Australia

Financial institutions that deal in OTC derivatives in Australia get their reporting, clearing, and margin tasks from the rules of different regulators. Not everyone is subject to all three obligations.

What the regulation requires

Australia's OTC derivative regulation is made up of three sets of rules. The first requires derivative transaction data to be reported to a licensed trade repository. The second requires large financial institutions to centrally clear certain interest rate derivatives. The third is a prudential standard that requires variation margin and initial margin to be exchanged on trades that are not cleared.

The first two are made and enforced by ASIC¹. The third is imposed by APRA on banks, insurers, trustees of superannuation funds, and other institutions². What sets Australia apart is that, for the same OTC derivative, ASIC is responsible for reporting and clearing and APRA for margin.

The implementation status in five jurisdictions, and an outline of the Corporations Act sections, are covered in Overview of Derivatives Regulation in Asia-Pacific.

Legal basis and supervisors

The basis for reporting and clearing is Part 7.5A of the Corporations Act 2001, "Regulation of derivative transactions and derivative trade repositories". ASIC has the power to make derivative transaction rules and the responsibility to enforce them. The Minister determines the classes of derivatives that can be made subject to reporting, clearing, and trading-platform obligations. Regulations under the Corporations Act can limit the application of the rules, and ASIC can exempt persons, facilities, and transactions from provisions³.

The names of the rules and determinations are the original English names.

There are two regulators. ASIC has the reporting obligation, the clearing obligation and the licensing of trade repositories. APRA sets CPS 226 under the Banking Act, the Insurance Act, the Life Insurance Act, and the Superannuation Industry (Supervision) Act⁷.

An entity that accepts reported data needs a licence under the Corporations Act. As of October 2026, the licensed entities that ASIC lists are DTCC Data Repository (Singapore) Pte Ltd and KOR Reporting Inc. The rules on licensing and operation are in ASIC's trade repository rules⁶.

The text of CPS 226 was checked as published on October 6, 2026 (effective January 1, 2023).

Transactions and persons covered

Persons and transactions subject to reporting

The reporting obligation falls on the reporting entities defined in the rules. The reporting entities and their transactions are as follows⁸.

A nexus derivative is an OTC derivative to which a reporting entity is a party and in which personnel of a foreign person located in Australia are involved in any of pricing, quoting, arranging, offering and accepting, or managing the risk. The guide says the test captures functions performed by sales staff and traders, and does not include the functions of management, counterparty risk, operations, finance and treasury departments⁹.

The classes of derivatives subject to reporting are set by the Minister's determination. As of April 2026, there are five asset classes: commodities other than electricity, credit, equity, foreign exchange, and interest rates¹⁰. Transactions within the same legal entity are not reported. Transactions with affiliates in the same corporate group are reportable if the affiliate is not consolidated at the level of the domestic book¹¹.

There is relief for buy-side entities with a small total. A responsible entity, a trustee, an APRA-regulated insurer or a similar person that is not a market maker is treated as a small-scale buy-side entity if it keeps the total notional amount of its derivatives that are not centrally cleared at AUD 12 billion or less. The amount is measured at the end of each quarter, and if the two preceding quarter-ends were both at or below AUD 12 billion, the entity is small from the next day¹².

The relief has three parts.

• For derivatives other than equity derivatives, a snapshot report can replace a lifecycle report.
• The valuation and collateral reporting fields can be narrowed.
• Option deltas do not have to be reported.

Persons and transactions subject to clearing

The threshold, the table of covered products, the exceptions and the rule numbers in this subsection come from ASIC's consultation draft (October 2025) and may change in the rules as made.

In the draft, the persons with a clearing obligation are financial institutions that meet the clearing threshold and persons that elect to be subject to the obligation. The financial institutions are Australian ADIs, holders of an AFS licence, and holders of an exempt foreign licence. The threshold is met when gross notional of AUD 100 billion or more is confirmed at quarter-end on two consecutive occasions. For example, if the amount is AUD 100 billion or more on both September 30, 2026 and December 31, 2026, the obligation starts on April 5, 2027. How the obligation ends when an institution falls below the threshold is also set out¹³.

