FSB Publishes Reports on Implementation of OTC Derivatives Reforms
BCBS, CPMI, FSB, and IOSCO jointly published final report on incentives to centrally clear over-the-counter (OTC) derivatives. Additionally, FSB published reports on the implementation of OTC derivatives reforms and the removal of legal barriers.
Report on Incentives to Centrally Clear OTC Derivatives. In addition to the report, BCBS, CPMI, FSB, and IOSCO published an overview of responses to the August 2018 consultation on incentives to clear OTC derivatives; this overview document sets out the main changes that have been made in the report to address the comments received. The report states that central clearing of standardized OTC derivatives is a pillar of the G20 leaders' commitment to reform OTC derivatives markets in response to the global financial crisis. A number of post-crisis reforms are, directly or indirectly, relevant to incentives to centrally clear. This report by the Derivatives Assessment Team evaluates how these reforms interact and how they could affect incentives. The report, one of the first two evaluations under the FSB framework for the post-implementation evaluation of the effects of G20 financial regulatory reforms, confirms the findings of the consultative document. The analysis suggests that, overall, the reforms are achieving their goals of promoting central clearing, especially for the most systemic market participants. This is consistent with the goal of reducing complexity and improving transparency and standardization in the OTC derivatives markets. Beyond the systemic core of the derivatives network of central counterparties (CCPs), dealers/clearing service providers and larger, more active clients, the incentives are less strong.
Progress Report on Implementation of OTC Derivatives Reforms. The thirteenth progress report on implementation of OTC derivatives reforms notes that good progress continued to be made across the reform agenda of G20 since the 12th progress report and work to assess whether the reforms meet the objectives intended for them continues. The report mentions that 21 out of 24 FSB member jurisdictions have comprehensive trade reporting requirements in force, up by two since the end of June 2017. Eighteen member jurisdictions now have in force comprehensive standards/criteria for determining when standardized OTC derivatives should be centrally cleared while two more jurisdictions adopted mandatory clearing requirements during the reporting period. Sixteen jurisdictions have implemented comprehensive margin requirements for non-centrally cleared derivatives, representing an increase of two jurisdictions. Estimated collateralization rates have risen since the end of 2016. Thirteen jurisdictions have, in force, the comprehensive assessment standards or criteria for determining when products should be platform traded. New determinations entered into force for specific derivatives products to be executed on organized trading platforms in six jurisdictions. Furthermore, the transparency of information about OTC derivatives transactions has increased since the end of 2016.
Report on Removal of Legal Barriers to Trade Reporting. The report details progress by the FSB member jurisdictions in implementing the 2015 recommendations to remove or address legal barriers to full reporting of OTC derivatives data to trade repositories and to access—by authorities (both domestic non-primary authorities and foreign authorities)—of trade data held in trade repositories. Four of these recommendations included implementation dates in 2018, while the other two did not have specific implementation dates. The progress report finds that all but three of the FSB member jurisdictions have removed or addressed barriers to full trade reporting. Five FSB member jurisdictions allow masking of counterparty identifiers for some transactions. As reported by jurisdictions, the percentage of masked trades is relatively low, typically 5% or under, with several under 1%. In twelve jurisdictions, changes have been made, or are underway, to address or remove barriers to access to trade repository data by foreign authorities and/or non-primary domestic authorities, including legal barriers that have only very recently been removed.
Related Links
- Report on Incentives to Clear OTC Derivatives
- Overview of Responses to Consultation
- Report on Implementation of Derivatives Reforms
- Report on Removal of Legal Barriers
Keywords: International, Banking, Securities, OTC Derivatives, Central Clearing, Regulatory Reforms, Legal Barriers, BCBS, CPMI, FSB, IOSCO
Previous Article
IOSCO Publishes Results of Survey on Commodity Derivatives MarketsRelated Articles
News
APRA Publishes Proposal to Increase Transparency of Banking DataAPRA proposed to substantially increase the volume and breadth of data it makes publicly available on authorized deposit-taking institutions, including banks, credit unions, and building societies.
December 05, 2019
WebPage
Regulatory News
|
News
ESMA Consults on Guide to Internal Controls for Credit Rating AgenciesESMA launched a consultation on the guidelines on internal controls for credit rating agencies (CRAs).
December 05, 2019
WebPage
Regulatory News
|
News
EU Finalizes Directive and Prudential Rules for Investment FirmsEU published, in the Official Journal of the European Union, the Directive (2019/2034) and Regulation (2019/2033) on the prudential requirements and supervision of investment firms.
December 05, 2019
WebPage
Regulatory News
|
News
OSFI Revises Guideline on Principles for Management of Liquidity RiskOSFI finalized Guideline B-6 on the principles for the management of liquidity risk.
December 05, 2019
WebPage
Regulatory News
|
News
PRA Consults on Framework to Manage Outsourcing and Third-Party RiskPRA published a consultation paper CP30/19 that sets out proposals to modernize the regulatory framework on outsourcing and third-party risk management.
December 05, 2019
WebPage
Regulatory News
|
News
BoE, PRA, and FCA Consult to Strengthen Operational ResilienceBoE, PRA, and FCA published a shared policy summary and coordinated consultation papers on new requirements to strengthen operational resilience in the financial services sector.
December 05, 2019
WebPage
Regulatory News
|
News
EC Amends Rule on Mapping of External Credit Assessment InstitutionsEC published the implementing regulation (EU) 2019/2028, which amends Regulation 2016/1799, regarding the mapping tables specifying correspondence between the credit risk assessments of external credit assessment institutions (ECAIs) and the credit quality steps set out in the Capital Requirements Regulation.
December 04, 2019
WebPage
Regulatory News
|
News
EBA Issues Second Part of Advice on Implementation of Basel III in EUEBA published the second part of its advice on the implementation of Basel III in EU, which complements the report published on August 05, 2019.
December 04, 2019
WebPage
Regulatory News
|
News
EU Approves European Council Proposal on CCP Recovery and ResolutionEU ambassadors approved the position of European Council on a proposed framework for clearing houses and their authorities to prepare for and deal with financial difficulties.
December 04, 2019
WebPage
Regulatory News
|
News
OSFI Releases Guideline on Foreign Bank Branch Deposit RequirementsOSFI released the final version of Guideline A-10 on foreign bank branch deposit requirements, along with guideline impact analysis statement.
December 04, 2019
WebPage
Regulatory News
|