The Australian Securities and Investments Commission (ASIC) has obscurely announced that it is extending the implementation deadline for derivatives transactions reporting after ascertaining that some companies are still not ready to comply with the regulation.
Several years after the regulator outlined the derivatives transactions reporting rules, a number of entities are still not compliant with the requirements which were outlined by the ASIC. When virtually all G20 member countries have introduced derivatives transaction reporting rules, Australia is now substantially behind its peers in the implementation of its international commitments.
Arm twisting or technological challenges?
There are two major versions explaining why the law hasn’t come into effect yet – major companies in the industry may have difficulties in devising appropriate technological solutions or they are simply delaying as much as possible in order to twist the arm of the regulator.
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Whichever of the two versions is true, the result is that companies are getting another reprieve. ASIC devised its derivatives reporting transactions rules in July 2013 and the initial deadline for implementation was October 2014. Last year, the financial industry received an additional year to comply with the regulation amid its unpreparedness.
After the 12 month postponement, the initiation of ‘phase 3B’ of the regulation, which is the start of reporting, has been set to the 12th of October.
Implications going forward
Commenting on the announcement, Sophie Gerber, the director of Sydney based financial services consultancy Sophie Grace, said: “ASIC’s announcement was not made through their usual media release process, but just a subtle update within their website. It has only been disseminated through direct emails to relevant industry associations such as AFMA who then provided it to their members.”
“Relevantly very few Forex brokers are members of an industry association. Given a lot of the industry have been struggling to meet the requirements on time we certainly would not encourage anyone to put their pens down in regards to trade reporting. Take the opportunity to get everything in order now so that the new reporting date is smooth. After all it is still only 7 weeks away,” Mrs Gerber concluded.