The International Organization of Securities Commissions (IOSCO) and the Committee on Payment and Settlement Systems (CPSS) have issued two consultative reports containing proposals aimed at strengthening the over-the-counter (OTC) derivatives market.
The first report is entitled Guidance on the application of the 2004 CPSS-IOSCO Recommendations for Central Counterparties to OTC derivatives CCPs.
Because of the complex risk characteristics and market design of OTC derivatives products, clearing them safely and efficiently through a central counterparty (CCP) presents unique challenges that clearing listed or cash-market products may not. These aspects were not fully discussed in the 2004 CPSS-IOSCO Recommendations for Central Counterparties (the 2004 Recommendations).
A working group established by IOSCO and CPSS in June 2009 has reviewed the 2004 Recommendations in light of these experiences and identified key new issues that arise when a CCP provides clearing services for OTC derivatives. The working group has produced this report with the aim of promoting consistent interpretation, understanding and implementation of the 2004 Recommendations across arrangements for OTC derivatives transactions. The deadline for comments on the report is 25 June 2010.
The second report is entitled Considerations for trade repositories in OTC derivatives markets.
In this report the IOSCO-CPSS working group set out a number of factors that should be considered by trade repositories in designing and operating their services and by the relevant authorities in regulating and overseeing trade repositories. The deadline for comments on the report is also 25 June 2010.
The two consultation reports are complementary and, taken together, constitute an important part of the responses of IOSCO and the CPSS to the recommendations of the G20 that called for the strengthening of the robustness of the OTC derivatives market.
View Considerations for trade repositories in OTC derivatives markets, 12 May 2010