The report’s analysis is based on a review of relevant works of international standard-setting bodies and academic literature and an examination of publicly available transaction-level post-trade data about CDS transactions before and after the introduction of mandatory post-trade transparency in certain CDS markets in the United States. IOSCO also conducted a survey of market participants and other market observers regarding their use of certain publicly available post-trade data and its perceived impact on the market.

IOSCO reached a preliminary conclusion that the data does not suggest that this introduction of mandatory post-trade transparency had a substantial effect on market risk exposure or market activity for those CDS products. It preliminarily believes that greater post-trade transparency in the CDS market would be valuable to market participants and other market observers, and encourages each of its members to take steps to enhance post-trade transparency in the CDS market in its jurisdiction.

CDS are contracts that transfer the credit risk of a reference entity or instrument from a buyer of credit protection to a seller of credit protection. The Bank for International Settlements estimates that gross notional amounts of outstanding CDS at end-2013 were approximately $21 trillion. IOSCO believes that improving transparency in this market will increase the efficacy of the G20 commitments to reform the OTC derivatives markets.

IOSCO seeks public comment on the consultation report, in order to inform its final report on post-trade transparency in this market.

IOSCO intends to continue studying trends in the CDS market.