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This Report focuses on the market participants who should be regulated as DMIs, given their type and level of involvement within the OTC derivatives market, and describes the substantive areas that generally comprise regulation. The regulation of DMIs should be primarily focused on areas where capital, counterparty or client money and public confidence may be most at risk. The Report provides a description and definition of the market participants who should be considered DMIs, including a discussion of the characteristics distinguishing DMIs from traditional securities market intermediaries. The Report makes recommendations with respect to the following substantive areas:
- Registration/licensing standards;
- Capital standards or other financial resources requirements for non-prudentially regulated DMIs;
- Business conduct standards;
- Business supervision standards; and
- Recordkeeping standards.
Cross-border consistency among market authorities with respect to the regulation of DMIs is essential to successful oversight of the global OTC derivatives market particularly because many DMIs operate in multiple jurisdictions.