Footnotes

Chapter 1 - Introduction

[1]        Parliamentary Joint Committee on Corporations and Financial Services, Current inquiries, http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/Completed_inquiries/2010-13/derivatives/index (accessed 21 September 2012).

[2]        International Monetary Fund, World Economic Outlook, October 2008, p. 1.

[3]        A derivative is a security, in the form of a contract between two or more parties, based on an arrangement to buy one or more underlying assets for future delivery at a specified date or at a specified point in time. Common underlying assets are stocks, bonds, commodities, currencies, interest rates and market indexes. A derivative is a way for those parties to the contract to hedge their risk: their profit or loss will be determined by the value of the asset at the specified point in time.

[4]        Over-the-counter derivatives operate through a dealer network where dealer-brokers negotiate directly with each other. A dealer network is often used by small companies that are unable to meet exchange listing requirements.

[5]        Mr Gary Gensler, Chairman, Commodity Futures Trading Commission, 2 December 2011, as cited in Corporations and Markets Advisory Committee, Derivatives: Report, December 2011, p. 15. An option is a form of derivative whereby an investor purchases the right to buy a stock or a bond at a specified future date for a specified price. A swap is a form of derivative whereby two parties agree to exchange financial instruments—such as foreign exchange—at a specified future time at a pre-specified exchange rate

[6]        Committee on Payment and Settlement Systems–Technical Committee of the International Organisation of Securities Commissions, Considerations for trade repositories in OTC derivatives markets: Consultative report, May 2010, p. 1.

[7]        The Group of 20, or G20, is a forum for international collaboration and coordination on matters affecting international financial stability. The G20 includes 19 member countries and the European Union. For further information, see G2012 Mexico, What is the G20, http://www.g20.org/index.php/en/what-is-the-g20 (accessed 21 September 2012).

[8]        G20 Information Centre, G20 Leaders Statement: The Pittsburgh Summit, 24 – 25 September 2009, http://www.g20.utoronto.ca/2009/2009communique0925.html (accessed 17 September 2012).

[9]        G20 Information Centre, Cannes Summit Final Declaration – Building our common future: Renewed collective action For the benefit of all, 4 November 2011, paragraph 24, http://www.g20.utoronto.ca/2011/2011-cannes-declaration-111104-en.html (accessed 17 September 2012); G20 Information Centre, G20 Toronto Summit Declaration, 27 June 2010, paragraphs 24 – 26, http://www.g20.utoronto.ca/2010/to-communique.html (accessed 17 September 2012).

[10]      G20 Information Centre, G20 Leaders Declaration, 19 June 2012, paragraph 39, http://www.g20.utoronto.ca/2012/2012-0619-loscabos.html (accessed 17 September 2012).

[11]      G20 Information Centre, G20 Leaders Statement: The Pittsburgh Summit, 24 – 25 September 2009, http://www.g20.utoronto.ca/2009/2009communique0925.html (accessed 17 September 2012).

[12]      The Financial Stability Board is an international body that coordinates the activities of domestic financial authorities undertaken in response to international policies and standards. For further information, see, Financial Stability Board, Overview, http://www.financialstabilityboard.org/about/overview.htm (accessed 21 September 2012).

[13]      In relation to financial markets, the Australian Securities and Investments Commission has defined 'arbitrage' as 'the process of seeking to capture pricing inefficiencies between related products or markets'. For further information, see, for example, Australian Securities and Investments Commission, Report 125: Australian equity market structure, November 2010, p. 103.

[14]      Financial Stability Board, Implementing OTC derivatives market reforms, 25 October 2010, p. iv.

[15]      Financial Stability Board, Implementing OTC derivatives market reforms, pp 1­2.

[16]      Council of Financial Regulators, OTC derivatives market reform considerations, March 2012, pp 18‑19.

[17]      Financial Stability Board, OTC derivatives market reforms: Third progress report on implementation, 15 June 2012, p. 1.

[18]      Council of Financial Regulators, OTC derivatives market reform considerations, pp 18‑19.

[19]      G20 information Centre, G20 members, http://www.g20.utoronto.ca/members.html (accessed 17 September 2012).

