ASIC has been increasing supervision over the Australian derivatives market over the past years. Since 21 October 2024, OTC derivative transactions in Australia are reported under the ASIC Derivative Transaction Rules (Reporting) 2024. The rules require reporting entities to have an LEI and to identify their counterparties by LEI where the counterparty is eligible for one – this is why banks ask Australian companies for an LEI before entering into FX forwards or interest rate swaps.
ASIC also introduced the ASIC Derivative Transaction Rules (Clearing) 2015 (F2015L01960) that introduced a clearing mandate for parties transacting in OTC interest rate derivatives in various currencies, including Australian and US dollars, Euros, British Pounds and Japanese Yen. This mandate affects Australian and foreign financial institutions that meet the clearing threshold requirements.
APRA also requests LEIs from authorised deposit-taking institutions with regard to their largest exposures as well as any exposures that are equal to or greater than 10% of their Tier 1 Capital. Government-related entities are required to provide LEIs for their largest exposures and all other exposures equal to or greater than 5% of their Tier 1 Capital. The requirements do not mandate LEIs; they simply instruct that they should be provided if the counterparty has an LEI.
Australian entities transacting in the European market were required to obtain an LEI in 2018 in order to continue operating within that jurisdiction. Apply for an LEI number for your company.
