item 1 of Table S2.1(1) of the Rules that is a ‘universal transaction identifier’ or a ‘single transaction identifier’.
28. It is a condition of the exemption in paragraph 27 that the Reporting Entity report, for the Reportable Transaction:
(a) the trade identifier created by the Swap Execution Facility on which the Reportable Transaction was executed (if applicable);
(b) the trade identifier created by the provider of any of the Confirmation Platforms on which the Reportable Transaction was confirmed (if applicable); or
(c) if the information in subparagraphs (a) and (b) is not available, the internal trade identifier used by the Reporting Counterparty,
(each, a Trade Identifier) and reports the Trade Identifier otherwise in accordance with the Rules as if the Trade Identifier was information reported under paragraph 2.2.1(1)(a) or (c) of the Rules (as applicable).
Exemption 8 (Reporting through middleware providers)
29. From 1 October 2014 to 31 March 2015 (inclusive), Macquarie Bank Limited (ACN 008 583 542), National Australia Bank Limited (ACN 004 044 937), Westpac Banking Corporation (ACN 007 457 141) and Deutsche Bank Aktiengesellschaft (ARBN 064 165 162) (each, an ICE Credit Bank) do not have to comply with:
(a) paragraphs 2.2.1(1)(a) and (c) of the Rules to the extent those paragraphs require the ICE Credit Bank to report information about a Reportable Transaction in a Credit Derivative cleared by ICE Clear Credit LLC (Cleared ICE Credit Derivative); and
(b) paragraph 2.2.1(1)(b) of the Rules to the extent that paragraph requires the ICE Credit Bank to report information about a Reportable Position in a Cleared ICE Credit Derivative, by the applicable Position Reporting Date.
30. For the purposes of paragraph 29:
Credit Derivative means an OTC Derivative referred to in the ASIC Taxonomy that is in the Asset class of Credit derivatives.
ASIC Taxonomy means the Derivative asset classes and products to which the Rules apply, as set out in Table 2 of the Appendix (Derivative asset classes and products) to ASIC Regulatory Guide 251 Derivative transaction reporting (RG 251).
31. It is a condition of the exemption in paragraph 29 that the ICE Credit Bank must report in accordance with the Rules:
(a) information about each of its Reportable Transactions in the Cleared ICE Credit Derivative starting from no later than 1 April 2015; and
(b) the Derivative Position Information set out in Part S2.2 of Schedule 2 of the Rules, about each of its outstanding positions in the Cleared ICE Credit Derivative, as at 1 April 2015 or such earlier date as the ICE Credit Bank starts to report its Reportable Transactions in the Cleared ICE Credit Derivative to a Licensed Repository.
Exemption 9 (DDRS Testing Window)
32. From 1 October 2014 to 29 October 2014 (inclusive), a Reporting Entity does not have to comply with Rule 2.2.1 of the Rules to the extent that Rule requires the Reporting Entity to report Derivative Transaction Information in relation to a Reportable Transaction or Derivative Position Information in relation to a Reportable Position, for so long as:
(a) the Reporting Entity uses its best endeavours to comply with Rule 2.2.1 of the Rules in relation to the Reportable Transaction or Reportable Position; and
(b) where the Reporting Entity has been complying with Rule 2.2.1 of the Rules by reporting in accordance with Rule 2.4.2 of the Rules (alternative or one-sided reporting) before 1 October 2014, the Reporting Entity must use best endeavours to continue to comply with Rule 2.2.1 of the Rules by reporting in accordance with Rule 2.4.2 of the Rules as it applied before 1 October 2014.
Exemption 10 (Collateral Reporting)
33. From 1 October 2014 to 30 September 2015 (inclusive), a Reporting Entity does not have to comply with subrules 2.2.1(1) or 2.2.2(1) of the Rules to the extent those subrules require the Reporting Entity to report:
(a) the Derivative Transaction Information in items 40-44 (collateral) of Table S2.1(1) of the Rules, or any changes to that information; or
(b) the Derivative Position Information in items 27-31 (collateral) of Table S2.2(1) of the Rules, or changes to that information.
Exemption 11 (FX Securities Conversion Transactions)
34. For the period from 1 October 2014 to 30 September 2016 (inclusive), a Reporting Entity does not have to comply with Rule 2.2.1 of the Rules to the extent that Rule requires the Reporting Entity to report a Reportable Transaction or Reportable Position in a foreign exchange contract:
(a) that is entered into by the Reporting Entity solely to facilitate the settlement of a transaction for the purchase or sale of a foreign currency denominated security; and
(b) under which consideration is provided to settle the transaction not more than 7 business days after the day on which the transaction is entered into.
