Trade reporting, the use of central counterparties, the exchange of margin on uncleared trades, and the calculation of capital requirements (the capital a firm must hold) all trace back to the G20 agreement behind national laws.

The statement's items and the margin requirements

Figure 1 lists the main dates, oldest first.

Sept 24–25,2009Leaders' statement of the G20Pittsburgh SummitMay 12,2010Japan's Act amending the FIEAenactedJuly 21,2010US Dodd-Frank Act enacted2011G20 adds margin requirements foruncleared tradesJuly 4,2012EU EMIR Regulation (dated July 4,2012)End-2012Deadline for central clearing inthe statementNov 7,2022Financial Stability Board (FSB)2022 progress report
Figure 1Main dates from the G20 agreement to the FSB 2022 progress report
Figure description

The figure arranges the main dates from the G20 agreement to the FSB's 2022 progress report from oldest to newest. After the leaders' statement, the laws of Japan, the United States, and the EU were put in place in that order, and the G20 separately added margin requirements for uncleared transactions. The deadline for central clearing set in the statement is shown by year-end rather than a date. The milestone is the first leaders' statement. The spacing does not represent the length of time between dates.

At the Pittsburgh Summit on September 24 and 25, 2009, the G20 Leaders agreed to reform the market for over-the-counter derivatives. The core of the statement is this sentence1:

"All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest."

The statement asks for clearing through central counterparties. In the same paragraph, it also says that OTC derivative contracts should be reported to trade repositories and that contracts that are not centrally cleared should be subject to higher capital requirements1. The 2009 statement therefore has four items: standardization and platform trading, central clearing, trade reporting, and capital for uncleared trades. In 2011, the G20 added margin requirements.

Item What was agreed When agreed Purpose
Standardization and platform trading Standardized contracts are traded on exchanges or electronic trading platforms, where appropriate 2009 statement Only standardized trades are suitable for central clearing2. Platform trading may increase transparency3
Central clearing Contracts are cleared through central counterparties, by end-2012 at the latest 2009 statement Replaces a complex, opaque web of exposures between participants with simpler links between a central counterparty and its clearing members, which reduces systemic risk4
Trade reporting Contracts are reported to trade repositories 2009 statement Lets authorities monitor risk using trade data5
Capital for uncleared trades Higher capital requirements apply to contracts that are not centrally cleared 2009 statement Higher capital requirements cover the higher risk of uncleared contracts2
Margin for uncleared trades Margin requirements apply to contracts that are not centrally cleared Added in 2011 Reflects the higher risk of uncleared trades and encourages central clearing. Capital and margin complement each other in reducing risk2

In the 2011 agreement, the G20 asked the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) to develop internationally consistent standards67. The BCBS-IOSCO framework requires financial institutions and others that trade uncleared derivatives to exchange initial margin and variation margin according to the risk of the counterparty8.

Example: standardized and non-standardized contracts

Consider a hypothetical example in which Bank D enters into a standardized OTC derivative contract and a non-standardized one.

If Bank D enters into the standardized contract, the conditions that matter are the statement's "where appropriate" and the end-2012 deadline. The statement asks for such contracts to be traded on exchanges or electronic trading platforms, where appropriate, cleared through central counterparties by end-2012 at the latest, and reported to trade repositories1. Whether "where appropriate" applies and the actual deadline depend on each country's laws. The statement's items on central clearing and platform trading therefore apply to the standardized contract. Capital and margin for contracts that are not centrally cleared are asked separately, even for standardized contracts.

If Bank D enters into the non-standardized contract, the condition that matters is that only standardized trades are suitable for central clearing2. Many non-standardized contracts are not suited to central clearing, so they are less likely to fall under the statement's central clearing item. The higher capital requirements the statement asks for, and the margin requirements added by the 2011 agreement, therefore apply to contracts that are not centrally cleared16. The specific calculation and scope of capital and margin depend on each country's laws and standards.

The market weaknesses behind the agreement

The 2007–08 financial crisis exposed structural weaknesses in the OTC derivatives market. The Financial Stability Board (FSB) lists three. First, large counterparty exposures had built up between market participants without being managed properly. Second, losses could spread because participants were interconnected. Third, the overall credit risk to counterparties was hard to see, and confidence and market liquidity were lost under stress. During the crisis, major participants failed or suffered large losses9.

The leaders' statement gave three aims for the reforms: to reduce systemic risk, to improve transparency in the derivatives markets, and to protect against market abuse110. How central clearing became policy is covered on the Overview of Market Infrastructure page.

