Derivatives bodies urge caution ahead of regulatory crackdown

REPRESENTATIVES of the derivatives industry have urged the European Union to water down its plans to standardise and centrally clear over-the-counter contracts.<br /><br />A group of three industry bodies told the European Commission (EC) that &ldquo;initiatives that would seek to standardise the terms of all OTC contracts are counterproductive&rdquo;.<br /><br />The trio, comprising the International Swaps and Derivatives Association, the Securities Industry and Financial Markets Association and the London Investment Banking Association, were responding to the Commission&rsquo;s plans to tighten up regulation of the derivatives market.<br /><br />The EC wants to encourage more central clearing of trades and establish central data stores to collate data on transactions and positions held.