The TMX Group Inc. issued a paper today providing its unique perspective on issues deriving from the financial crisis and discussing how the core competencies of a combined regulated exchange and clearing house are designed to meet G-20 objectives respecting improving over-the-counter (OTC) derivatives markets. The TMX Group has obviously given considerable thought on how Canada should respond to prevent similar crises from recurring, in particular with respect to the operation of less-regulated OTC derivatives markets.
Specifically, TMX Group discussed how its core competencies respecting trading, clearing, data warehousing and regulatory services can be mapped onto G-20 requirements, which include strengthening prudential oversight, improving risk management, increasing transparency, promoting market integrity, protecting against market abuse, mitigating systemic risk and reinforcing international cooperation. TMX Group also stated that its core competencies achieve the business requirements of market participants. As such, the paper recommended that Canadian regulators utilize domestic facilities with international linkages to provide the regulatory oversight of OTC derivatives markets.