The Australian Stock Exchange (ASX) has moved a step closer to compliance with G20 OTC derivatives rules, as the ASX’s new OTC Derivatives Clearing Service cleared its first Australian dollar interest rate swap trade at the end of last week. It was an over-the-counter transaction between the Commonwealth Bank of Australia and Deutsche Bank and the trade cleared successfully.
This is a component of Australia’s G20 commitments on central counterparty clearing of interest rate swaps. That centralised clearing service will be extended to additional currencies and derivatives instruments and client clearing will be implemented by the end of 2013.
Collateral is kept onshore with the ASX OTC Derivatives Clearing Service, where it is subject to Australian laws and regulations.
ASX is working with nine customers to develop the dealer-to-dealer aspect of the clearing service, ANZ, Commonwealth Bank of Australia, Citi, Deutsche Bank, JP Morgan, Macquarie Bank, National Australia Bank, UBS and Westpac. Each bank has said they will help develop and become users of the service before 1 January 2014.