The 2026 clearing rules replace the 2015 rules. In ASIC's description, the changes are minor and existing obligations do not change¹⁴.

The products subject to clearing are interest rate derivatives that meet certain conditions. In ASIC's description, interest rate derivatives in Australian dollars, US dollars, euros, pounds sterling, and Japanese yen are covered⁵. The table below shows the conditions in the draft¹⁵.

Transactions with optionality, transactions with a notional amount in more than one currency, and transactions whose notional amount changes on a condition are outside clearing¹⁵.

Persons and transactions subject to margin

CPS 226 applies to institutions supervised by APRA (APRA covered entities). These include ADIs (including foreign ADIs), general insurers, life companies, and licensed superannuation (RSE) entities. It applies to transactions in the entity's own books, and for foreign ADIs and similar entities only to transactions in the books of the Australian branch².

The counterparty must be a financial institution (a covered counterparty). Sovereigns, central banks, multilateral development banks, public sector entities, and the Bank for International Settlements are excluded. Covered-bond and securitization special purpose vehicles that use derivatives only for hedging are also excluded¹⁶.

In addition, the month-end average notional amount of non-centrally cleared derivatives of the "margining group" to which the entity belongs and of the margining group to which the counterparty belongs must each exceed a level. The level for variation margin is AUD 3 billion. The level for initial margin is AUD 12 billion each year for periods starting September 1, 2022 and later¹⁷. The initial margin level has been lowered in steps.

This is as stated in Table 2 of CPS 226¹⁷. Physically settled foreign exchange forwards and swaps count toward the level calculation, but can be left out of the calculation of the margin to be exchanged¹⁸. Only new transactions are covered. A genuine amendment of a contract, or the novation of a grandfathered transaction, is not a new transaction¹⁹.

The figure below puts four of the conditions above, the ones that act as the entry point to the margin obligation, into a sequence of questions.

Figure description

The figure checks the entry conditions of the CPS 226 margin obligation through four questions in order. A no to question 1, 3, or 4, or a yes to question 2, puts the transaction outside the conditions shown here. If none of the questions rules it out, CPS 226 may apply. There are also conditions the figure does not show, such as the treatment of physically settled foreign exchange forwards and swaps¹⁸ and substituted compliance, and the conclusion also depends on these.

The four questions in the figure are explained in order below.

The first question asks whether the transaction is in the books of an institution supervised by APRA².

The second asks whether the counterparty is an excluded person or is not a financial institution. An excluded person is a sovereign, a central bank, a multilateral development bank, a public sector entity, the Bank for International Settlements, or a covered-bond or securitization special purpose vehicle that uses derivatives only for hedging²¹⁶.

The third asks whether the month-end average notional amount of non-centrally cleared derivatives of the entity's margining group and of the counterparty's margining group each exceeds its level. The level is AUD 3 billion for variation margin and AUD 12 billion for initial margin. The figure combines them into one question, but in practice they are tested separately¹⁷.

The fourth asks whether the transaction is a new one. A genuine amendment of a contract, or the novation of a grandfathered transaction, is not a new transaction¹⁹.

Consider a hypothetical example in which two transactions are tested against the figure's questions.

In example 1, no question rules the transaction out. Both groups exceed the variation margin level (AUD 3 billion), so these are conditions under which the variation margin requirement may apply. Neither exceeds the initial margin level (AUD 12 billion), so initial margin is not covered on these conditions.

In example 2, a central bank is excluded as a counterparty, so the transaction comes outside the margin requirement on the conditions shown here.

What is required

Reporting

The ASIC Derivative Transaction Rules (Reporting) 2024 require reporting entities to report transaction and position data to a trade repository⁴. The conditions and conclusions are as follows.

