IOSCO Re-Analyzes Incentives To Centrally Clear Swaps

The Financial Stability Board, the Basel Committee on Banking Supervision, the Committee on Payments and Market Infrastructures and IOSCO re-examined whether adequate incentives to clear centrally over-the-counter ("OTC") derivatives are in place. The first assessment of incentives to centrally clear OTC derivatives was published in 2014.

In the new Consultation Report, the international standard-setting bodies found, among other things, that:

• changes in OTC derivatives markets are consistent with the G20 objectives to promote central clearing;
• post-crisis reforms – in particular, capital, margin and clearing – have incentivized "dealers and larger and more active clients" to clear derivatives;