Regulation of SFE Clearing and Austraclear

SFE Clearing and Austraclear are Clearing and Settlement Facilities and are regulated under the Corporations Act 2001 (Cth). Under Chapter 7, they are is obliged to take all reasonable steps to:

  • To the extent reasonably practical, (i) comply with financial stability standards determined by the RBA under the Act, and (ii) to do all things necessary to reduce systemic risk;
  • To the extent reasonably practical, do all things necessary to ensure the facility's services are provided in a fair and effective way;
  • Comply with conditions on its Australian CS Facility Licence;
  • Have adequate arrangements for supervising the facility, including the handling of conflicts of interest, and enforcing compliance with the facility's operating rules;
  • Have sufficient human, technical and financial resources to properly operate the facility and provide the required supervisory arrangements;
  • Take all reasonable steps to ensure an unacceptable control situation does not exist; and
  • Take all reasonable steps to ensure that no disqualified individual becomes involved in the licensee.

In addition, the Act requires a licensee to provide an Annual Report detailing the extent to which the licensee has complied with its obligations under Chapter 7 of the Act, together with any prescribed information as contained in related regulations. The regulations require the following information to be contained within or otherwise accompany the Annual Report:

  • A description of the activities undertaken by the licensee during the reporting period;
  • The resources that the licensee had available and utilised in discharge of its obligations under Chapter 7; and
  • An analysis of the extent to which the licensee considers that the activities undertaken and resources utilised have resulted in full compliance with all of its obligations under Chapter 7.