OTC derivatives trading in Australia – are you playing by the rules?

Yesterday we mentioned AFSL obligations in relation to OTC derivatives trading by electricity retailers who operate under an energy retail authorisation.  Today we look at this area in more detail.     By Dr Drew Donnelly, Compliance Quarter. So, what are the rules for OTC derivatives trading? Today’s article is an introduction to the regulatory framework for OTC derivatives in Australia. It is the first of three articles on derivatives trading and compliance. Subsequent articles will look at the rules as they relate to wholesale electricity markets as well as a new law aiming to protect client money provided to retail derivative clients. What are derivatives? Derivatives are a type of financial instrument. They can be distinguished from other financial instruments, such as shares and bonds in that the value…
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