A Bank of International Settlements (BIS) working group will look at settlement problems in the over-the-counter derivatives market, in an effort to deal with delays in trade processing.The BIS Committee on Payment and Settlement Systems, composed of major central banks, said that the group would include committee members and representatives of derivatives watchdogs. Since the BIS last reported on OTC derivative settlement in 1998, the notional size of the market has more than tripled, and delays in settlement have attracted increasing criticism from regulators. The group's report is due in the first half of 2007.
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Speaking at the FX Invest West Coast conference, the New York Fed's Jeanmarie Davis addressed the challenges associated with clearing and settlement of forex options
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