It was clear that the OTC derivatives market outpaced the regulatory regimes. What has been the global response? The G-20 has taken leadership of the reform of the OTC derivatives with the goals of mitigating systemic risk, improving market transparency and regulatory oversight of OTC derivatives.
The focus areas are standardization, central clearing, shifting all trading to exchanges or electronic platforms and reporting of trades to trade repositories. The FSB is monitoring the implementation of these reforms to ensure consistent and time bound implementation across all G-20 countries. How have we, in India, responded? In India, the OTC derivative markets are relatively small and have developed within a regulated framework.