• If a reporting entity's transaction is reportable, a lifecycle report (data on each reportable transaction that arose on the day) is required. However, a small-scale buy-side entity can instead provide a snapshot report (the terms of the day's transactions) for derivatives other than equity derivatives²⁰.
• A UTI (unique transaction identifier) is needed to identify a transaction. When a new transaction or position is reported, a new UTI is created and reported. Changes and terminations are reported under the identifier of the original transaction²¹.
• The reporting deadline is normally T+2 (business days), extended from the earlier T+1. Package transactions (other than foreign exchange swaps) have a deadline of T+4²².
• Reports are sent to the trade repository using XML tags from ISO 20022 messages. auth.030.001.04 (DerivativesTradeReportV04) is used for transaction and valuation reports, and auth.108.001.02 (DerivativesTradeMarginDataReportV02) for collateral reports²³.
• Reporting can be delegated to a third party. The counterparty, a central counterparty, a service provider and others can be appointed, but the reporting entity remains responsible for the completeness, accuracy, and currency of the reports²⁴.

Amendments to the reporting rules are published as comparison tables of the text. ASIC's page carries a comparison of the version amended as of October 20, 2025 and the version of October 21, 2024⁴. The regulatory guide says that, from October 20, 2025, the alternative reporting provision for UTIs was removed for new transactions²¹.

Clearing

In the draft, a person with a clearing obligation has a transaction subject to clearing cleared at a clearing facility as soon as reasonably practicable after entering into it. Clearing takes place by novation, with the clearing facility operator becoming the counterparty, so that the rights and obligations between the original parties are extinguished or nearly extinguished²⁵.

The clearing obligation does not apply in the following cases.

• The transaction subject to clearing has terminated by the time it should be cleared.
• There is no licensed or designated facility that clears the transaction.
• The transaction is with an affiliate in the same corporate group.
• The transaction is entered into as a result of multilateral compression or a post-trade risk reduction exercise (subject to certain conditions).
• A foreign regime requires clearing within 3 business days of the trade, and the transaction is cleared by that foreign deadline.

The exception for post-trade risk reduction was limited to multilateral compression in the 2015 rules, and the 2026 rules extend it to all post-trade risk reduction¹⁴.

In the draft, a financial institution that becomes subject to the clearing obligation notifies ASIC of the start date and end date of clearing²⁶. ASIC's page has a list of the institutions that have given notice⁵.

Margin and risk mitigation

CPS 226 sets both variation margin and initial margin.

This table follows CPS 226²⁷. Initial margin in cash may be held in a demand deposit account with a third-party custodian unconnected to either party. For the combined amount of variation margin and initial margin, a minimum transfer amount applies to leave out small transfers. That amount must not exceed AUD 750,000²⁸.

The initial margin amount is calculated using either a model approved by APRA or the standardised schedule²⁹. The covered entity must exercise due diligence to check whether a counterparty is subject to the margin requirements. The counterparty's self-declaration or publicly available materials are accepted as ways of checking³⁰.

Besides margin, CPS 226 sets risk mitigation practices: written trading relationship documentation, trade confirmation, portfolio reconciliation, portfolio compression, valuation procedures, and dispute resolution. As a rule, trade confirmation is done as soon as possible and documented by an automated method that cannot be overwritten or erased³¹.

Effective dates and amendments

The period of the 2022 version of the reporting rules runs to October 20, 2024, and the 2024 version runs from October 21, 2024⁴³².

The clearing rules (2026 version) replace the 2015 rules. ASIC's April 2026 publication writes that the new rules apply¹⁴. In the consultation draft, commencement is the later of the day after registration and April 1, 2026¹³.

Substituted compliance for margin

CPS 226 defines the margin regulation for non-centrally cleared derivatives set by the BCBS and IOSCO (as at July 23, 2019) as the "BCBS-IOSCO framework". Attachment D lists foreign regimes whose outcomes are comparable to that framework and CPS 226³⁴.

