FSB: OTC Derivatives Market Reforms - Fourth Progress Report on Implementation

31 October 2012

This fourth progress report complements earlier reports by focusing on the readiness of market infrastructure - central counterparties (CCPs), trade repositories (TRs) and organised trading platforms (i.e. exchanges and electronic trading platforms) – as the end-2012 deadline approaches.

The report also includes a brief update on progress in international policy, national legislation and regulation, and the status of implementation of the four safeguards for a resilient and efficient global framework for central clearing.

The key messages of this report are as follows:

• Market infrastructure is in place and can be scaled up. The development of market infrastructure does not appear to be an impediment to further progress in meeting the G20 commitments for OTC derivatives trading, central clearing and reporting (although regulators should take into account the start-up time for infrastructure to expand their activities and receive regulatory approvals).
• The international policy work on the four safeguards for global clearing is substantially completed and implementation is proceeding at a national level. Sufficient progress on the safeguards has therefore been made to enable all jurisdictions without delay to decide, and put in place, their regulatory approach to central clearing.
• Regulatory uncertainty remains the most significant impediment to further progress and to comprehensive use of market infrastructure. Jurisdictions should put in place their legislation and regulation promptly and in a form flexible enough to respond to cross-border consistency and other issues that may arise. Regulators need to act by end-2012 to identify conflicts, inconsistencies and gaps in their respective national frameworks, including in the cross-border application of rules. They need to work together quickly to address the identified issues.

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