Regulatory and supervisory deference in the context of Australia’s over-the-counter derivative trade reporting and derivative trade repositories regimes

Abstract

As the over-the-counter (OTC) derivatives market is very much a global one, the topic of deference between regulators has come into focus in recent times as one potential way of dealing with cross-border overlaps in OTC regulation. In this paper, we give an overview of OTC derivatives reform in Australia, then outline the Australian OTC derivatives trade reporting regime, explaining how "alternative reporting", available to foreign reporting entities subject to comparable foreign regulation, is one important example of regulatory deference.We move on to discuss the trade repository licensing regime, which allows for both regulatory and supervisory deference with regard to foreign trade repositories. We examine the licensing of DTCC Data Repository (Singapore) PTE Ltd (DDRS) in detail as an example in which both regulatory and supervisory deference have been exercised. Last, we discuss the extent to which the Australian regime for OTC derivatives regulation can provide the basis for deference by other regulators.