FSB Report Examines Implementation of OTC Derivative Reforms
FSB published annual progress report on implementation of the agreed G20 reforms for over-the-counter (OTC) derivatives markets. The report shows limited progress in implementation of OTC derivatives reforms across FSB member jurisdictions since the last progress report, which was published at the end of November 2018. Some progress, focused mainly on the scope of the requirements, took place in jurisdictions where requirements were already in force.
The following are the key highlights of the progress report:
- Trade reporting—The report highlights that 23 out of 24 member jurisdictions have comprehensive requirements in force, representing an increase of one during the recent reporting period. Unless otherwise stated, the “reporting period” referred to in this report is the period from end-November 2018 until end-September 2019. .Jurisdictions report efforts to reduce reporting barriers and mask relief, wider use of the legal entity identifier in trade reporting, and streamlined reporting processes and trade repository operations. Authorities are increasingly aggregating data from multiple trade repositories, supported by ad hoc infrastructure for automated data processing. Work continues at international and national levels to address key challenges in reporting data to, and accessing data from, trade repositories, including international work on data harmonization and efforts to improve the interpretation of the reporting rules.
- Central clearing—The report notes that 18 jurisdictions have in force comprehensive standards/criteria for determining when standardized OTC derivatives should be centrally cleared. In a few of these 18 jurisdictions, a wider range of products is now subject to mandatory clearing. Central counterparties (CCPs) have been active, with some CCPs filing for authorization to clear transactions involving new asset classes in a number of jurisdictions and other CCPs withdrawing from certain market segments. Work is ongoing in international workstreams on enhancing CCP resilience and on certain aspects of CCP resolution.
- Margin requirements—Sixteen jurisdictions have in force comprehensive margin requirements for non-centrally cleared derivatives, which represents an increase of one during the reporting period. Estimates of collateralization rates are available in 10 of these 16 jurisdictions and continue to increase, particularly in credit and equity derivatives.
- Higher capital requirements for non-centrally cleared derivatives—Interim higher capital requirements for non-centrally cleared derivatives are in force in 23 of the 24 FSB member jurisdictions and this has remained unchanged for the last two progress reports. Only seven jurisdictions (albeit four more than at the end of November 2018) have implemented standardized approach for counterparty credit risk (SA-CCR) and capital requirements for bank exposures to CCPs, both due to have been implemented by January 2017.
- Platform trading—Comprehensive platform trading requirements are in force in 13 jurisdictions, a number which has remained unchanged during the reporting period. In these jurisdictions, limited progress occurred during the reporting period in the scope of products subject to a trading obligation and in the scope of requirements for trading venues.
- Cross-border coordination and issues—One jurisdiction started exercising deference during the reporting period with regard to foreign jurisdictions’ regimes. Several other jurisdictions that already exercised deference in the past extended such exercise to further jurisdictions. New international work that has been launched during the reporting period may help with further progress in this area.
Related Links
Keywords: International, Banking, Securities, OTC Derivatives, Central Clearing, Regulatory Reforms, Margin Requirements, CCPs, SA-CCR, FSB
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
IOSCO Publishes Report on the Fourth Hedge Fund SurveyRelated Articles
NGFS Updates Address Short-Term Climate Scenarios and Transition Plans
The Network for Greening the Financial System (NGFS) is exploring the development of short-term climate scenarios to complement its existing scenario framework of long-term climate scenarios.
ISSB Updates Address ESG Issues while IASB Consults on Impairments
The International Sustainability Standards Board (ISSB) is seeking feedback, until August 09, 2023, on the exposure draft that sets out the methodology proposed by ISSB to amend the Sustainability Accounting Standards Board (SASB) Standards' metrics
OSFI to Review Liquidity Adequacy Guidelines and Policy Architecture
The Office of the Superintendent of Financial Institutions (OSFI) is consulting, until June 21, 2023, on a review of the liquidity treatment provided in the Liquidity Adequacy Requirements (LAR) Guideline for wholesale funding sources with retail-like characteristics.
ESRB Publishes Report on Cryptos and DeFi; ECB Updates on Digital Euro
The European Systemic Risk Board (ESRB) published a report that outlines the systemic implications of crypto markets and proposes policy options to address the risks stemming from crypto-assets and decentralized finance or DeFi.
EU Agencies Issue Updates on DORA, ESAP, and Crowdfunding Regulation
The European Supervisory Authorities (ESAs) published a discussion paper on their joint advice to the European Commission (EC) on proposals to specify criteria for critical information and communication technology (ICT) third-party service providers
ESAs Propose ESG Disclosure on STS Securitization, Issue Other Updates
The Joint Committee of the three European Supervisory Authorities (ESAs) proposed to amend the Implementing Regulation 2016/1799 on the mapping of External Credit Assessment Institutions' (ECAIs) credit assessments.
UK Authorities Issue Updates, Finalize Policy on Model Risk Management
The Prudential Regulation Authority (PRA) finalized the model risk management principles for banks, the policy statement PS5/23 on risks from contingent leverage, and PS4/23 on moving senior managers regime forms from the PRA Rulebook.
APRA Revises Implementation Timeline for Operational Risk Standard
The Australian Prudential Regulation Authority (APRA) updated the implementation date of the new cross-industry prudential standard CPS 230 on operational risk management
BCBS Consults on Basel FAQs and Amendments, Issues Other Updates
The Basel Committee on Banking Supervision (BCBS) published a report assessing implementation of the global Basel standards on net stable funding ratio (NSFR) and large exposures (LEX) in South Africa
EBA Announces Multiple Regulatory and Reporting Updates in April 2023
The European Banking Authority (EBA) published consultations on the amendments to the guidelines on risk-based anti-money laundering and countering the financing of terrorism (AML/CFT) supervision