Conduct Risk and Financial Stability [6]

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Bullet points include: An EU regulation implementing most of the 2009 G20 pledges on increasing transparency and reducing counterparty risk in the OTC derivatives market. Applies to any entity established in the EU that has entered into a derivatives contract. Financial counterparties (FC), including banks, insurers, investment firms and fund managers. Non-financial counterparties (NFC), i.e. everyone else (including NFC+). Extensive reporting requirements. Promotes the use of central counterparties (CCPs) and imposes margin requirements on non-cleared trades. Controversial (within the financial industry) because expensive to implement, has disrupted some business models and many in the industry doubt it will actually lead to a substantially safer financial system

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