The International Organization of Securities Commissions (IOSCO) has published its final report on the risk mitigation standards market participants should adopt when trading in non-centrally cleared derivatives.
Of the nine standards set forth by the IOSCO working group, they include trading relationship documentation, trade confirmation procedures, valuation, portfolio reconciliation, portfolio compression, and dispute resolution processes.
Furthermore it states regulatory regimes should interact to minimize inconsistencies across jurisdictions, and encourages firms to adopt these standards as soon as possible.
IOSCO and the Basel Committee on Banking Supervision (BCBS), in September 2013, jointly recommended a phased implementation of collateral requirements for derivatives traded outside of clearing houses from December 1, 2015.
“The risk mitigation standards, along with the margin requirements, will help market participants better manage risks in transacting in non-centrally cleared OTC derivatives and improve the resilience of the non-centrally cleared OTC derivatives market,” says Lee Boon Ngiap, chair of the IOSCO Working Group on risk mitigation standards for non-centrally cleared derivatives.
IOSCO Publishes Risk Standard for Uncleared Derivatives
The International Organization of Securities Commissions (IOSCO) has published its final report on the risk mitigation standards market participants should adopt when trading in non-centrally cleared derivatives.