A transaction that complies in their entirety with a foreign margin regime that APRA lists, and that meets the specified conditions, is not subject to the margin requirements of CPS 226. This is "substituted compliance". The risk mitigation requirements are separate.

The listed authorities include Canada, the European Commission, the Hong Kong Monetary Authority, Japan's Financial Services Agency, Ministry of Agriculture, Forestry and Fisheries and Ministry of Economy, Trade and Industry, the Monetary Authority of Singapore, Switzerland, the UK's FCA and PRA, and the US CFTC and federal banking agencies. For the regimes of the authorities from Canada to the UK PRA, substituted compliance cannot be used for transactions between members of the same margining group. According to the source, this condition is not stated for the regimes of the US authorities³⁵.

Practical impact

Consider a hypothetical example in which Bank W is an ADI. Bank W is a reporting entity as an ADI and reports all derivative transactions to which it is a party. It is also an APRA covered entity under CPS 226.

Margin is exchanged on transactions that meet the conditions in "Persons and transactions subject to margin". These are new transactions in Bank W's books, where the counterparty is a financial institution that is not excluded, and the margining groups of Bank W and the counterparty each exceed their levels.

Under the draft framework, a clearing obligation arises only when the clearing threshold is met. If Bank W does not reach the threshold, it has no obligation unless it elects one. If it does, then under the draft framework it has a clearing obligation for the covered interest rate swaps.

What this article does not cover

A country-by-country comparison of clearing and reporting thresholds and deadlines, and the confirmation of the start date of application of the clearing rules (2026 version), is not covered on this page.

Notes

1. ASIC "OTC derivatives", opening paragraph. It states that ASIC is responsible for making and enforcing the derivative transaction rules that set the reporting and clearing obligations. ↩

2. APRA "Prudential Standard CPS 226", "Application" paragraphs 2, 3 and 5. Prudential Handbook version (determination dated December 1, 2022, effective January 1, 2023). ↩ ↩² ↩³ ↩⁴

3. ASIC "Regulatory Guide 251" (April 2026), RG 251.7 to RG 251.11. Part 7.5A was inserted in 2012. Section 901A is the rule-making power, section 901B the Minister's determination, sections 901C and 901D the limits, and section 907D the exemptions. ↩ ↩²

4. ASIC "Derivative transaction reporting" page. The 2024 rules, the periods of the 2013 and 2022 rules, the Minister's determination, the exemptions for small persons in regulations 7.5A.70 to 7.5A.74, and the comparison tables of amendments. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

5. ASIC "Central clearing of OTC derivatives" page. The name of the clearing rules, the covered currencies (Australian dollar, US dollar, euro, pound sterling, Japanese yen), and the list of institutions that have given notice of a clearing obligation. ↩ ↩² ↩³

6. ASIC "Derivative trade repositories" page. The licensing requirement, the Trade Repository Rules 2023, the two licensed entities, the period of the 2013 rules (July 10, 2013 to October 1, 2023), and that no trade repository is currently prescribed. ↩ ↩² ↩³ ↩⁴

7. APRA "Prudential Standard CPS 226", the preamble (determination No. 2 of 2022, dated December 1, 2022, effective January 1, 2023) and the "Authority" section. ↩ ↩²

8. RG 251.59 to RG 251.63. Rule 1.2.5 defines reporting entities. RG 251.64 excludes AFS licence holders without a licence covering the class of derivative, and, in client clearing where the clearing participant and the client are both parties to the clearing house, the clearing participant. ↩

9. RG 251.65 and RG 251.66. The definition of nexus derivative is in rule 1.2.3. ↩

10. RG 251.40 and RG 251.41. The asset classes set by the Minister's determination are commodities other than electricity, credit, equity, foreign exchange and interest rates. ↩

11. RG 251.58. Transactions with unconsolidated affiliates are reportable, and transactions within the same legal entity are not. ↩

12. RG 251.68 to RG 251.71. The definition of small-scale buy-side entity is in rule 1.2.3. The notional amount is the gross notional outstanding of derivatives that are not centrally cleared, at AUD 12 billion or less. ↩

