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ARTICLE · 25 NOVEMBER 2012

Australian OTC derivatives reforms passed - with some changes to meet electricity market concerns

Clayton Utz
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Stakeholders were concerned that limitations on the use of OTC derivatives could affect the underlying physical market.

AustraliaFinance and Banking
Graeme Dennis (Formerly With Clayton Utz)
Graeme Dennis (Formerly With Clayton Utz)
Louise McCoach
Louise McCoach
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The Australian Parliament has just passed the Corporations Legislation Amendment (Derivative Transactions) Bill 2012.

The Derivative Transactions Bill as passed however is not the same as the version introduced into Parliament in September.

The changes require the Minister and ASIC to have regard to the likely impact on the underlying physical markets when making a determination imposing a mandatory obligation or making a Derivative Transaction Rule (DTR) in relation to a commodity derivative.

Why have the changes been made?

The changes have been made in response to concerns expressed by stakeholders that limitations on the use of OTC derivatives may affect the operation of the underlying physical market.

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