The international bodies that monitor implementation and set standards

The leaders' statement asked the FSB and its relevant members to assess regularly whether the reforms were being implemented. It also asked them to assess whether the reforms were sufficient to improve transparency in the derivatives markets, reduce systemic risk, and protect against market abuse1. At the Seoul Summit in November 2010, the leaders endorsed the FSB's recommendations and asked it to monitor progress on the OTC derivatives reforms regularly11. The main international bodies involved in implementing the agreement are as follows.

Body Role
Financial Stability Board (FSB) Monitors progress and publishes reports on the implementation status in each country
Basel Committee on Banking Supervision (BCBS) and International Organization of Securities Commissions (IOSCO) Jointly set the minimum standards for margin requirements on uncleared trades6
Committee on Payments and Market Infrastructures (CPMI) and IOSCO Review the implementation of the Principles for Financial Market Infrastructures (PFMI) and have issued technical guidance on the UTI and UPI12

The laws enacted in Japan, the United States, and the EU

Countries implement the agreement through their laws. The table below shows the dates on which Japan, the United States, and the EU put their OTC derivatives rules into law. The dates in the table are those of enactment or of the regulation, not the dates on which each regime took effect.

Country or region Law Date of the law
Japan Act Partially Amending the Financial Instruments and Exchange Act Enacted May 12, 201013
United States Title VII of the Dodd-Frank Act (Public Law 111-203) Enacted July 21, 201014
EU European Market Infrastructure Regulation (EMIR, Regulation (EU) No 648/2012) Regulation dated July 4, 201215

Japan

The 2010 amendment of the Financial Instruments and Exchange Act (FIEA) required the use of a financial instruments clearing organization for certain OTC derivative transactions and set up a system for retaining and reporting trade information16. A diagram in the Financial Services Agency's outline of the amending act shows the G20 Pittsburgh Summit agreement on central clearing and the retention and reporting of trade information by end-2012, and the promulgation and entry into force of the amendment17. The overall picture of Japan's rules is covered on the Japan's Derivatives Regulation at a Glance page.

United States

Title VII of the Dodd-Frank Act is titled "Wall Street Transparency and Accountability"18. Its first part, Subtitle A, is "Regulation of Over-the-Counter Swaps Markets"18.

EU

As its title says, EMIR is the EU regulation on OTC derivatives, central counterparties, and trade repositories15.

International implementation as shown in FSB reports

The latest progress report on the OTC derivatives reforms is the one of November 7, 202220. Later annual reports say that implementation is largely complete in the jurisdictions where most trading takes place2122.

The 2022 report counts 24 FSB member jurisdictions as of the end of September 2022. The status of Russia is based on information from 2021. The EU is counted together with five member states (France, Germany, Italy, the Netherlands, and Spain) as separate jurisdictions23.

The number of jurisdictions that had implemented each item in the 2022 report is as follows23.

Item Jurisdictions that have implemented it (out of 24)
Trade reporting 23
Central clearing 17
Interim capital requirements for uncleared trades 24
Final capital requirements for uncleared trades 18
Margin requirements for uncleared trades 16
Platform trading 13

Here, "implemented" means that the legal framework is in force and that the standards are in force for more than 90% of transactions. For clearing and platform trading, it also requires that the authorities regularly assess transactions against the standards24. Capital requirements have interim and final standards. The final capital requirements consist of the method for calculating the capital that covers counterparty credit risk and the standards for banks' exposures to central counterparties25.

The one jurisdiction that had not implemented reporting was South Africa, which had no licensed trade repository, either domestic or foreign26.

The final phase of the margin requirements began in September 202227.

Japan had implemented five of the six items, all except the final capital requirements. For the final capital requirements, the legal framework was in force and the standards had been adopted, but the conditions for "implemented" had not been met23.

After the 2022 report, the implementation status has been reported in the FSB annual reports28. As of the November 2024 annual report, jurisdictions where most trading takes place had implemented the frameworks for reporting, clearing, platform trading, capital, and margin. Trading in jurisdictions that had not done so was a small share of the global total21. As of the 2025 annual report, limited progress is needed only in jurisdictions that account for a small part of global trading volume22.

Delays, differing rules, and data aggregation

The open issues are summarized in the FSB's June 2017 review, the 2022 progress report, and the 2024 and 2025 annual reports.

The FSB's June 2017 review says that implementation took longer than originally intended, because of the size and complexity of the market, among other challenges29. In the 2022 report, the number of jurisdictions that had implemented clearing, reporting, and platform trading was unchanged from 202023. As of the 2024 annual report, the number of jurisdictions with a reporting framework had not increased over the past five years21. As of the same report, the clearing and platform trading frameworks had increased by only one in the previous year21. "Largely complete" is an assessment of the jurisdictions where most trading takes place, which is a different view from the number of jurisdictions with a framework.