13. ASIC "Attachment 1 to CS 33 Draft ASIC Derivative Transaction Rules (Clearing) 2026" (October 2025), rules 1.1.2, 1.1.5, 1.2.4 and 1.2.7. Consultation draft. ↩ ↩²

14. ASIC "Market Integrity Update, Issue 176 – April 2026", "Updates to OTC derivative clearing and reporting rules". The 2026 rules replace the 2015 rules, the changes are minor, and an exception is extended. ↩ ↩² ↩³

15. Draft rule 1.2.3. The tables for basis swaps and fixed-to-floating swaps, forward rate agreements and OIS. Subrule 1.2.3(6) excludes transactions with optionality, in more than one currency, or with a conditional notional amount. ↩ ↩²

16. CPS 226 definition ("covered counterparty"). ↩ ↩²

17. CPS 226 paragraphs 13 to 14 and Table 1 (variation margin; the level is AUD 3 billion in every period), and paragraphs 19 to 20 and Table 2 (initial margin). Prudential Handbook version. ↩ ↩² ↩³

18. CPS 226 notes to paragraphs 14 and 20 (physically settled foreign exchange forwards and swaps). ↩ ↩²

19. CPS 226 note 8 to paragraph 14 (cases that are not new transactions). ↩ ↩²

20. RG 251.55 to RG 251.57. Rule 2.2.8. ↩

21. RG 251.93 and RG 251.94. The UTI rule is rule 2.2.9. ↩ ↩² ↩³

22. RG 251.132. The usual deadline was extended from T+1 to T+2, and package transactions (other than foreign exchange swaps) are T+4. ↩

23. ASIC "Derivative transaction reporting", the "ISO 20022" section. Rule 2.2.4 requires reporting using the XML tags of the ISO 20022 message definition, including the fields in Part S1.3. ↩

24. RG 251.72 and RG 251.73. Rule 2.2.7 provides for delegation of reporting and rule 2.2.6 for responsibility. ↩

25. Draft rules 2.1.1 to 2.1.6. Rule 2.1.1 is the clearing obligation, and rules 2.1.2 to 2.1.6 are the exceptions. ↩

26. Draft rule 3.1.1. Notice of the start date and end date of clearing. ↩

27. CPS 226 paragraphs 16 to 18 (variation margin) and 22 to 29 (initial margin). ↩

28. CPS 226 paragraph 30. The minimum transfer amount for the combined amount of variation margin and initial margin must not exceed AUD 750,000. ↩

29. CPS 226 paragraph 32. A model approved by APRA, or the standardised schedule in Attachment A. ↩

30. CPS 226 paragraph 31 and the following paragraph on self-declaration. ↩ ↩²

31. CPS 226 paragraphs 73 to 95 (risk mitigation). Trade confirmation is in paragraphs 78 to 80, reconciliation in 81 to 83, compression in 84 to 86, and dispute resolution in 91 to 95. ↩

32. RG 251.6. The reporting regime has existed since 2013, and updated reporting that adopts international standards started on October 21, 2024. ↩ ↩²

33. Federal Register of Legislation, "ASIC Derivative Transaction Rules (Clearing) 2026" (F2026L00262), register record. Made March 16, 2026, registered March 17, 2026. ↩ ↩²

34. CPS 226 definition ("BCBS-IOSCO framework"). ↩

35. CPS 226 paragraphs 64 to 66 and Attachment D. The conditions are in paragraph 66. The regimes in subparagraphs (a) to (j) of paragraph 1 carry the condition that substituted compliance cannot be used between members of the same margining group (paragraph 2). The condition is not stated for the US regimes. ↩

36. RG 251.153 to RG 251.160. Notification of significant breaches by AFS licence holders is under RG 78. A breach of section 901E is not treated as significant merely because it is a breach of a civil penalty provision (regulation 7.6.02A). ↩