31 March 2014

Report of the OTC Derivatives Regulators Group on cross-border implementation issues

As part of the ODRG’s continuing work to address OTC derivatives cross-border implementation issues, the ODRG will produce a series of reports to the G20 over the course of 2014. This initial report identifies the current list of remaining crossborder implementation issues, a summary of their status, and a timetable for addressing them.

The ODRG is working to develop approaches to address the following crossborder issues:

1. Treatment of branches and affiliates
   
   The ODRG continues to work on identifying possible gaps and duplicative requirements in the treatment of foreign branches and affiliates and continues to explore potential solutions for those cases. In its analysis of the treatment of branches and affiliates, the ODRG is considering the clearing obligation and potentially other areas.
    
2. Organised trading platforms and implementation of trading commitment
   
   The ODRG is assessing the circumstances under which registration of foreign organised trading platforms, for purposes of derivatives trading and trading obligations, is required by authorities, and identifying possible approaches to the application of substituted compliance or equivalence to organised trading platforms. In addition, the ODRG is considering differences across jurisdictions in timing and approach to implementation of trading obligations. 

ODRG members are working to implement understandings reached to address the following cross-border issues:

1. Equivalence and substituted compliance
2. Clearing determinations
3. Risk mitigation techniques for non-centrally cleared derivatives transactions (margin)
4. Data in Trade Repositories

The ODRG is monitoring the following cross-border issues identified by the ODRG as appropriate for other fora or bilateral engagement:

1. Risk mitigation techniques for non-centrally cleared derivatives transactions (non-margin)
2. Access to registrant’s books and records
3. Barriers to reporting to trade repositories

Full report

As reported by Automated Trader, specifically, the report points to the February 2014 announcement by the Commodity Futures Trading Commission Acting Chairman Mark Wetjen and European Commissioner Michel Barnier that the CFTC and European Commission staffs had made significant progress toward harmonising the regulatory frameworks for trading platforms in the two jurisdictions, through the CFTC issuing no-action letters. The report also highlights recent information-sharing arrangements executed by the CFTC with Singapore, Japan, and four Canadian provinces.

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