Differences between national rules are also an issue. When jurisdictions differ in how and when they implement the reforms, markets can fragment geographically19. The leaders' wording, "on exchanges or electronic trading platforms, where appropriate," is set out in a different form in the laws of some jurisdictions. For example, US law requires trading on a regulated platform but does not require electronic execution30. For margin requirements, BCBS and IOSCO say that if the rules are not internationally consistent, trading may move to jurisdictions with looser rules (regulatory arbitrage) and competitive conditions will be unequal31.

The aggregation of trade repository data is also an open issue. Improving the quality of data and making it possible to aggregate it, and removing the legal barriers that prevent complete reporting and sharing of data, are the challenges listed in the 2017 review32. As of the 2024 annual report, legal barriers prevent authorities from sharing data reported to trade repositories, especially those that operate across jurisdictions33. As of the 2025 annual report, the reforms have greatly advanced central clearing practices, while progress in the use of data reported to trade repositories has been limited34.

Notes

  1. "G20 Leaders Statement: The Pittsburgh Summit" (G20 Information Centre; September 24–25, 2009), the paragraph on OTC derivatives. The quotation is the first sentence of that paragraph. ↩ ↩2 ↩3 ↩4 ↩5 ↩6

  2. Basel Committee on Banking Supervision and International Organization of Securities Commissions, "中央清算されないデリバティブ取引に係る証拠金規制 ＜要旨＞（仮訳）" (Margin requirements for non-centrally cleared derivatives: summary, provisional translation by the Financial Services Agency, in Japanese), page 3 (purpose; only standardized trades are suitable for central clearing) and page 4 (capital and margin are complementary). ↩ ↩2 ↩3 ↩4

  3. Financial Stability Board (FSB), "Review of OTC derivatives market reforms" (June 2017), section 3.2.3 "Platform trading rates" (page 18). The source describes the possibility that platform trading increases transparency. ↩

  4. FSB, "Review of OTC derivatives market reforms" (June 2017), Executive summary (page 4). The source describes central clearing replacing a complex, opaque web of exposures with simpler, more visible links between a central counterparty and its clearing members. ↩

  5. FSB, "Review of OTC derivatives market reforms" (June 2017), Executive summary (pages 1 and 4). The source describes reporting requirements increasing post-trade transparency, with many authorities using the data to monitor systemic risk and for other purposes. ↩

  6. BCBS and IOSCO, "中央清算されないデリバティブ取引に係る証拠金規制 ＜要旨＞（仮訳）" (Margin requirements for non-centrally cleared derivatives: summary, in Japanese), page 2, "背景" (Background) (in 2011 the G20 agreed to add margin requirements and asked for the standards to be developed). Footnote 3 cites the final declaration of the Cannes Summit in November 2011. ↩ ↩2 ↩3

  7. FSB, "Review of OTC derivatives market reforms" (June 2017), section 2.2 "Overview of the OTC derivatives reforms" (page 7), footnote 13. The source describes the leaders agreeing in 2011 on work on minimum standards. ↩

  8. BCBS and IOSCO, "中央清算されないデリバティブ取引に係る証拠金規制 ＜要旨＞（仮訳）" (Margin requirements for non-centrally cleared derivatives: summary, in Japanese), page 6, Key Principle 2. ↩

  9. FSB, "Review of OTC derivatives market reforms" (June 2017), section 2.1 "Motivation and intent to reform OTC derivatives markets" (page 7). The source describes the three weaknesses and says that major participants failed or suffered large losses in the crisis. ↩

  10. FSB, "Review of OTC derivatives market reforms" (June 2017), section 2.3 "The objectives of the reforms" (page 8). ↩

  11. FSB, "Review of OTC derivatives market reforms" (June 2017), section 2.2 "Overview of the OTC derivatives reforms" (page 7). The source says the leaders endorsed the 21 recommendations of the FSB's October 2010 report at the Seoul Summit in November 2010 and asked the FSB to monitor progress regularly. ↩

  12. FSB, "OTC Derivatives Market Reforms: Implementation progress in 2022" (November 2022), page 3 (technical guidance on the UTI, UPI, and CDE from CPMI and IOSCO) and page 6 with footnote 14 (review of the implementation of the PFMI). ↩

  13. Financial Services Agency, "第174回国会における金融庁関連法律案" (Bills related to the Financial Services Agency in the 174th Diet session, in Japanese), "成立した法律" (Enacted laws) (submitted March 9, 2010 [Heisei 22]; enacted May 12, 2010 [Heisei 22]). ↩

