Australia's corporate regulator plans to extend four sets of relief covering exchange-traded derivatives and securities that are due to expire later this year. The Australian Securities and Investments Commission (ASIC) said on Monday it intends to remake the instruments for a further five years with only minor amendments, leaving their substantive effect unchanged.
The four instruments are scheduled to lapse under the Legislation Act 2003, which automatically retires legislative instruments after 10 years unless they are remade. Three of the instruments date back to 2016 and the fourth to 2021. ASIC said it has determined that all four are operating effectively and remain a useful part of the regulatory framework.
Scope of the four relief instruments
The instruments address different aspects of market infrastructure and securities regulation. One removes duplicate disclosure obligations for certain exchange-traded derivatives that are treated as issued by both an intermediary and a market participant, so that only the market participant is required to provide a product disclosure statement.
A second instrument recognises securities settled through New Zealand's former FASTER system, now known as the NZCDC Legal Title Transfer system, under Australian law. A third allows shares and debentures of foreign companies quoted on the ASX to be transferred with statutory warranties and indemnities.
The fourth instrument, introduced in 2021, provides securities lenders with relief from the substantial holding disclosure requirements in Chapter 6C of the Corporations Act. ASIC proposes to roll this relief forward on the same basis as the earlier instruments.
Regulatory housekeeping and consultation
The proposed remaking of the instruments comes as ASIC continues to address a backlog of expiring rules and undertakes a broader clean-up of its regulatory materials. The regulator said it scrapped more than 9,000 pages of regulatory content last year in an effort to reduce compliance costs.
ASIC has previously opted to roll forward existing relief rather than undertake full rewrites. In 2022, it extended financial requirements for retail OTC derivatives providers for five years on a similar basis, citing the need for industry certainty while potential changes to primary legislation were considered.
The latest proposal is set out in consultation paper CS 56. ASIC is seeking feedback on the planned remaking of the four instruments until 5pm AEST on July 20. The regulator has stated that the substance of the instruments will not change if they are remade, with only minor amendments anticipated.
