The unexpected failure of Barings Plc. ("Barings") in February 1995 brought into sharp focus the need for industry and regulators alike to examine the problems that arose in the ensuing crisis, and to take concrete steps to deal with them on both a unilateral and a multilateral basis.
In consequence, in May 1995 representatives of regulatory authorities in 16 countries responsible for supervising the activities of the world's major futures and options markets were invited by the CFTC and SIB to meet in Windsor, England, to discuss key issues resulting from the failure of Barings Plc. In the Windsor Declaration, the authorities agreed to a program of work to ensure that regulatory concerns revealed by this failure were redressed by specified action in four areas:
- cooperation between market authorities;
- protection of customer positions, funds and assets;
- default procedures; and
- regulatory cooperation in emergencies.
The Windsor Declaration contemplated work to be carried forward both by the individual authorities who attended the Windsor meeting and also on a broader multilateral basis through appropriate international bodies. In July 1995, following the Windsor meeting, the Presidents Committee of IOSCO adopted a resolution supporting further work by the IOSCO Technical Committee as discussed in the Windsor Declaration.
At the same time, the industry through the FIA Global Task Force on Financial Integrity, consisting of industry representatives from 17 jurisdictions, initiated an ambitious program of work by markets, market members and market users. Separately, a number of individual market authorities initiated their own regulatory and procedural reviews in light of the Barings collapse.
Consequently, this final Report from the Windsor Co-Chairs should be read together with separate papers, as follows:
- a compendium, prepared from reports by individual jurisdictions represented at Windsor, on domestic work undertaken in the last year to implement Windsor recommendations;
- a summary by the IOSCO Secretary General of the IOSCO work, carried forward since our last report in July last year, to fulfil the remit from the Declaration which IOSCO agreed at Windsor to complete; and
- a paper by the FIA Global Task Force on post-Barings initiatives that have been completed in that group.
