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November 22 2012, 4:50PM

New laws prompted by the global financial crisis to govern the trade of over-the-counter derivative instruments on local financial markets have passed federal parliament.

The changes will bring Australia in line with reforms agreed by the Group of 20 (G20) leading nations at a meeting in Pittsburgh in the US in 2009 after the height of the global financial crisis.

The coalition supported the rule changes, intended to address structural deficiencies in OTC derivatives and the risk they pose to wider financial markets and the economy.

It comes after public consultation conducted by the Council of Financial Regulators, which comprises the Reserve Bank of Australia, the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and the Australian Treasury.

OTC derivatives are financial instruments traded between parties such as banks outside of a formal exchange market, with a global worth of $648 trillion.

The Corporations Legislation Amendment (Derivative Transactions) Bill 2012 now awaits Royal Assent.