On 19 November 2018, the Financial Stability Board (FSB) published its thirteenth progress report on the implementation of the G20 over-the-counter (OTC) derivatives market reforms. The FSB notes that continued good progress is being made with regards the OTC reforms. Points of interest within the report include:
- trade reporting: twenty-one out of 24 FSB member jurisdictions have comprehensive trade reporting requirements in force, increasing by two during the reporting period (end-June 2017 to end-September 2018); the scope of trade reporting, and availability of trade repositories (TRs) continues to increase;
- central clearing: eighteen FSB member jurisdictions have in force comprehensive standards/criteria for determining when standardised OTC derivatives should be centrally cleared, an increase of one during the reporting period;
- margin requirements for non-centrally cleared derivatives (NCCDs): in the implementation of comprehensive margin requirements for NCCDs, 16 FSB member jurisdictions have such requirements in force, increased by two during the reporting period. Since end 2016, estimates of collateralisation rates for OTC derivatives are more available and also higher overall;
- higher capital requirements for NCCDs: interim higher capital requirements for non-centrally cleared derivatives are in force in 23 of the 24 FSB member jurisdictions, unchanged over the reporting period. However, the number of jurisdictions having implemented the final standardised approach for counterparty credit risk and capital requirements for bank exposures to CCPs, due to have been implemented in January 2017, is much lower;
- platform trading: some progress has been made by FSB member jurisdictions in implementing the platform trading commitment. Transparency of information about OTC derivatives transactions has increased since end-December 2016, mainly through the coming into force of the MiFID II legislative package in the EU; and
- cross border coordination and issues: FSB member jurisdictions reported continuing progress, both in establishing broad legal powers to exercise deference with regard to foreign jurisdictions’ regimes, but more particularly with regard to exercising those powers in particular cases.
The FSB will continue to monitor and report on OTC derivatives reform implementation progress, including the effects of OTC derivatives reforms over time.