On July 3, the European Commission issued a Report which outlines the issues that it believes should be considered in connection with improving the regulatory framework for trading over-the-counter (OTC) derivatives in Europe. Similar to the steps that have been proposed in the United States, the Report recommends that further steps be taken to centralize the collection of information regarding OTC derivatives transactions and to encourage the broader use of standardized contracts, electronic affirmation and confirmation services, and automated payment and collateral management facilities. While the Report advocates the clearing of OTC derivatives, it notes that the issue of whether standardized OTC derivatives should be required to be traded on a regulated trading facility requires further consideration.  

The Commission has requested that market participants provide feedback on the issues discussed in the Report by August 31. The Commission has stated that it will utilize these responses in crafting any legislative proposals that it may make with respect to OTC derivatives before the end of this year.  

A copy of the Report can be found here.