The International Organization of Securities Commissions (IOSCO) is backing new rules to make the price and volume of individual transactions in the credit default swaps (CDS) markets publicly available.
The post-trade mandates, which IOSCO hopes will take effect worldwide, would build upon measures across the G20 nations where jurisdictions have already implemented trade reporting rules.
In a report, IOSCO set out to analyse the impact of mandatory post-trade transparency on credit derivatives and decided it would be ‘valuable to market participants and other market observers’.
The association decided introducing worldwide mandates could promote more efficient price discovery and increase price competition. Other benefits drawn from the report include the improvement of valuations and consequently enhanced risk management and increased liquidity.
At present, only Canada, Europe and the US have applied post-trade rules such as reporting and central clearing for the CDS market. IOSCO is now seeking public input on its report by 15 February 2015.
The call for transparency comes after a number of Wall Street’s big banks were accused by a New York federal judge of violating antitrust law by fixing prices and restraining competition in the $21 trillion CDS market in September.
The defendants include Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC Holdings, J.P. Morgan, Morgan Stanley, Royal Bank of Scotland and UBS.