Overseas Clearing and Settlement Facilities: The Australian Licensing Regime Consultation

The Council of Financial Regulators (CFR) is today releasing a Consultation Paper: Overseas Clearing and Settlement Facilities: The Australian Licensing Regime.

The consultation paper sets out a proposal which aims to clarify when an overseas clearing and settlement (CS) facility falls within the scope of the Australian CS facility licensing regime.

The increasingly global nature of many financial markets, combined with regulatory reforms, has prompted increased participation by Australian financial institutions in overseas CS facilities. The proposal seeks to provide greater clarity regarding the circumstances in which a CS facility must be either licensed in Australia or exempted from the Australian CS facility licensing regime. Greater clarity on this issue will provide increased certainty for overseas CS facilities and their participants, and facilitate Australian entities' access to a diverse range of clearing and settlement options, both in Australia and overseas. It is not expected that the proposed new approach would result in additional CS facilities being within the scope of Australia's CS facility licensing regime, and the rest of the Australian CS facility licensing regime would remain unchanged.

The CFR seeks preliminary views on legislative change as part of its ongoing consideration of the cross-border regulation of CS facilities. Any legislative change will ultimately be a matter for the Government to consider.

The closing date for submissions is 8 May 2015.

For further details, please see the CFR consultation paper: Overseas Clearing and Settlement Facilities: The Australian Licensing Regime