EU proposes new rules to regulate derivatives market

22:34, September 15, 2010      

Email | Print | Subscribe | Comments | Forum 

The European Commission on Wednesday proposed new rules to increase transparency and strengthen the regulation of the derivatives market.

According to the proposal, information on over-the-counter (OTC) derivative contracts should be reported to trade repositories and be accessible to supervisory authorities.

The reporting of OTC derivatives, which are privately negotiated between two counterparts, is currently not mandatory.

The proposal said that the new European Securities and Markets Authority (ESMA) will be responsible for the surveillance of trade repositories and for granting and withdrawing their registration.

Another measure suggested by the Commission is to request standard OTC derivatives contracts be cleared through central counterparties (CCPs), which are entities between the two counterparties to a transaction.

The commission said that CCPs will prevent the situation where a collapse of one market participant causes the collapse of other market participants and put the whole financial system at risk.

"No financial market can afford to remain a Wild West territory. The absence of any regulatory framework for OTC derivatives contributed to the financial crisis and the tremendous consequences we are all suffering from," said Michel Barnier, the European Commissioner for Internal Market and Services.

"So we know who is doing what, and who owes what to whom, as well as taking action so that single failures do not destabilize the whole financial system," he said.

Barnier said the proposal will be presented to the European Parliament and the EU member states for discussion. Once adopted, it will come into force from the end of 2012.

Source: Xinhua


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Photo taken on Sept. 29, 2011 shows a cargo ship in danger on the sea near Zhuhai City, south China's Guangdong Province. Cargo ship Fangzhou 6 of Qingzhou of southwest China's Guangxi Zhuang Autonomous Region lost control after water stormed into its cabin due to Typhoon Nesat on the sea near Zhuhai Thursday, leaving 12 crew members in danger. Rescuers rushed to the ship and saved them by using a helicopter. (Xinhua)
  • Actress Gong Li poses for L'Officiel Magazine. (Xinhua Photo)
  • Demonstrators from the Occupy Wall Street campaign hold placards as they march in the financial district of New York September 29, 2011. After hundreds of protesters were denied access to some areas outside the New York Stock Exchange on September 17, demonstrators set up a rag-tag camp three blocks away. Zuccotti Park is a campground festooned with placards and anti-Wall Street slogans. The group is adding complaints of excessive police force against protesters and police treatment of ethnic minorities and Muslims to its grievances list, which includes bank bailouts, foreclosures and high unemployment. (Xinhua/Reuters Photo)
  • The romantic myth of the Aegean 
The Aegean Sea is between the Greece Peninsula and Asia Minor Peninsula, dotted with many beautiful scenery islands, like a paradise on earth.  The ancient city of Troy in the east coast of Aegean, Turkey, and Mycenaean sites in the west bank of Greece, which have been archaeological discoveries, now are the must visit places in journey of the Aegean Sea. Above, these desolate dilapidated stone, the sunny blue sky and white clouds and vessels roaming at sea, arriving and departing travellers, add more romantic to the sea and the islands.
  • Chinese Permanent Representative to the United Nations Li Baodong (R) welcomes UN Secretary-General Ban Ki-moon in New York, the United States. Sept. 29, 2011. The Chinese permanent delegation to the UN held a reception on Thursday to celebrate the 62nd anniversary of the founding of the People's Republic of China and the 40th anniversary of China's returning to the UN. (Xinhua/Shen Hong)
  • Chinese ambassador to Bulgaria Guo Yezhou delivers a speech during the reception in Sofia, capital of Bulgaria, on Sept. 29, 2011. The Chinese Embassy in Bulgaria held a grand reception here on Thursday to celebrate the 62nd anniversary of the founding of the People's Republic of China. (Xinhua/Wang Meng)
Hot Forum Discussion