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19 March 2013

FT: Derivatives sector urges wider IOSCO role

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The heads of some of the world's largest derivative trade associations have urged the body for global securities regulators to help resolve the controversial issue of cross-border application of derivatives rules.

Chief executives of the Futures and Options Association and the Futures Industry Association, the International Swaps and Derivatives Association and the Swiss Bankers Association called on the International Organisation of Securities Commissions (IOSCO) to take the lead in the reform of derivatives markets at its annual meeting this month. The umbrella body for the world’s securities regulators had no supervisory responsibilities, nor a regulatory position to defend, they argued.

Implementation of policies agreed by global leaders to safeguard derivatives markets in the wake of the financial crisis have been delayed by differences between regulators over their jurisdiction. Authorities have warned the planned US reforms in particular could sweep up overseas financial institutions, forcing them to comply with two sets of overlapping and conflicting regulations.

The letter said the objective to “reject protectionism and not turn inward” was “being progressively undermined” by regulatory extraterritoriality and the differences in national implementation of global standards.

The executives warned that the result was not only greater confusion and complexity for customers but it clashed with the public policy objective of fast-tracking post-crisis economic and business recovery.

Full article (FT subscription required)

© Financial Times

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