15 December 2023

Consultation on financial market infrastructure reforms

The Albanese Government is today releasing draft legislation to strengthen regulatory arrangements for Australia’s financial market infrastructure.

This legislation is the next step in modernising Australia’s financial system and implements long‑standing recommendations of the Council of Financial Regulators.

Financial market infrastructure facilitates the movement of capital, the efficient operation of markets and enables critical financial system operations – including the issuance and trading of securities, Commonwealth and State Government debt, access to liquidity and risk‑management products, and the RBA’s implementation of monetary policy.

A series of reviews by the CFR have identified failings in the current regulatory framework for financial market infrastructure.

These reviews found there was no regime to ensure continuity of clearing and settlement services in the face of a crisis.

The findings of these reviews were ignored by the former Government for years.

The legislation builds on the Government’s reforms to facilitate competition in clearing and settlement services, passed by Parliament in September 2023.

These next reforms will allow the RBA to step in and quickly resolve crises impacting critical financial market infrastructure, and strengthen the RBA and ASIC’s regulatory powers.

Together, the reforms will provide certainty to industry, and ensure Australia’s financial markets continue to operate in a manner that is fair, orderly and efficient.

The draft legislation and explanatory materials are available on the Treasury website.

Consultation is open until 9 February 2024.