Exemptions 1 to 11 – Other conditions (Record-keeping)
35. It is condition of this instrument that a Reporting Entity must:
(a) keep records that enable the Reporting Entity to demonstrate it has complied with the conditions in paragraphs 7, 9, 13, 19, 20, 22, 26, 28, 31, 32(a) and 32(b) of this instrument;
(b) keep the records referred to in subparagraph (a) for a period of at least five years from the date the record is made or amended; and
(c) on request by ASIC, provide ASIC with records or other information relating to compliance with or determining whether there has been compliance with the conditions in paragraphs 7, 9, 13, 19, 20, 22, 26, 28, 31, 32(a) and 32(b) of this instrument, within the time specified in the request or if no time is specified, within a reasonable time.
36. A request by ASIC under subparagraph 35(c) must be in writing and give a Reporting Entity a reasonable time to comply.
Exemptions 1 to 11 – Interaction between exemptions
37. This instrument does not revoke any other instrument pursuant to which ASIC has granted an exemption (Existing Exemption) to a Reporting Entity under paragraph 907D(2)(a) of the Act.
38. Each exemption in this instrument and in the Existing Exemptions operates on its terms and does not limit the operation of any other exemption in this instrument or in the Existing Exemptions.
Interpretation
39. In this instrument:
Confirmation Platform means an electronic trade confirmation platform.
Entity Information means Derivative Trade Data referred to in the following table:
Table in Rules
Items in Table
Table S2.1(1) (Derivative Transaction Information - Common data)
Part (a) of Items 7, 10, 15 and 19
Table S2.1(3) (Equity Derivative and Credit Derivative Data)
1, 3 and 5
Table S2.1(5) (Interest rate derivative data)
6, 8 and 10
Table S2.2(1) (Derivative Position Information – Common data)
Part (a) of Items 6, 8 and 15
Table S2.2(3) (Credit Derivative and Equity Derivative Data)
1, 3 and 5
Table S2.2(5) (Interest rate derivative data)
5, 7 and 9
Identifying Information means Derivative Trade Data referred to in the following table, or substantially equivalent information:
Table in Rules
Items in Table
Table S2.1(1) (Derivative Transaction Information - Common data)
7, 8, 10 and 11
Table S2.1(3) (Derivative Transaction Information - Equity derivative and credit derivative data)
1, 2, 3 and 4
Table S2.1(5) (Derivative Transaction Information - Interest rate derivative data)
6, 7, 8, 9, 10 and 11
Table S2.2(1) (Derivative Position Information – Common data)
6, 7, 8 and 9
Table S2.2(3) (Derivative Position Information – Equity derivative and credit derivative data)
1, 2, 3 and 4
Table S2.2(5) (Derivative Position Information - Interest rate derivative data)
5, 6, 7, 8, 9 and 10
Name Information means Derivative Trade Data referred to in the following table:
Table in Rules
Items in Table
Table S2.1(1) (Derivative Transaction Information - Common data)
8, 11, 16, 20
Table S2.1(3) (Equity Derivative and Credit Derivative Data)
2, 4 and 6
Table S2.1(5) (Interest rate derivative data)
7, 9 and 11
Table S2.2(1) (Derivative Position Information – Common data)
7, 9 and 16
Table S2.2(3) (Credit Derivative and Equity Derivative Data)
2, 4 and 6
Table S2.2(5) (Interest rate derivative data)
6, 8 and 10
Relevant Foreign Jurisdiction means each of the following foreign jurisdictions:
(a) Algeria;
(b) Argentina;
(c) Austria;
(d) Bahrain
(e) Belgium;
(f) France;
(g) Hungary;
(h) India;
(i) Indonesia;
(j) Israel;
(k) Luxembourg;
(l) Pakistan;
(m) People’s Republic of China;
(n) Samoa;
(o) Saudi Arabia;
(p) Singapore;
(q) South Korea;
(r) Switzerland; and
(s) Taiwan.
Rules means the ASIC Derivative Transaction Rules (Reporting) 2013.
Swap Execution Facility means a ‘swap execution facility’ as defined in section 1a(50) of the Commodity Exchange Act 1936 (US).
40. In this instrument, unless otherwise specified, capitalised terms have the meaning given by the Rules.
Dated this 24th day of September 2014
Signed by Oliver Harvey
as a delegate of the Australian Securities and Investments Commission
