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Derivatives bodies urge caution ahead of regulatory crackdown
REPRESENTATIVES of the derivatives industry have urged the European Union to water down its plans to standardise and centrally clear over-the-counter contracts.
A group of three industry bodies told the European Commission (EC) that “initiatives that would seek to standardise the terms of all OTC contracts are counterproductive”.
The trio, comprising the International Swaps and Derivatives Association, the Securities Industry and Financial Markets Association and the London Investment Banking Association, were responding to the Commission’s plans to tighten up regulation of the derivatives market.
The EC wants to encourage more central clearing of trades and establish central data stores to collate data on transactions and positions held.