Market Fragmentation: Promote cross-border regulatory coordination and consistency

Policymakers and regulators responded expeditiously to the global financial crisis, acting to implement a series of regulatory reforms meant to improve the resiliency of the financial system.

Now that many of these reforms are fully implemented, it is prudent to review their impact and interaction to ensure they are achieving their stated goals without unduly harming economic growth.

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Correspondence

GFMA Response to FSB Consultation on Evaluation of TBTF Reforms

June 2019  |  Correspondence  |  Regulatory Correspondence

GFMA submitted a response letter to the FSB in regarding its consultation on evaluation of too-big-to-fail (TBTF) reforms for banks. The response outlined key achievements in addressing TBTF, the areas that warrant further analysis and the other questions that should be asked in order to complete the evaluation.

GFMA, ISDA and IIF Letter to BCBS on Revised CVA Framework

May 2019  |  Correspondence  |  Regulatory Correspondence

GFMA, ISDA and the IIF sent a joint letter to the Basel Committee outlining concerns on the impact of the revised Credit Valuation Adjustment (CVA) Framework. The letter notes that industry QIS indicated that the framework will result in substantial increases in capital requirements.

GFMA, IIF and ISDA Submit Response to BCBS on Leverage Ratio Treatment of Client Cleared Derivatives

January 2019  |  Correspondence  |  Regulatory Correspondence

GFMA, the International Swaps and Derivatives Association (ISDA) the Institute of International Finance (IIF) submitted a join response to the Basel Committee on Banking Supervision’s consultation on the leverage ratio treatment of client cleared derivatives. The industry believes that in the context of a bank exposure created by a client cleared derivative transaction, the leverage ratio framework should recognize the exposure-reducing effect of initial margin, particularly as it is not used to increase the bank’s leverage.

GFMA, FIA and IIF Response to FSB Derivatives Assessment Team Report

September 2018  |  Correspondence  |  Press Releases

GFMA, FIA, and the Institute of International Finance (IIF), respond to the FSB consultative report of the Derivatives Assessment Team (DAT) on “Incentives to centrally clear over-the-counter (OTC) derivatives” (DAT Report).

GFMA Principles for Achieving Consistent Regulatory Regimes and Supervisory Practices

April 2018  |  Correspondence  |  White Papers and Reports

GFMA published Principles for Achieving Consistent Regulatory Regimes and Supervisory Practices.

2018 marks ten years on from the Group of 20 (G20) response to the global financial crisis that ushered in financial regulatory reforms that have transformed global capital markets and enhanced financial stability.  To improve regulatory outcomes and deliver on the benefit of reforms, GFMA calls on global financial regulators to agree to principles to design regulatory cooperation arrangement(s) to develop consistent regulatory regimes and supervisory practices.  GFMA encourages global policymakers to establish regulatory cooperation arrangement(s) that (are): (i) Forward-looking; (ii) Enhance cross-border investment and market integrity; (iii) Supportive of similar outcomes; (iv) Predictable; (v) Transparent; (vi) Evidence-based; (vii) Proportionate; (viii) Enhance market certainty; (ix) Strengthen supervisory coordination; and (x) Supportive of conflict mitigation. 

“Now is the time for global financial regulators to design and adopt regulatory cooperation arrangements to deliver consistent regulatory regimes and supervisory practices to strengthen the foundation for strong, sustained and balanced growth leading to global job creation,” said Mark Austen, chief executive officer of GFMA and chief executive officer of ASIFMA.  “These principles aim to balance the legitimate national interests of domestic regulators and supervisors with a genuine commitment to the global common good of a safe, open and competitive global market, which has been a hallmark of the G20 reform agenda. We encourage global policymakers to adopt these principles for regulatory cooperation arrangements, which we believe will improve long-term market integrity, efficiency, liquidity, and resilience by minimizing the risk of fragmentation and the adverse effect it has on global economic growth.” 

See Full Press Release and Press Contacts here.

GFMA Guiding Principles for Market Transparency

April 2018  |  Correspondence  |  Press Releases

GFMA published Guiding Principles for Market Transparency.

Increasingly, regulators are developing public transparency requirements across markets and jurisdictions, which highlights differing policy objectives for rules and the need for shared global principles. Market transparency requirements should support specific policy objectives, consider the fundamental structural differences between markets and among asset classes, and provide meaningful and useful information to market participants while doing no harm to market integrity, liquidity, efficiency and resilience.  Fundamental structural differences between markets, including participants and their needs, preclude a “one-size-fits-all” approach. 

GFMA encourages policymakers and regulators to design market transparency frameworks in line with the following principles:

I.             Transparency to regulators should be timely, consistent and appropriate to fulfil market surveillance duties and to support market integrity.

II.            Public market transparency requirements should support the provision of liquidity for price formation and risk management, while doing no harm to market integrity, liquidity, efficiency and resilience.

III.           The level of transparency and timing for reporting should be appropriately calibrated based on regulatory intent, market structure, and liquidity profiles of specific assets.

IV.          An effective transparency framework is based on consultation with all market participants and a cost-benefit analysis.

V.            The market’s ability to implement requirements, including on a cross-border basis, if appropriate, is critical.

See: Full Press Release here.

Brexit: Implications for the Global Financial System

June 2017  |  Correspondence  |  White Papers and Reports

GFMA, which represents the common interests of the world’s leading financial and capital market participants, believes that Brexit is an issue that has unique and global spillovers, not just isolated to the UK and EU. Brexit is an event of such magnitude that it will affect almost all dimensions of the global economy, including financial services, in some way.

The GFMA White Paper, ‘Brexit: Implications for the Global Financial System’ focuses on issues that our global members have identified as most important to their cross-border businesses and the international investment and economic growth they support.

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Resources

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News

New Financial Releases Global Capital Markets Growth Index

10 January 2019   |   News  |  Economic Growth

Washington, D.C., 10 January 2019 – New Financial, commissioned by the Global Financial Markets Association (GFMA), has today published a new major industry report, “The New Financial Global Capital Markets Growth Index.” The purpose of the report is to provide an in-depth review and comparison of national and regional capital markets across the globe in terms of market size, depth, and access to pools of capital.

GFMA Releases Principles for Achieving Consistent Regulatory Regimes and Supervisory Practices

17 April 2018   |   News  |  Market Fragmentation: Promote cross-border regulatory coordination and consistency

HONG KONG, LONDON and WASHINGTON, 17 April 2018 – The Global Financial Markets Association (GFMA), which represents the common interests of the world’s leading financial and capital market participants, released “Principles for Achieving Consistent Regulatory Regimes

PwC Report Reviews State of Global Financial Market Liquidity

12 August 2015   |   News  |  Capital Markets Efficiency and Resiliency

Release Date 12 August 2015 Contacts Krishna Rao, PwC +44 207 804 3765, krishna.chilmakurthi.rao@uk.pwc.com Katrina Cavalli, GFMA +1 (212) 313 1181, kcavalli@gfma.org Rebecca Hansford, AFME +44 (0)20 743 9367, rebeccca.hansford@afme.eu  Vijay Chander, ASIFMA +852 2531 6521,

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