Applying the Central Clearing Mandate: Different Options for Different Markets

By John Kiff, Alessandro Gullo, Cory Hillier, Panagiotis Papapanagiotou

January 28, 2022

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Format: Chicago

John Kiff, Alessandro Gullo, Cory Hillier, and Panagiotis Papapanagiotou. Applying the Central Clearing Mandate: Different Options for Different Markets, (USA: International Monetary Fund, 2022) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Back in 2009, G-20 leaders have called for all standardized over-the-counter (OTC) derivatives to be cleared through central counterparties (CCPs). By now, 18 of the 24 Financial Stability Board (FSB) member jurisdictions have provided for mandatory central clearing frameworks in place, covering at least 90 percent of all standardized OTC derivatives in their jurisdictions. However, the authorities in several countries remain confronted with the hows and wherefores of mandatory central clearing, also in light of the international dimension of OTC derivatives contracts. This paper examines the policy options available to countries that have yet to fully conform to the clearing mandate, centered on the setup of local CCPs or on the use of foreign CCPs, and elaborates on their feasibility, risks and benefits from an economic, legal and tax viewpoint.

Subject: Central counterparty clearing house, Collateral, External debt, Financial institutions, Financial markets, Interest payments, Tax law, Tax policy, Taxes, Withholding tax

Keywords: Africa, Central counterparties, Central counterparty clearing house, Clearing mandate, Collateral, Counter derivatives market, Global, Interest payments, Interest rate derivatives CCP, International over the counter derivatives markets, Non-U.S. OTC foreign exchange, OTC derivatives transaction, Regulation and governance., Tax law, Withholding tax

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2022/014
Stock No:

WPIEA2022014
ISBN:

9781616359232
ISSN:

1018-5941

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