Central clearing: Eighteen member countries now have comprehensive standards/criteria for deciding when standardised OTC derivatives should be cleared centrally, and two other jurisdictions introduced mandatory clearing requirements during the reporting period. The Financial Stability Board, the international body that oversees the global financial system, said there are still barriers to authorities` access to trade repositories that limit regulators` ability to make full use of data. The BBS, CPMI, FSB and IOSCO jointly published a final report on incentives for central clearing of OTC derivatives. In addition, the FSB has published reports on the implementation of OTC derivatives reforms and the removal of legal barriers. Coordination and cross-border issues: During the reporting period, one country began to comply with the rules of foreign countries and territories. Several other jurisdictions have extended deference to other jurisdictions. Hiding: Five FSB member countries allow counterparty identifiers to be masked for certain transactions. As reported by jurisdictions, the percentage of hidden transactions is relatively low, typically 5% or less, with several transactions below 1%. “The removal of the legal barriers discussed in this report will not only help to provide comprehensive data to individual RTs and facilitate access to data for individual authorities, but will also be an important step in addressing the legal and regulatory changes that would be necessary to implement a future FSB decision on the possible development of a global mechanism for aggregating trade repository data. which would meet the different needs of public authorities in terms of access to data. ” the report adds. The report identified 13 jurisdictions where there are potential barriers, conditions or a need for additional information on reporting to a trade repository in accordance with national requirements.
“In their responses to the FSB chairman`s letter, one of these jurisdictions (Singapore) reported ongoing measures to remove this barrier, and two jurisdictions (Korea and Mexico) reported on measures being considered,” the FSB added. Progress report on the implementation of OTC derivatives reforms. The Thirteenth Progress Report on the Implementation of OTC Derivatives Reforms notes that satisfactory progress has continued on the overall G20 reform agenda since the 12th Progress Report and continues to assess whether the reforms are achieving their objectives. The report notes that 21 of the FSB`s 24 member countries have comprehensive trade reporting requirements in place, two more than at the end of June 2017. Eighteen member countries now have comprehensive standards/criteria for deciding when standardised OTC derivatives should be centrally cleared, while two other jurisdictions introduced binding clearing requirements during the review period. Sixteen jurisdictions have introduced full margin requirements for non-centrally cleared derivatives, an increase of two jurisdictions. Estimated guarantee rates have increased since the end of 2016. Thirteen jurisdictions have comprehensive standards or scoring criteria in place to determine when products should be traded on the platform.
In six jurisdictions, new rules have entered into force for certain derivatives to be executed on organised trading venues. In addition, the transparency of information on OTC derivatives transactions has increased since the end of 2016. Market participants are already addressing potential security and privacy concerns regarding the obligation to include traders` personal identifiers in transaction reporting under MiFID II, the new financial rules in Europe from 2018. Reporting of transactions Legal hurdles: Follow-up to 2015 peer review recommendations Platform trading: Thirteen jurisdictions have comprehensive standards or evaluation criteria in place to determine when products should be traded through the platform. In six jurisdictions, new regulations have come into force for certain derivatives to be executed on organised trading venues. The transparency of information on OTC derivatives transactions has increased since the end of 2016. Barriers to full trade reporting: All but three FSB member countries have eliminated or eliminated barriers to full trade reporting. Report on measures taken by FSB member countries to remove legal barriers to OTC derivatives reporting.
Mark Carney, Governor of the Bank of England and Chairman of the FSB, wrote to members in March 2016 asking each FSB member court to report by June 2016 on measures planned to remove the legal obstacles identified, and a second progress report was published last week. Another report will be released before the G20 summit in July 2017. Coordination and cross-border issues: Countries and territories reported continued progress, both in the creation of broad legal powers to exercise compliance with the rules of foreign jurisdictions and, in particular, in the exercise of those powers in certain cases. In particular, the EU and the United States (Commodity Futures Trading Commission (CFTC)) have recognised each other`s regulatory regime for trading venues, while Australia, Japan and the United States (CFTC) have recognised one or more jurisdictions for the purposes of their margin requirements. The FSB published a thematic peer review of OTC derivatives reporting in November 2015, identifying a number of remaining legal barriers in FSB member countries, and therefore FSB members agreed to remove these barriers by June 2018. In the context of transaction reporting, the FSB also updated the authorities` use and aggregation of trade repository data: administrations reported increased use of TR data during the reporting period. A few Authorities that had not yet accessed the data have started preliminary work on data quality or have moved from work on data quality analysis to ad hoc manual queries for a range of use cases. Report on the elimination of legal barriers to trade. The report describes the progress made by FSB member countries in implementing the 2015 recommendations on removing or removing legal impediments to the full reporting of OTC derivatives data to trade repositories and to access – by authorities (non-primary domestic authorities and foreign authorities) – to trading data in trade repositories.
Four of these recommendations included implementation dates in 2018, while the other two did not have a specific implementation date. The progress report indicates that all but three FSB member countries have removed or eliminated barriers to full trade data reporting. Five FSB member countries allow counterparty identifiers to be masked for certain transactions. As reported by jurisdictions, the percentage of hidden transactions is relatively low, typically 5% or less, with several transactions below 1%. Twelve jurisdictions have undertaken or are in the process of making changes to remove barriers to access to trade repository data by foreign and/or non-lead authorities, including legal barriers that have only recently been removed.
