ISDA recommended ways in which policymakers can
reduce "fragmentation" in global derivatives markets.
ISDA recommended, among other things, that regulators:
- minimize the gaps between globally
agreed-upon standards and national requirements;
- institute global standards "when
and where appropriate" for smaller jurisdictions or for those
with "limited market activity," while permitting market
participants from larger jurisdictions to engage in de
minimis activity in these jurisdictions; and
- establish a risk-based framework
"for the evaluation and recognition of the comparability of
derivatives regulatory regimes."
In addition, ISDA urged international standards-setting bodies
(i.e., the Financial Stability Board, IOSCO, the Committee
on Payments and Market Infrastructure and the Basel Committee on
Banking Supervision) to come up with a common process for
regulators to use in implementing equivalence and substituted
compliance in a predictable and consistent