[20]      Mr Malcolm Edey, Assistant Governor (Financial Systems), Reserve Bank of Australia, 'Address to the ISDA Annual Australia Conference', 20 October 2011, http://www.rba.gov.au/ or speeches/2011/sp-ag-201011.html (accessed 18 September 2012).

[21]      Council of Financial Regulators, OTC derivatives market reform considerations, pp 25‑25.

[22]      Council of Financial Regulators, OTC derivatives market reform considerations, p. 19.

[23]      Council of Financial Regulators, OTC derivatives market reform considerations, pp 26‑27.

[24]      Council of Financial Regulators, OTC derivatives market reform considerations, p. 19.

[25]      Council of Financial Regulators, OTC derivatives market reform considerations, p. 28.

[26]      Council of Financial Regulators, OTC derivatives market reform considerations, p. 7.

[27]      The Hon Bill Shorten MP, Minister for Financial Services and Superannuation; the Hon Bernie Ripoll MP, Parliamentary Secretary to the Treasurer, 'Implementing G20 commitment on OTC derivative reforms' Media release 024, 18 April 2012.

[28]      Treasury, Consultation and submissions – Implementation of a framework for Australia's G20 over-the-counter derivatives commitments: Consultation paper, http://www.treasury.gov.au/ConsultationsandReviews/Submissions/2012/Over-the-counter-derivatives-commitments-consultation-paper/Submissions (accessed 18 September 2012).

[29]      Treasury, Consultations and submissions – corporations legislation and (derivative transactions) Bill, http://www.treasury.gov.au/ConsultationsandReviews/Submissions/2012/Derivative-Transactions (accessed 18 September 2012).

[30]      Financial Stability Board, OTC derivatives market reforms: Third progress report on implementation, p. 7.

Chapter 2

[1]        The Hon Bill Shorten MP, House of Representatives Hansard, 12 September 2012, pp 4–6.

[2]        The Hon Bill Shorten MP, House of Representatives Hansard, 12 September 2012, pp 4–6.

[3]        The Hon Bill Shorten MP, House of Representatives Hansard, 12 September 2012, pp 4–6.

[4]        Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.24.

[5]        Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.23.

[6]        Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.108.

[7]        Proposed Section 901B, Corporations Act 2001.

[8]        Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.95.

[9]        Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.95.

[10]      Proposed Sections 901C-901D, Corporations Act 2001.

[11]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.107.

[12]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.79.

[13]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.98.

[14]      Proposed Section 901A, Corporations Act 2001.

[15]      Proposed subdivision B, Part 7.5A, Corporations Act 2001.

[16]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.114.

[17]      Proposed Section 901A, Schedule 1, Corporations Act 2001.

[18]      The Hon Bill Shorten MP, House of Representatives Hansard, 12 September 2012, pp 4-6.

[19]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.82.

[20]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.83.

[21]      The Hon Bill Shorten MP, House of Representatives Hansard, 12 September 2012, pp 4-6.

[22]      Proposed Section 903A, Corporations Act 2001.

[23]      Proposed Section  902A, Corporations Act 2001.

[24]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.136.

[25]      Proposed Section 907B, Corporations Act 2001.

[26]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.230.

[27]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraphs 1.263‑1.264.

[28]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraphs 1.277‑1.279.

[29]      Senate Standing Committee for the Scrutiny of Bills, Alert Digest 11/12, 19 September 2012, pp 3­4.

[30]      Senate Standing Committee for the Scrutiny of Bills, Alert Digest 11/12, p. 4.

Chapter 3

[1]        d-cyphaTrade, Submission 8, p. 1.

[2]        Australian Financial Markets Association, Submission 9, pp 1–2.

[3]        See, for example, Origin, Submission 1, Attachment A, p. 1; TRUenergy, Submission 11, Attachment A, p. 1.

[4]        See, for example, Finance and Treasury Association, Submission 7, p. 1.

[5]        Australian Financial Markets Association, Submission 9, p. 3.

[6]        See, for example, Australian Bankers 'Association, Submission 12, p. 2; National Generators Forum, Submission 10, p. 2.

[7]        Australian Financial Markets Association, Submission 9, p. 3.

[8]        Australian Financial Markets Association, Submission 9, p. 3.

[9]        Australian Financial Markets Association, Submission 9, p. 4.

[10]      Australian Bankers 'Association, Submission 12, p. 3.

