THEprinciples on data reporting for Over-The-Counter (OTC) derivatives are directed to both policy makers and supervisors, the International Organisation of Securities Commission (IOSCO) has said.According to the group, the principles reaffirm the importance of supervisory co-operation, co-ordination and information exchange.The group explained the importance of identifying a group-level supervisor whose responsibility is to focus on group-level supervision and the facilitation of co-ordination between relevant supervisors.It explained that new principles have been included, which relate to the role and responsibilities of supervisors in implementing minimum prudential standards, monitoring and supervising activities of financial conglomerates and taking corrective action as appropriate.The principles reaffirm the importance of fit and proper principles and also provide, through a series of new principles, guidance for supervisors intended to ensure the existence of a 'robust corporate governance framework for financial conglomerates, adding that 'These new principles relate to the structure of the financial conglomerate, the responsibilities of the board and senior management, the treatment of conflicts of interest and remuneration policy.According to the committees, the requirements and data formats will apply both to market participants reporting to Trade Repositories (TRs)and to reporting to the public and to regulators.The report also finds that certain information currently not supported by TRs would be helpful in assessing systemic risk and financial stability, and discusses options for bridging these gaps.The CPSS serves as a forum for central banks in their efforts to monitor and analyse developments in payment and settlement arrangements as well as in cross-border and multicurrency settlement schemes. The CPSS Secretariat is hosted by the Bank of International Settlements (BIS).The committees support the view that TRs, by collecting such data centrally, would provide authorities and the public with better and timely information on OTC derivatives.IOSCOexplainedthat the development would make markets more transparent, help to prevent market abuse, and promote financial stability.'Following the consultation exercise, the report was expanded to elaborate on the description of possible options to address data gaps. The report was also updated to reflect recent international developments in data reporting and aggregation requirements stemming from the Legal Entity Identifier (LEI) workshop in September 2011 and other efforts under the auspices of the Financial Stability Board (FSB), in support of a request by the G20 at the Cannes Summit, to advance the development of a global Legal Entity Identifier.'It added,'as the report indicates, some questions remain regarding how best to address current data gaps and define authorities' access to TRs, adding that based on a request by the G20, two internationally co-ordinated working groups will address these questions in the coming year.'The FSB will establish an ad hoc group of experts to further consider means of filling current data gaps, while the CPSS and IOSCO will establish a joint group to examine authorities' access to trade repositories.
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