Austraclear settlement of Market Repo transactions - Extension of “no action” relief
Austraclear refers to notice [1433.19.12](see link) published on 11 December 2019, under which Austraclear participants were reminded of their obligations under Regulation 25.4 of the Austraclear Regulations (Regulations) and were advised that until 23 November 2020 “no action” will be taken against any Austraclear participants for a failure to comply with Regulation 25.4 of the Austraclear Regulations (relating to the settlement of market repos in Austraclear).
Following publication of the abovementioned notice, Austraclear has received market feedback with respect to the time required by Austraclear participants to implement the necessary changes to enable transition to use of the repo module. In consideration of this feedback on market readiness for adoption, and the need for Austraclear to complete aspects of its own readiness, Austraclear has determined that the deadline for the “no action” relief will be extended to 22 November 2021.
Participants are reminded that this "no action” relief does not constitute a waiver of the Austraclear Regulations.
Enhanced market repo functionality is planned to be released in the November 2020 Austraclear Service Release (SR10).
The key Austraclear Participants targeted by these enhancements are the existing market repo module users and it is expected that all users utilise the new functionality.
To support the migration, Austraclear resources will be available to assist existing market repo module users in their planning and education. There will also be market repo customer technology testing, expected to be in October 2020.
All other Austraclear participants can utilise the market repo module in advance of the mandatory adoption date of 22 November 2021.
Austraclear Participants should note it is possible to instruct to the market repo module either via SWIFT messaging protocols or manually via the Austraclear user interface.
Austraclear recognises internal systems changes may be required by Austraclear participants to enable these participants to settle market repos using the repo module.
To support the market in complying with the requirement for market repo settlement using the repo module, Austraclear will be conducting client education sessions individually and via various industry forums. Austraclear resources will be available to assist Participants in their education and planning.
Austraclear participants will be required to attest to their preparation and readiness at regular check points prior to mandatory adoption of market repo by 22 November 2021
Austraclear continues to recommend that Austraclear Participants assess at the earliest opportunity the extent of any technical and process changes required.
For more information refer to notice [1433.19.12] and the Austraclear user guide. Austraclear resources will be made available as outlined above to support participants as the initiative progresses. Further technical and process details will be provided in May 2020.
John Pearce, Business Development Manager, Austraclear
Austraclear and ASX Collateral Service Desk on 1300 362 257
or via email to Austraclear@asx.com.au