SFE Regulatory Framework

  Trading Clearing and Settlement  
SFE Group Entity
  • Sydney Futures Exchange Limited
    (SFE)
  • SFE Clearing Corporation Pty Ltd (SFE Clearing)
  • Austraclear Limited (Austraclear)
Government Regulators
  • ASIC & relevant Minister
  • ACCC
  • CFTC and SEC (USA)
  • FSA (UK)
  • SFC (HK)
  • ASIC & relevant Minister
  • Reserve Bank of Australia
  • ACCC
  • SFC (HK)
  • ASIC & relevant Minister
  • Reserve Bank of Australia
  • ACCC
Relevant Law
  • Corporations Act 2001 (Cth)
  • Trade Practices Act 1974 (Cth)
  • Corporations Act 2001 (Cth)
  • Trade Practices Act 1974 (Cth)
  • Corporations Act 2001 (Cth)
  • Trade Practices Act 1974 (Cth)
SFE Entity Regulation
  • Exchange Board
  • Exchange Business Conduct Committee
  • Exchange Market Practices Committee
  • SFE Clearing Corporation Board
  • SFE Clearing Business Conduct Committee
  • Austraclear Board

ASIC - Australian Securities and Investments Commission
ACCC - Australian Competition and Consumer Commission
RBA - Reserve Bank of Australia
CFTC - Commodity Futures Trading Commission (USA)
SEC - Securities and Exchange Commission (USA)
FSA - Financial Services Authority (UK)
SFC - Securities and Futures Commission (Hong Kong)

SFE Corporation Limited (SFE Corp) is the holding company of Sydney Futures Exchange Limited (SFE), SFE Clearing Corporation Pty Ltd (SFE Clearing) and Austraclear Limited (Austraclear).

SFE and ASIC are co-regulators of the futures market operated by SFE.

SFE Clearing, ASIC and the Reserve Bank of Australia (RBA) are co-regulators of the clearing and settlement facility operated by SFE Clearing.

Austraclear, ASIC and the RBA are co-regulators of the clearing and settlement facility operated by Austraclear.

All companies in the SFE Group are subject to overview by the ACCC regarding competition and market power issues.

The members of the SFE Group are able to provide finely tuned expertise, which enhance their co-regulatory functions. This in turn helps improve market integrity. The SFE Group's structure and activities, which substantially underpin these functions, include the following:
  • In respect of the market operator licences - Compliance and Surveillance, Participant and Client Services, the Supervisory Committees and the operational activities of the Trading Operations Department.
  • In respect of the clearing and settlement facility licence - Compliance and Surveillance, Participant and Client Services, the Supervisory Committees, and the operational activities of SFE Clearing's extensive Risk Management activities.
  • The Operating Rules of SFE, SFE Clearing and Austraclear contain comprehensive provisions for preventing conflicts and enforcing compliance with the operating rules. These complement relevant Law, are approved under legislation and apply to all Participants. They cover all aspects of trading and of clearing and settling, including monitoring market conduct, disciplining of Participants and suspension or termination of Participation rights and market access.
  • The Operating Rules are continuously monitored for compliance with the Corporations Act to ensure that changes to the law are reflected and to ensure full compliance by Participants with the Operating Rules.
  • Supervision of market Participants is undertaken by way of a variety of pro-active and re-active activities in order to optimise use of resources and best facilitate overall market compliance with SFE's Operating Rules. The more pro-active activities include an educational and advisory role, involving both ad hoc and scheduled training, discussion forums, market communications and Participant status management, together with pre-emptive market, event or position scenario-based analysis and monitoring where circumstances may warrant special attention (such as major contract expiries) and resultant enhancements to Rules or practices to better suit market circumstances. Re-active activities include compliance monitoring, review and inspection of market activity and supporting records, together with investigation of significant or unusual activity or specific complaints, and imposing disciplinary action as required. Such activities may also result in amendments to Rules, practices or operational procedures, limits and triggers.
  • The Operating Rules include arrangements for a number of important regulatory functions including: handling conflicts, monitoring Participant conduct, enforcing compliance with the Operating Rules, and ensuring there is no involvement by a disqualified individual as a director or officer of either SFE, the Exchange, SFE Clearing or Austraclear.
  • Relevant legislation ensures there can be no unacceptable control situation regarding the shareholding of SFE.

As part of its ongoing licence obligations, SFE must provide an Annual Report to ASIC outlining the extent to which it has compiled with its various licence obligations during the reporting period.

On an annual basis, ASIC also undertakes its own formal assessments of the extent to which each SFE licensed entity has continued to comply with its respective licence obligations.

On every occasion to date, ASIC has concluded that each SFE licensed entity has met its obligations and that each entity's respective arrangements continue to be adequate to supervise their respective market operations or clearing and settlement facilities, including arrangements for:

  • handling conflicts between its commercial interests and the need to ensure that the market/facility operates in a fair, orderly and transparent manner;
  • monitoring the conduct of participants in the market; and
  • enforcing compliance with the market's/clearing and settlement facility's operating rules.

Copies of all previous and current ASIC annual assessment reports are available on ASIC's website.