United Kingdom (and EU regulation)

OTC Derivatives Market Reforms – 2020 Note on Implementation Progress

On 3 December 2020, the Financial Stability Board (FSB) published a note regarding the progress made in implementing the over-the-counter (OTC) derivatives market reforms.

The key message in the note is that overall implementation of the G20’s OTC derivatives reforms is well advanced, but there has been limited progress since October 2019 across Financial Stability Board (FSB) member jurisdictions. Other points raised in the note include:

Trade reporting requirements for OTC derivatives transactions and interim capital requirements for non-centrally cleared derivatives (NCCDs) are in place in 23 FSB jurisdictions, unchanged since the last progress report. Some jurisdictions report that they have expanded the scope of their trade reporting requirements, reviewed the efficiency of their reporting regime or removed barriers for data sharing.
Platform trading requirements are in force in 13 jurisdictions, unchanged for the second consecutive year. One jurisdiction postponed to 2021 the adoption of final rules, originally planned to be completed during the first half of 2020.
Seventeen FSB jurisdictions already have comprehensive standards for mandatory central clearing requirements, unchanged since the last progress report. One jurisdiction adopted comprehensive standards for determining when products should be centrally cleared, which has not yet come into force. Steps have been taken in many jurisdictions and at the international level to further strengthen the resilience of central counterparties.
One jurisdiction published final standards and a second one launched a public consultation on margin requirements for NCCDs, which are in force in 16 other jurisdictions. All these adopted the one-year extension agreed by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions for the final two implementation phases in light of COVID-19.
Two jurisdictions adopted final capital requirements for NCCDs and one jurisdiction completed implementation since the transition period lapsed. Only eight FSB jurisdictions currently have comprehensive requirements in force.