Comparative Analysis of Foreign Regulatory Legislation of OTC Derivatives

Ivan R. Ipatyev ()

Economics of Contemporary Russia, 2021, issue 2

Abstract: The problems associated with existing regulatory initiatives that are meant to eliminate opaque market and with the clearing of over-the-counter derivative instruments. Comprehensively examination of the key similarities and differences between US and EU approaches to regulating the OTC derivatives market. For the study, we used the methods of logical analysis, theoretical generalization and systematization. The main difference between these approaches is the restrictions on commercial banking trade with the separation of derivative trading operations, with the rules of ownership and the establishment of mandatory requirements for exchange trade by central counterparties, as well as with commercial banking. The main similarity is the obligatory clearing of standardized contracts, the scope of derivatives, clearing for consumers and reporting on cleared and uncleaned derivative transactions by almost all financial counterparties. Cross-border clearing is facilitated by two approaches used in the US and the EU, where the legal culture differs from each other. Summing up, we can note that the greatest flexibility in dealing with unforeseen consequences for the regulator is provided by the US approach. At this stage, we have considered an institutional description of the differences and similarities between these approaches to regulating OTC derivatives in order to ensure trade transparency and greater stability.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ack:journl:y:2021:id:602

DOI: 10.33293/1609-1442-2021-2(93)-115-122

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