Notice

ASX OTC Clearing – End of Transitional Arrangements for OTC Default Fund Commitments

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Notice reference number: 0414.23.05
Date published: 05/05/23
Effective as of: 05/05/23
Last updated: 05/05/23

ASX confirms that all conditions to end the Transitional Arrangements for the calculation of OTC Participant commitments to the ASX Clear (Futures) default fund have been met as of 1 May 2023.

Background

The ASX Clear (Futures) default fund commitments for all OTC Participants are currently calculated under Transitional Arrangements defined in the ASX OTC Rulebook – Schedule 2 – OTC Commitment section 4 (Transitional Arrangements).

Under the Transitional Arrangements each OTC Participant’s default fund commitment is made up of a Fixed and Variable component:

  • Fixed Component: $5m  (Fixed contributions from all OTC Participants total $40m out of the total $100m in OTC Participant commitments to the default fund)
  • Variable Component: $7.5m (Currently fixed at $7.5m per OTC Participant. Variable contributions from all OTC Participants total $60m out of the total $100m in OTC Participant commitments to the default fund)
  • Total: $12.5m

 

What happens now that the Transitional Arrangements have ended?

The Variable component of the OTC commitment for each OTC Participant will be re-calculated each quarter based on the proportion of initial margin over the calculation period as set out in ASX OTC Rulebook – Schedule 2 – OTC Commitment section 3 (Variable OTC Commitment). This will occur from the next quarterly recalculation date, with the revised OTC commitment being payable from the relevant Effective Date:

Recalculation Date

Effective Date

Commitment Period

15 May 2023

31 May 2023

1 June -31 August  

 

Next steps

·       ASX has been in contact with impacted OTC Participants to provide an estimated impact.

·       ASX will provide a final calculation following the recalculation date of 15 May 2023 listed above.

Need more information?

Please contact ASX for further information.
 

Issued by

Allan McGregor,
Senior Manager, Rates

Contact information

Allan McGregor
+61 (02)  9227 0814
Allan.McGregor@asx.com.au

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