FSA has published its plans for regulating markets in the current climate of change. It identifies the following drivers for change:
- growing internationalisation of markets;
- the need for decisive response to the crisis;
- growth of competition in trading and clearing;
- technological developments;
- the need to maintain or improve market quality; and
- changes to the European regulatory structure.
In this context, FSA's priorities are to:
- reform OTC derivatives markets to reduce systemic risk – this will include greater use of clearing and strengthening risk management of non-cleared trades;
- increase use of trade repositories to ensure better transparency of OTC markets;
- engage in the international move to global standards for clearing houses and how to deal with the "single point of failure" risk;
- work towards getting the MiFID Review to make competition more consistent between trading venues, improve post-trade transparency data in equity markets and support transparency requirements for major non-equity markets (such as corporate bond, CDS, structured finance and other derivatives);
- understand and mitigate the risks of evolving markets;
- work towards a pan-European short selling disclosure regime;
- carry on its policy of credible deterrence against insider dealing and market manipulation;
- work with international regulators to meet the Pittsburgh remit for enhancing transparency in oil derivatives markets; and
- work with the EU on implementing the CRA regime and working with ESMA. FSA believes national authorities should still play a major role in supervising CRAs.
FSA plans a paper later this year on wider issues.