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Margining and risk mitigation for non-centrally cleared derivatives

Regulation Impact Statement- Australian Prudential Regulation Authority

On 17 October 2016, the Australian Prudential Regulation Authority (APRA) released the financial prudential standard for margining and risk mitigation for non-centrally cleared derivatives.

A Regulation Impact Statement (RIS) was prepared by APRA, assessing options to implement internationally agreed reforms on margining and risk mitigation for non-centrally cleared derivatives in the Australian financial system. The RIS considers two options for the margining requirements and two options for risk mitigation standards. The RIS recommends a margining requirement consistent with recommendations made by Basel Committee on Banking Supervision (BCBS) and International Organisation of Securities Commissions (IOSCO) but exempts small market participants. It also recommends a risk mitigation standard that applies the core risk mitigation standards recommended by the BCBS and IOSCO.

The RIS has been assessed as compliant and consistent with best practice by the Office of Best Practice Regulation (OBPR).  It estimated an average annual regulatory saving of $24.6 million. The OBPR has agreed to the estimate.

Attachment File type Size
Final RIS docx 113.18 KB
Final RIS pdf 169.02 KB
Certification letter docx 71.26 KB
Certification letter pdf 87.09 KB
OBPR assessment letter docx 151.73 KB
OBPR assessment letter pdf 54.95 KB