Government to consult on OTC derivatives
The Government will consult with industry on regulations around over-the-counter (OTC) derivatives, a process it said was underway before the collapse of MF Global highlighted the need to strengthen client money protections.
Assistant Treasurer and Minister for Financial Services and Superannuation Bill Shorten has launched a discussion paper to consult with retail clients and industry stakeholders about how they are using client money accounts in relation to OTC derivatives transactions and whether retail investors are protected appropriately.
The paper, 'Handling and use of client money in relation to over-the-counter derivatives transactions', considers various aspects of Australia's current regulatory regime for the keeping and handling of client monies, in particular the regulation of OTC derivatives, according to Shorten's office.
Shorten said that in light of the collapse of MF Global the Government is now moving more quickly to consider these issues.
"These markets are less heavily regulated than on-exchange derivatives markets, which have also seen on-going strengthening of applicable reporting and reconciliation rules by [the Australian Securities and Investments Commission] in recent times," Shorten said.
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