Report

OTC derivatives regulators issue report to G20

The Over-the-Counter (OTC) Derivatives Regulators Group (ODRG) has issued a report that identifies the current list of remaining cross-border implementation issues related to global reform of OTC derivatives markets.

The ODRG is made up of authorities with responsibility for the regulation of OTC derivatives markets in Australia, Brazil, the European Union, Hong Kong, Japan, Ontario, Quebec, Singapore, Switzerland, and the US.
 
The report also includes a summary of the status of such issues and a timetable for addressing them through a series of reports to the G20 Finance Ministers and Central Bank Governors over the course of 2014.
 
The initial report to the G20 addresses cross-border issues the ODRG is working on to develop approaches to address, namely, the treatment of branches and affiliates and the implementation of the trading commitment through organised trading platforms. The report also addresses how ODRG members are working to implement understandings reached in the areas of equivalence and substituted compliance, clearing determinations, margin requirements for non-centrally cleared derivatives transactions, and access to trade repository data.
 
The report also notes that ODRG is monitoring cross-border issues with respect to risk mitigation techniques for non-centrally cleared OTC derivatives transactions, access to registrants’ books and records, and barriers to reporting to trade repositories.
 
Finally, the ODRG notes bilateral progress in two areas: finding solutions to address timing differences in the implementation of trading frameworks and developing mechanisms to enhance cooperation and information-sharing.
 
Specifically, the report points to the February 2014 announcement by the Commodity Futures Trading Commission acting chairman Mark Wetjen and European Commissioner Michel Barnier that the CFTC and European Commission staffs had made significant progress toward harmonising the regulatory frameworks for trading platforms in the two jurisdictions, through the CFTC issuing no-action letters.
 
The report also highlights recent information-sharing arrangements executed by the CFTC with Singapore, Japan, and four Canadian provinces.

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