The Turnbull Government has delivered important new reforms to make Australia's financial system more resilient and ensure our financial institutions can continue to participate in global capital markets, Minister for Small Business and Assistant Treasurer Kelly O’Dwyer MP said.
“Without this reform, Australian businesses would have soon faced significant restrictions and increased costs to trade in international markets, and limits on their capacity to hedge key business risks,” Minister O’Dwyer said.
“As part of Australia’s G20 commitment in the aftermath of the GFC, these reforms ensure Australia’s legislation is consistent with local and international measures to reduce risks in over-the-counter derivatives markets.
“The Turnbull Government has also delivered on its commitment to clarify domestic regulation to support globally coordinated policy efforts, and facilitate the ongoing participation of Australian entities in international capital markets.
“The Act will ensure that Australian businesses will be ready and able to comply with international margin requirements for non-centrally cleared derivatives, due to be phased in from September 2016.
“The Regulation, also made today, extends the capacity to comply with margin requirements to Australian life insurers and registrable superannuation entities. This will enable them to hedge key business risks. In addition, the Regulation fine-tunes definitions provided in the Act to reflect current market practice.
“These measures complement a suite of other reforms led by the Basel Committee on Banking Supervision, and implemented in Australia, to make financial institutions and systems more reliable and better able to withstand major shocks.
“The Act and Regulation are both deregulatory measures, which allow Australian institutions to comply with international requirements and any corresponding prudential standards set by the Australian Prudential Regulation Authority (APRA).
“The Act and Regulation have been developed in close consultation with APRA, the Reserve Bank of Australia (RBA), the Australian Securities and Investments Commission (ASIC), and industry.
“The reforms allow Australia to maintain its position as a regional financial centre with a robust and efficient regulatory framework,” Minister O’Dwyer said.