Framework for supervisory information about the derivatives activities of banks and securities firms (Joint report by the Basel Committee on Banking Supervision and the Technical Committee of the 'IOSCO'.)

May 1995

The Basel Committee on Banking Supervision and the Technical Committee of the International Organisation of Securities Commissions (IOSCO) have been working to enhance the prudential supervision of the derivatives operations of banks and securities firms. For example, in July 1994 the Basle Committee and IOSCO jointly released documents providing guidance on the sound risk management of derivatives activities.

In their joint release of the July 1994 documents, the Basle Committee and IOSCO stated that they intended further consultations in the area of derivatives and other topics of common interest. These consultations have led to an assessment of the information necessary for effective supervision of the derivatives activities of banks and securities firms. As a result of this work, the Basle Committee and IOSCO have designed and are distributing the information framework elaborated in this paper to supervisors of banks and securities firms. This framework describes information which the two Committees believe should be available within regulated firms and material affiliates active in the derivatives markets and that should be accessible to supervisors to assess the risks of derivatives and their impact on institutions' financial condition, capital adequacy and performance.