(Reuters) - Asian countries may struggle to implement rules on derivative clearing and trade data warehouses by the deadline set by the world's top 20 economies (G20), according to the International Swaps and Derivatives Association (ISDA).
Asian members of the G20 have committed to establish central clearing services for over-the-counter (OTC) derivatives and systems to store trading data by the end of 2012.
However there is a growing recognition among financial supervisors that meeting that deadline is going to be tough given the slow progress made on the issue by the European Union and U.S., ISDA said after hosting a closed door meeting of Asian regulators in Hong Kong late last week.
Asian economies have much smaller derivative markets than those in America and Europe, so regulators have been waiting for changes in those regions to be decided before finalising their own arrangements.
"The U.S. and EU situations are still fluid so Asian regulators who are hoping to harmonise to these regulations need to wait for that process to finish to adjust their own regulatory regimes," Keith Noyes, ISDA's Asia Pacific regional director told Reuters.
"If they wait for that moment, it may be impossible for them to meet the deadline to set up appropriate CCP (central counter-party clearing) or trade repository infrastructure," he added.
New rules on clearing and trade data are intended to try and prevent the chaos that ensued after Lehman Brothers collapsed in 2008, when regulators and banks struggled to unwind thousands of derivative trades linked to the stricken institution.
ISDA's executive vice chairman Robert Pickel added that regulators in Asia are now also taking more steps to examine how new rules in the U.S. and Europe which may give western regulators more control over Asian banks.
Supervisors in the region have been growing increasingly concerned that U.S. regulators in particular may be able to call the shots over the trading books and capital levels of Asian banks with American operations.
"We heard several are visiting Washington or talking to Washington and Brussels," Pickel said.
"The extra-territorial issue is a concern and it is only going to be resolved through some effective dialogue between regulators so they are trying to engage in that dialogue," he added.
Source: http://www.reuters.com
Asian members of the G20 have committed to establish central clearing services for over-the-counter (OTC) derivatives and systems to store trading data by the end of 2012.
However there is a growing recognition among financial supervisors that meeting that deadline is going to be tough given the slow progress made on the issue by the European Union and U.S., ISDA said after hosting a closed door meeting of Asian regulators in Hong Kong late last week.
Asian economies have much smaller derivative markets than those in America and Europe, so regulators have been waiting for changes in those regions to be decided before finalising their own arrangements.
"The U.S. and EU situations are still fluid so Asian regulators who are hoping to harmonise to these regulations need to wait for that process to finish to adjust their own regulatory regimes," Keith Noyes, ISDA's Asia Pacific regional director told Reuters.
"If they wait for that moment, it may be impossible for them to meet the deadline to set up appropriate CCP (central counter-party clearing) or trade repository infrastructure," he added.
New rules on clearing and trade data are intended to try and prevent the chaos that ensued after Lehman Brothers collapsed in 2008, when regulators and banks struggled to unwind thousands of derivative trades linked to the stricken institution.
ISDA's executive vice chairman Robert Pickel added that regulators in Asia are now also taking more steps to examine how new rules in the U.S. and Europe which may give western regulators more control over Asian banks.
Supervisors in the region have been growing increasingly concerned that U.S. regulators in particular may be able to call the shots over the trading books and capital levels of Asian banks with American operations.
"We heard several are visiting Washington or talking to Washington and Brussels," Pickel said.
"The extra-territorial issue is a concern and it is only going to be resolved through some effective dialogue between regulators so they are trying to engage in that dialogue," he added.
Source: http://www.reuters.com
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