Reforms to the over-the-counter (OTC) derivatives markets to address vulnerabilities revealed by the financial crisis remain a work in progress, reports the Financial Stability Board (FSB).

The FSB published its latest progress report on the implementation of OTC derivatives market reforms, which aim to improve transparency, mitigate systemic risk and protect against market abuse. Among other things, the G20 has agreed to ensure that all OTC derivatives contracts are reported to trade repositories; that trading activity be pushed onto exchanges and cleared through central counterparties (CCPs); and that non-centrally cleared contracts should be subject to higher capital requirements and minimum margin requirements.

According to Friday’s FSB report, reforms to introduce trade reporting and to increase capital requirements for non-centrally cleared derivatives are the most advanced. In addition, there has been “incremental progress” toward the central clearing of standardized derivatives.

At the same time, the FSB also found that few jurisdictions have rules in place to push OTC activity onto organized trading platforms and that most jurisdictions are only in the early phases of implementing margin requirements for non-centrally cleared derivatives.

Policy-makers continue to report that they are facing a range of implementation issues, but that efforts to address most of these issues are underway, the FSB report says. These include measures to harmonize transaction reporting; co-ordinated CCP resilience, recovery and resolution; and ongoing discussions to address cross-border regulatory issues.