On 8 July 2014 the Australian Government issued a paper seeking
industry views on its proposal to require central clearing of
certain AUD-denominated interest rate derivatives ("AUD
IRDs"). The proposals paper follows recommendations made by
the Council of Financial Regulators in April 2014 that the
Government consider a central clearing mandate for trades between
internationally active dealers in AUD IRDs. These proposals are in
addition to those made by the Government in February 2014 to
require central clearing of interest rate derivatives in G4
currencies ("G4 IRDs").
The move to require central clearing of AUD IRDs represents a
departure from the approach initially adopted by the Government in
2013. At that time, it was observed that the domestic dealers were
"voluntarily" moving to a central clearing model for
trading in AUD IRDs and that it was only necessary to require
clearing in G4 IRDs. Since then, the Government believes that good
progress has been made
