ESMA has published a report by the OTC Derivatives Regulators Group that comprises the principals of OTC derivatives regulators in the EU, the US, Australia, Japan, Brazil, Hong Kong, Ontario, Quebec, Singapore and Switzerland. These regulators have agreed on ways to approach cross-border issues that arise in relation to OTC derivatives. The principles focus on:  

  • consultation and communication during equivalence or substituted compliance assessments;
  • a flexible, outcome-based approach to such assessments;
  • applying the stricter rule, where one jurisdiction's requirements are higher than another's in respect of application of mandatory trading or clearing;
  • an agreed consultation framework on mandatory clearing determinations;
  • removing barriers on reporting to trade repositories (TRs) and on authorities accessing this data; and
  • appropriate transitional arrangements.

The regulators acknowledge there could be improvements, and will work particularly on authorities' access to registrant information and foreign bank branches and guaranteed subsidiaries. (Source: ESMA Publishes Derivatives Group Report)