  14. "Public Law 111-203 - Dodd-Frank Wall Street Reform and Consumer Protection Act", the closing line "Approved July 21, 2010." ↩

  15. The title of Regulation (EU) No 648/2012 is "… of 4 July 2012 on OTC derivatives, central counterparties and trade repositories" (the version on legislation.gov.uk). The abbreviation EMIR is from the FSB's June 2017 review, footnote 19 (page 9). ↩ ↩2

  16. Financial Services Agency, "金融商品取引法等の一部を改正する法律の概要" (Outline of the Act Partially Amending the Financial Instruments and Exchange Act, in Japanese), "Ⅰ 店頭デリバティブ取引等の決済の安定性・透明性の向上" (I. Improving the stability and transparency of settlement of OTC derivative transactions), item 1 (requirement to use a clearing organization; page 1) and item 3 (system for retaining and reporting trade information; page 2). ↩

  17. Financial Services Agency, "金融商品取引法等の一部を改正する法律の概要" (Outline of the Act Partially Amending the Financial Instruments and Exchange Act, in Japanese), the last diagram (page 4 of the PDF; it shows the promulgation and the effective date of the main provisions, and the words "Ｇ20ピッツバーグサミット" [G20 Pittsburgh Summit]). ↩

  18. "Public Law 111-203", table of contents, "TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY" and its first "Subtitle A--Regulation of Over-the-Counter Swaps Markets". ↩ ↩2

  19. FSB, "Review of OTC derivatives market reforms" (June 2017), section 3.1 "Progress in implementation" (page 10), the paragraph on geographic market fragmentation. ↩ ↩2

  20. Financial Stability Board, "Making Derivatives Markets Safer – Implementation", list of "Progress Reports" (the latest is the progress report of November 7, 2022). Checked on October 3, 2026. ↩

  21. FSB, "Promoting Global Financial Stability: 2024 FSB Annual Report" (November 18, 2024), section 3.3 "Making derivatives markets safer" (page 24). ↩ ↩2 ↩3 ↩4

  22. FSB, "Promoting Global Financial Stability: 2025 FSB Annual Report", Box 1 on page 7, and "Making derivatives markets safer and FMIs more resilient" on page 34. ↩ ↩2

  23. FSB, "OTC Derivatives Market Reforms: Implementation progress in 2022" (November 2022), page 1 (footnotes 1 and 2; the numbers for clearing, reporting, and platform trading are unchanged from 2020), and page 2, the "Blue" row under "Totals" in Table 1, and the row for Japan (JP). ↩ ↩2 ↩3 ↩4

  24. FSB, "OTC Derivatives Market Reforms: Implementation progress in 2022" (November 2022), page 8, the "Blue" column of Table A in the Annex (page 12 of the PDF). For margin, the threshold is more than 90% of transactions, according to the phase-in of the requirements. ↩

  25. FSB, "OTC Derivatives Market Reforms: Implementation progress in 2022" (November 2022), page 5, "Higher capital requirements for non-centrally cleared derivatives" (page 9 of the PDF). ↩

  26. FSB, "OTC Derivatives Market Reforms: Implementation progress in 2022" (November 2022), page 3, "Trade reporting" (page 7 of the PDF). ↩

  27. FSB, "OTC Derivatives Market Reforms: Implementation progress in 2022" (November 2022), pages 1 and 5, "Margin requirements for non-centrally cleared derivatives". ↩

  28. FSB, "Making Derivatives Markets Safer – Implementation", the opening description (the implementation status is reported in the annual report). ↩

  29. FSB, "Review of OTC derivatives market reforms" (June 2017), section 3.1 "Progress in implementation" (page 10). ↩

  30. FSB, "Review of OTC derivatives market reforms" (June 2017), section 3.2.3 "Platform trading rates" (page 18) and footnote 38. ↩

  31. BCBS and IOSCO, "中央清算されないデリバティブ取引に係る証拠金規制 ＜要旨＞（仮訳）" (Margin requirements for non-centrally cleared derivatives: summary, in Japanese), page 3 (two concerns if margin requirements are not internationally consistent). ↩

  32. FSB, "Review of OTC derivatives market reforms" (June 2017), Executive summary (pages 1 and 4). ↩

  33. FSB, "Promoting Global Financial Stability: 2024 FSB Annual Report" (November 18, 2024), section 3.3 "Making derivatives markets safer" (page 25). ↩

  34. FSB, "Promoting Global Financial Stability: 2025 FSB Annual Report", Box 1 on page 7. ↩