Shearman & Sterling LLP | FinReg | Financial Stability Board Publishes Report on Progress of Over-The-Counter Derivatives Market Reforms
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  • Financial Stability Board Publishes Report on Progress of Over-The-Counter Derivatives Market Reforms
    10/15/2019
    The Financial Stability Board has published a report on the progress its member jurisdictions have made in implementing the agreed G20 reforms to over-the-counter derivatives markets in 2018. The report finds that good progress has been made in implementation of the agenda. In particular, it highlights the following areas:
     
    • Trade reporting: 21 out of 24 member jurisdictions now have comprehensive trade reporting requirements in force; only Argentina, South Africa and Turkey remain to establish equivalent requirements; work on data harmonization and removal of legal barriers to reporting and access to trade repository-held data continues at international and national levels;
    • Central clearing: 18 out of 24 member jurisdictions have comprehensive standards for determining when OTC derivatives should be centrally cleared; work on CCP resilience, recovery and resolution continues to be undertaken at an international level, including the framework for supervisory stress testing of CCPs published by the Committee on Payments and Market Infrastructures and International Organization for Securities Commissions;
    • Margin requirements for non-centrally cleared derivatives: 16 out of 24 member jurisdictions have comprehensive margin requirements for uncleared derivatives in force, based on the standards for exchange of initial and variation margin established by the Basel Committee and IOSCO in 2015;
    • Higher capital requirements for uncleared derivatives: 23 out of 24 member jurisdictions have implemented interim higher capital requirements for non-centrally cleared derivatives; this figure does not represent an increase since the previous FSB reporting period and only some jurisdictions have implemented the final standardized approach for counterparty credit risk and capital requirements for bank exposures to CCPs;
    • Platform trading: 13 out of 24 jurisdictions now have comprehensive assessment standards for determining when products should be platform traded and the introduction of the EU Markets in Financial Instruments Directive II has contributed to an increase in the transparency of information available about OTC derivatives transactions; and
    • Cross-border coordination and issues: progress has been made in the establishment of legal powers to exercise deference with regard to foreign jurisdictions’ regimes; in particular, the EU and U.S. recognized each other’s regulatory regime for trading venues.

    View the FSB's 2018 Progress Report.

    View details of the CPMI and IOSCO's Framework for supervisory stress testing of CCPs.

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