The UK Chancellor together with the Brazilian, French, Japanese, South African, German, Russian and Swiss Ministers and the European Commission Commissioner for Internal Market and Services have written to the US Treasury Secretary expressing concern at
the lack of progress in developing workable cross-border rules as part of the reforms of the OTC derivatives market. The letter states that there is already evidence of fragmentation as a result of a lack of regulatory coordination. Two core principles are
proposed to counter these problems:
- cross-border rules should be adopted that, if they were replicated by all other jurisdictions, would not result in duplicative or conflicting requirements, or regulatory gaps; and
- substituted compliance or equivalence arrangements should be in place, which can be withheld where regulatory reforms are materially different in outcome.
The need for progress in this area was reiterated in:
- a communique by the G20 Finance Ministers which reported, amongst other things, on the remaining cross-border conflicts, inconsistencies, gaps and duplicative requirements in respect of the OTC derivative markets; and
- a report on by the OTC Derivatives Regulators Group to the G20 Meeting in which the participants of the group agreed to provide one another with information on the:
- timing of implementation of their respective rules, including any transitional periods or time limited relief;
- scope and conditions of substituted compliance, equivalence or recognition regimes; and
- approaches regarding comparability assessments, including the timing for determining such assessments.
RELATED LINKS
Written
http://www.hm-treasury.gov.uk/d/letter_crossborder_otc_derivatives_reform_180413.pdf
Report
http://ec.europa.eu/internal_market/financial-markets/docs/derivatives/130418_odrg-report-g20_en.pdf