Written question asked by Lord Myners (Labour), in the House of Lords. It was answered by Lord Sassoon (Conservative) on Wednesday, 7 July 2010.

Finance: Derivatives

Question: To ask Her Majesty’s Government what assessment they have made of (a) the United Kingdom's ability to offer central clearing party facilities for euro-denominated securities and derivatives, and (b) access to central bank facilities.

Answer: In October 2009, the European Commission published a communication on ensuring efficient, safe and sound derivative markets, within which it announced its intention to publish draft legislation in 2010 designed to enhance the resilience of over-the-counter (OTC) derivatives markets. On 14 June 2010, the Commission published a consultation paper which covers issues relating to organisational and risk management standards for central clearing counterparties (CCPs); interoperability between CCPs; requirements for clearing of OTC derivatives; and the reporting of OTC derivative trades to trade repositories. The UK is monitoring the consultation process closely, and is feeding in views as appropriate. The consultation closes on 9 July 2010 and a final proposal from the Commission is expected in September. In the UK, the Treasury published a joint paper with the Financial Services Authority (FSA) entitled "Reforming OTC Derivatives Markets" in December 2009 setting out its joint position on specific questions relating to the OTC derivatives markets (http://www.fsa. gov.uk/pubs/other/reform_otc_derivatives.pdf).

Secondary information