General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
November 19, 2018

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

Keywords: International, Banking, Securities, OTC Derivatives, Central Clearing, Regulatory Reforms, Legal Barriers, BCBS, CPMI, FSB, IOSCO

Related Articles
News

ECB Updates Validation Checks and List of Identifiers Under AnaCredit

ECB updated the AnaCredit validation checks (Version 1.4) and the list of national identifiers (version 2.4) for AnaCredit reporting.

March 21, 2019 WebPage Regulatory News
News

BCBS Publishes Results of the Basel III Monitoring Exercise

BCBS published results of the Basel III monitoring exercise based on data as of June 30, 2018.

March 20, 2019 WebPage Regulatory News
News

EBA, FCA, and PRA Agree on MoU Template for Supervisory Cooperation

EBA, FCA, and PRA announced that they have agreed on a template for the Memorandum of Understanding (MoU) that sets out the expectations for supervisory cooperation and information-sharing arrangements between UK and EU/European Economic Area national authorities.

March 20, 2019 WebPage Regulatory News
News

EBA Publishes Reports Monitoring the Implementation of Basel III in EU

EBA published two reports measuring the impact of implementing the final Basel III reforms and monitoring the implementation of liquidity measures in EU.

March 20, 2019 WebPage Regulatory News
News

HKMA Publishes CoP on Loss-Absorbing Capacity Requirements of Banks

HKMA issued, in relation to the Financial Institutions Resolution (Loss-Absorbing Capacity Requirements—Banking Sector) Rules (LAC Rules) a chapter of a code of practice (LAC CoP) under section 196 of the Financial Institutions Resolution Ordinance (FIRO).

March 20, 2019 WebPage Regulatory News
News

BCBS Publishes Results of Survey on Proportionality in Bank Regulation

BCBS published a report presenting the results of a survey conducted on proportionality practices in bank regulation and supervision.

March 19, 2019 WebPage Regulatory News
News

US Agencies Adopt Interim Rule to Facilitate Transfers of Legacy Swaps

US Agencies (FCA, FDIC, FED, FHFA, and OCC) are adopting and inviting comments on an interim final rule.

March 19, 2019 WebPage Regulatory News
News

HKMA Expects Banks to Manage Risks Related to Crypto-Asset Exposures

HKMA issued a statement announcing that it expects authorized institutions to take note of the BCBS statement on crypto-assets and its prudential expectations.

March 18, 2019 WebPage Regulatory News
News

SNB Issues Form on Solvency Risk of Counterparties in Interbank Sector

SNB released form (Version 5.00) and related documentation for reporting solvency risk of counterparties in the interbank sector.

March 18, 2019 WebPage Regulatory News
News

EIOPA Requests Data on LTG Measures from Insurers Under Solvency II

EIOPA has requested the European Economic Area insurance undertakings, which are subject to Solvency II, to provide information on the long-term guarantee (LTG) measures.

March 18, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2769