ASIC Signs Memorandum of Understanding as OTC Market Reforms Loom

The Australian Securities and Investments Commission (ASIC) has signed a historic Memorandum of Understanding with Singapore's financial regulator, the Monetary Authority of Singapore (MAS). The agreement allows trade repositories licensed in one jurisdiction to provide relevant data to the authority in the other jurisdiction. However, the signed agreement is not legally binding and does not supersede any domestic laws.

Today's announcement (Wednesday) follows yesterday's news that ASIC has granted a derivative trade repository (ADTR) license to DTCC Data Repository (Singapore) Pte Ltd (DDRS). The ADTR license is the first of its kind granted by ASIC, and is a key step in ASIC's implementation of mandatory trade reporting requirements for over-the-counter (OTC) derivatives.

ASIC Commissioner Cathie Armour said, "The licensing of DDRS represents a milestone in Australia's implementation of our Group of Twenty (G20) OTC derivatives commitments and ensures that Australian businesses subject to trade reporting Obligations can report to a foreign trade repository which is licensed and supervised by ASIC."

The Memorandum of Understanding between Australia and Singapore is one of a number already signed by ASIC, as it is trying to enforce and secure compliance despite varying legislation and scope of Regulation between the signing authorities.

In a joint statement, ASIC Chairman, Greg Medcraft and MAS Deputy Managing Director, Ong Chong Tee, said the signing of the MOU between ASIC and the MAS is a "world first for this type of arrangement and embodies the ongoing close co-operation between ASIC and MAS on financial market issues, including the implementation of the Group of Twenty (G20) over-the-counter (OTC) derivatives reforms."

Mr. Medcraft added, "ASIC is committed to ensuring these important reforms are implemented in a way that minimizes cost to Australian business and promotes the role of Australia as a financial center, by making use of international infrastructures where possible."