FIA EPTA welcomes the opportunity to respond to the Bank of England on its proposal to amend the derivatives clearing obligation to reflect interest rate benchmark reform. FIA EPTA has consistently supported the G20 reforms to the OTC derivatives markets, which have made these markets more open, competitive, and transparent. A key component of these reforms is the derivatives clearing obligation, which mitigates systemic risk and increases market transparency and competition by ensuring that transactions in standardized OTC derivatives are centrally cleared.
FIA EPTA members, therefore, strongly support the Bank of England's proposal to update the scope of the derivatives clearing obligation to take into account the ongoing market transition to risk-free reference rates.