[11]      Australian Bankers 'Association, Submission 12, p. 4.

[12]      Treasury, Submission 6, p. 3.

[13]      Treasury, Submission 6, p. 3.

[14]      National Generators Forum, Submission 10, p. 2.

[15]      Origin, Submission 1, p. 1.

[16]      Origin, Submission 1, Attachment A, p.7.

[17]      See, for example, National Generators Forum, Submission 10, pp 5­6.

[18]      See, for example, International Power‑GDF SUEZ, Submission 4, p. 3.

[19]      Energy Supply Association of Australia, Submission 3, p. 2.

[20]      National Generators Forum, Submission 10, p. 5.

[21]      Origin, Submission 1, Attachment A, p. 8.

[22]      Norton Roads, Submission 5, p. 3.

[23]      TRUenergy, Submission 11, Attachment A, p. 1; Finance and Treasury Association, Submission 7, pp 2‑3.

[24]      Finance and Treasury Association, Submission 7, p. 4.

[25]      Australian Bankers 'Association, Submission 12, p. 5.

[26]      Treasury, Submission 6, p. 14.

[27]      Legislative Instruments Act 2003, s. 17.

[28]      Treasury, Submission 6, p. 14.

[29]      Treasury, Submission 6, pp 8­9.

[30]      Origin, Submission 1, Attachment A, p. 6.

[31]      International Power‑GDF SUEZ, Submission 4, Attachment A, p. 4.

[32]      Finance and Treasury Association, Submission 7, p. 4.

[33]      Origin, Submission 1, Attachment A, p 9.

[34]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.170.

[35]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.174.

[36]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.173.

[37]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.175.

[38]      Explanatory Memorandum, Corporations Legislation Amendment (Derivative Transactions) Bill 2012, paragraph 1.82.

[39]      Finance and Treasury Association, Submission 7, p. 3.

[40]      Australian Bankers' Association, Submission 12, p. 5.

[41]      National Generators Forum, Submission 10, p. 5.

[42]      International Power‑GDF SUEZ, Submission 4, p. 1.

[43]      National Generators Forum, Submission 10, p. 3.

[44]      Energy Supply Association of Australia, Submission 3, p. 4.

[45]      Mr Kieran Donoghue, General Manager, Policy, Energy Supply Association of Australia, Proof Committee Hansard, 5 October 2012, p. 8.

[46]      Mr Timothy Reardon, Executive Director, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 1.

[47]      Mr Gregory Everett, Director, Electricity, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 3.

[48]      Mr Gregory Everett, Director, Electricity, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 3.

[49]      Mr Timothy Reardon, Executive Director, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 4.

[50]      Mr Timothy Reardon, Executive Director, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 5.

[51]      Mr Kieran Donoghue, General Manager, Policy, Energy Supply Association of Australia, Proof Committee Hansard, 5 October 2012, p. 8.

[52]      d-cyphaTrade, Submission 8, p. 2.

[53]      d-cyphaTrade, Supplementary submission 8, p. 6.

[54]      Treasury, Submission 6, p. 10.

[55]      Treasury, Submission 6, p. 10.

[56]      Treasury, Submission 6, pp 9–10.

[57]      Treasury, Submission 6, p. 9.

[58]      Mr Timothy Reardon, Executive Director, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 5.

[59]      Mr Kieran Donoghue, General Manager, Policy, Energy Supply Association of Australia, Proof Committee Hansard, 5 October 2012, p. 10.

Additional comments from Coalition Members of the Committee

[1]        Mr Timothy Reardon, Executive Director, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 5.

[2]        Mr Kieran Donoghue, General Manager, Policy, Energy Supply Association of Australia, Proof Committee Hansard, 5 October 2012, p. 8.

[3]        Mr Gregory Everett, Director, Electricity, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 3.

[4]        Mr Timothy Reardon, Executive Director, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 2.

[5]        Mr Gregory Everett, Director, Electricity, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 3.

[6]        Mr Timothy Reardon, Executive Director, National Generators Forum, Proof Committee Hansard, 5 October 2012, p. 4.

[7]        Mr Kieran Donoghue, General Manager, Policy, Energy Supply Association of Australia, Proof Committee Hansard, 5 October 2012, p. 10.

[8]        The Treasury, Submission 6, p. 8.