The FSB has reported to G20 Finance Ministers and Central Bank Governors on approaches and authority to defer to another jurisdiction’s supervision and oversight of OTC derivatives market participants and infrastructure providers.
Jurisdictions more frequently report having a framework for deference in place with respect to infrastructure providers than with respect to market participants. Overall, deference for market participants is more commonly focused on specific transaction-level requirements (e.g. the deference provides relief from specific reporting, clearing or trade execution requirements) than on entity-level requirements (e.g. relief from supervision and/or oversight) even though the home country may be relied upon in some part for day-to-day supervision and oversight. Two jurisdictions report that they currently use deference standards and process for market participants that are similar to that used for market infrastructure (Australia and the US (CFTC)).
In some instances, deference frameworks for market participants have yet to be fully developed, but will follow those in place or being developed for OTCD market infrastructure (Hong Kong, Japan, Singapore). Some other jurisdictions did not specify an approach for making deference determinations for market participants. This sequencing of decision-making in developing deference frameworks may reflect the sequencing of implementation of OTCD reforms in jurisdictions, where registration of infrastructure is often in place before transaction-level requirements come into force.
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