LThe G20 provided guidance on margining for over-the-counter (OTC) derivatives not cleared by a central counterparty (non-centrally cleared OTC derivatives) as part of its financial markets reform program. It had been agreed that improved transparency in the OTC derivatives markets and further regulation of OTC derivatives and market participants would be necessary to mitigate the systemic risk posed by OTC derivatives transactions.
This guideline is in response to the invitation by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) for jurisdictions to communicate their expectations regarding best practices in respect of the exchange of margin for non-centrally cleared OTC derivatives.
