Council of Financial Regulators' Review
On 12 October 2016, the Treasurer, the Hon Scott Morrison MP, announced the release of two policy statements by the Council of Financial Regulators on clearing and settlement for the cash equity market:
- Regulatory Expectations for Conduct in Operating Cash Equity Clearing and Settlement Services in Australia (Regulatory Expectations)
- Minimum Conditions for Safe and Effective Competition in Cash Equity Clearing in Australia (Minimum Conditions)
The development of the two policy statements by the Council of Financial Regulators was endorsed by the Government as part of its announcement on cash equities clearing competition on 30 March 2016.
On 30 March 2016, the Treasurer announced a reform package that will be developed over the next 18 months to provide the path for competition in cash market clearing. The Treasurer also released the Council of Financial of Regulators’ ‘Review of Competition in Clearing Australian Cash Equities: Conclusions’ (CFR Review Conclusions Paper). The Council of Financial Regulators’ review was commenced in February 2015 with the release of the Consultation Paper ‘Review of Competition in Clearing Australian Cash Equities'.
The Council of Financial Regulators previously undertook a review of competition in cash equities clearing in 2012 (2012 Review). The 2012 Review recommended to government that a decision on any licence application from central counterparty seeking to compete in the Australian cash equity market be deferred for a period of two years. The 2012 Review also recommended that ASX be encouraged to work with industry to develop a Code of Practice. The government endorsed the recommendations of the 2012 Review in February 2013.