FSB publishes report on implementation of OTC derivatives

The Financial Stability Board (FSB) has published its seventh detailed progress report on the implementation of OTC derivatives market reforms. The report observes that significant progress has been made in fulfilling the G20 commitments through global policy development, adoption of legislation and expanded use of market infrastructure.

In respect of trade reporting 15 (of 19) FSB member jurisdictions have trade reporting requirements in effect for one or more product or participant types, although specific reporting requirements currently vary across jurisdictions.  By end 2014 all but three jurisdictions are expected to have trade reporting requirements in effect.  The FSB reports that authorities continue to face challenges regarding the usability of and access to data held by Trade Repositories and stresses the importance of greater standardisation in transaction reporting.

The report sets out:

• the progress in jurisdictional and market reform implementation:
• implementation issues and market developments in meeting reform objectives;
• progress in international work streams to support effective reforms; and
• the timetables (by jurisdiction) for implementation of the different commitments in the annexes.

 The report also discusses areas where further work is needed to complete the reforms and achieve the G20 objectives, including for Authorities to:

• put in place their remaining legislation and regulation promptly and in a form flexible enough to respond to issues of cross-border consistency and other issues that may arise;
• provide clarity on their processes for making equivalency or comparability decisions (including whether additional authority may be needed to defer to other jurisdictions' regimes, where appropriate) - the FSB will report to the G20 by September on jurisdictions' frameworks in this regard; and
• continue to closely coordinate and cooperate as needed to promptly seek to resolve cross-border regulatory issues when they are identified.

The FSB will continue to monitor jurisdictions' implementation of the OTC derivatives reform programme, as well as the extent to which the implemented reforms meet the G20's underlying goals of improving transparency, mitigating systemic risk, and protecting against market abuse.  The FSB will publish its next progress report ahead of the November G20 Leaders' Summit.

Related link:

http://www.financialstabilityboard.org/publications/r_140408.htm