On August 26, 2016, the FSB published its eleventh progress report on the implementation of reforms by standard-setting bodies, national and regional authorities and market participants to the OTC derivatives market as agreed by the G20. Such reforms include the trade reporting of OTC derivatives, central clearing of standardized OTC derivatives and higher capital and minimum margin requirements for non-centrally cleared derivatives. The FSB concluded that the progress of implementing reforms is continuing, but that regulators have noted challenges to implementation.
On trade reporting, 19 out of 24 FSB members complied with the requirements covering 90% of derivatives as at June 30, 2016, with 23 members expecting to have such requirements in force by the end of 2017. The FSB commented that work is progressing on the removal of legal barriers to OTC derivatives trading. With regard to central clearing, the FSB noted that a majority of its members had a framework in force for determining when standardized OTC derivatives should be centrally cleared that covers 90% of OTC derivative transactions. Capital requirements for non-centrally cleared derivatives have largely been enforced, but less progress has been made on margin requirements. The FSB commented that around half of their member jurisdictions do not appear to be on track to have implemented variation margin requirements in accordance with the second and final phase requirements, which are due by March 2017. 11 jurisdictions have implemented frameworks for determining mandatory platform requirements. A further progress report is to be published by the FSB prior to the G20 Summit in July 2017.
The report is available at: http://www.fsb.org/wp-content/uploads/OTC-Derivatives-Market-Reforms-Eleventh-ProgressReport.pdf.