Second Treasury Report Issued: Implications For Derivatives Market

Introduction

On October 6 2017 the US Department of the Treasury released its second in a series of four reports (Capital Markets Report)¹ evaluating the US financial regulatory system.² This report follows on the heels of Treasury's first report on the US banking system³ and addresses the US capital markets, including debt, equity, commodities and derivatives markets, central clearing and supervision of financial market utilities.

This update focuses on the recommendations relating to the derivatives markets.⁴ In many cases, these recommendations reflect concerns identified by market participants in recent years, but do not propose fundamental changes in the overall post-Dodd-Frank Act derivatives regulatory structure. Most of the recommendations could be implemented through agency rulemaking, although a few would require congressional approval. The report also emphasises reconsideration of certain existing rulemakings in order to streamline regulation, generally