FIA and ISDA respond to Australia FMI regulatory reforms consultation

9 February 2024

FIA and ISDA have submitted a response to the Australian Treasury's consultation on the financial market infrastructure reform package. In particular, the associations have carefully considered the proposed crisis resolution regime.

While acknowledging the importance of ensuring the continuity of critical clearing functions and financial stability in Australia, the associations raise concerns about certain provisions in the draft. Key issues include the potential impact on market participants, the lack of explicit definitions and safeguards around resolution powers, and the interaction with close-out netting.

The response delves into the associations' recommendations for specific limitations, clarity on crisis prevention powers, and the need for legal certainty in enforcing netting and collateral arrangements. Additionally, the response emphasises the distinction between domestic and overseas CCPs in crisis management provisions and welcomes clarity on ASIC's licensing and supervisory powers, urging a proportionate and deferential approach.

Read the response.

  • FIA
  • CCP Recovery and Resolution
  • Advocacy