On December 4, the European Securities and Markets Authority issued a statement following a meeting with a number of global regulators regarding the reform of the OTC derivatives market. The authorities identified several inconsistencies, duplications and potential conflicts within their current rules, acknowledging that such issues may result in confusion and regulatory arbitrage. As a start to addressing these issues, the authorities reached a number of understandings in the following areas:

• Clearing – to consult further prior to bringing in rules relating to mandatory clearing of derivative contracts and to consider implementing clearing requirements in respect of products or product classes which certain authorities may identify should be subject to clearing.
• Transitional provisions – in order to prevent regulatory arbitrage and market confusion, to consider the provision of transitional implementation periods for jurisdictions which are later in implementing OTC derivatives reform.