In its report, released on Friday, the organisation
reported concerns in almost every aspect of the reforms due to
the pace of implementation and interpretation of the
requirements across G-20 nations.
The organisation, which was founded in 2009 to
oversee the global financial system, was reporting on the
results of a questionnaire it sent out to all G-20 nations to
ascertain progress on the recommendations it in October.
The review found that, while some countries, such
as Japan and the United States, had legislation in place to
enact reform, other countries were still at the market analysis
"There are a number of jurisdictions that have not
yet taken threshold decisions regarding the shape of the
regulatory framework for their respective markets," the report
said. "The FSB notes its concern regarding many jurisdictions
likelihood of meeting the G-20 end-2012 deadline."
The FSB highlighted concerns over the
implementation of central clearing and potential inefficiencies
in access to CCPs. "Ensuring fair and open access to CCPs,
subject to sound risk management, is essential for the
[reforms] to be achieved," it said.
Interpretations of the requirements for exchange or
electronic platform trading also varied according to the
Argentina and Brazil said that they were not
undertaking regulatory initiatives to promote exchange and
electronic platform trading due to the high level of
derivatives already traded on organised platforms.
Meanwhile, India has indicated that it will not
enforce electronic platform trading of OTC IR derivatives as it
believes that mandatory reporting through a central trade
reporting platform coupled with central clearing will "provide
the benefits of exchange trading while retaining the
flexibility of OTC transaction".
The FSB also indicated concerns over the
establishment of Trade Repositories, which will record details
of derivatives trades. The establishment of TRs is intended to
allow regulators easy access to market data. However, according
to the FSB, regional variations and various legal issues in
different jurisdictions could result in an incomplete
The report will exacerbate fears of the potential
for traders to take advantage of regulatory arbitrage in the
wake of the implantation of the G-20 reforms.