FSB seeks industry response on legal barriers to OTC derivatives
27 March 2018 London
Image: Shutterstock
The Financial Stability Board (FSB) is seeking responses from financial institutions and other reporting entities on issues they may face with legal barriers to the reporting of full transaction information about over-the-counter (OTC) derivatives.
The FSB explained that the requested responses will provide input to the board’s ongoing work to evaluate the extent to which its member jurisdictions have met their commitments to remove such legal barriers.
The barriers can arise from client confidentiality, data protection, blocking statutes, or other official requirements, either in FSB member jurisdictions or other jurisdictions where counterparties may be located.
In 2009, the G20 agreed a comprehensive reform agenda for OTC derivatives markets.
The agreed reforms included trade reporting of OTC derivatives; central clearing and, where appropriate, exchange or electronic platform trading of standardised OTC derivatives and higher capital and minimum margin requirements for non-centrally cleared derivatives.
The survey comes after some FSB members raised concerns that restrictions on reporting complete OTC derivatives transaction information to trade repositories can limit its usefulness to authorities in carrying out their regulatory mandates—including monitoring and analysing systemic risk and market activity.
The FSB published a thematic peer review of OTC derivative trade reporting in November 2015, which identified a number of legal barriers to reporting of transactions.
FSB members agreed as a follow up that, by June 2018, all jurisdictions should remove barriers to reporting of full transaction information and have a legal framework in place to permit authorities’ access to data in accordance with their mandates and in accordance with the domestic regulatory regime.
The FSB will report on the findings from its evaluation to the November-December G20 Summit in Buenos Aires.
The FSB explained that the requested responses will provide input to the board’s ongoing work to evaluate the extent to which its member jurisdictions have met their commitments to remove such legal barriers.
The barriers can arise from client confidentiality, data protection, blocking statutes, or other official requirements, either in FSB member jurisdictions or other jurisdictions where counterparties may be located.
In 2009, the G20 agreed a comprehensive reform agenda for OTC derivatives markets.
The agreed reforms included trade reporting of OTC derivatives; central clearing and, where appropriate, exchange or electronic platform trading of standardised OTC derivatives and higher capital and minimum margin requirements for non-centrally cleared derivatives.
The survey comes after some FSB members raised concerns that restrictions on reporting complete OTC derivatives transaction information to trade repositories can limit its usefulness to authorities in carrying out their regulatory mandates—including monitoring and analysing systemic risk and market activity.
The FSB published a thematic peer review of OTC derivative trade reporting in November 2015, which identified a number of legal barriers to reporting of transactions.
FSB members agreed as a follow up that, by June 2018, all jurisdictions should remove barriers to reporting of full transaction information and have a legal framework in place to permit authorities’ access to data in accordance with their mandates and in accordance with the domestic regulatory regime.
The FSB will report on the findings from its evaluation to the November-December G20 Summit in Buenos Aires.
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