At their 2009 Pittsburgh Summit, leaders of the Group of 20 advanced and emerging market economies (G20) called for a major overhaul of over-the-counter (OTC) derivatives markets, which was to have been completed by the end of 2012. The reforms are supposed to make derivatives trading safer and more transparent (by enabling authorities and investors to gauge buildups of pressure that could spill out and cause broader financial problems).

But more than two years after the deadline, no jurisdiction has fully implemented any of the reforms, and some countries haven’t even started. The reforms backed by the G20 include changing the way counterparties in most derivatives contracts deals with the other. Instead of a purely bilateral relationship, the G20 want one in which a central counterparty (CCP) is interposed between the two parties. The G20 also called for moving OTC trading in many derivatives to exchanges or electronic trading platforms (internet-based systems for trading financial instruments). For contracts not centrally cleared, G20 leaders proposed higher bank capital requirements.

The reforms have been delayed in many cases because the legislative and regulatory processes required to implement them—including cross-border coordination—turned out to be more complex than anticipated. Some countries are hanging back until Europe and the United States make and mesh their reforms. The following article in the June 2015 edition of the International Monetary Fund's Finance & Development magazine assesses the status of the reform process and the cross-border frictions that have arisen:

http://www.imf.org/external/pubs/ft/fandd/2015/06/kiff.htm