While better information sharing and emergency procedures will help to detect, and hopefully deter and assist in the handling of, a market "event", and while increased transparency of market protection will improve customer understanding and investment decisions, disruptive events will continue to occur on the markets. Market authorities will continue to need to be sensitive that responses help to contain the systemic consequences of such events.

Examination of the Barings failure was instructive for recognizing that the effective protection of customer positions, funds and assets carried by financial intermediaries and held at exchanges and exchange default procedures play an important role in the reduction of the potential for systemic risk. Among other things, the Windsor Declaration called on authorities to review existing mechanisms and to promote, as appropriate, national provisions and market procedures that facilitate the prompt liquidation and/or transfer of positions, funds, and assets from failing members of futures exchanges. The Windsor Declaration further called for the development of "best practices" with respect to the treatment of positions and funds in the event of a financial disruption at a member firm in order to isolate the event and maximize the safety of those funds and assets.

In this regard, there has been much progress on a national basis in a number of jurisdictions where existing procedures have been reviewed, and consideration given to the need for and advisability of possible legal changes. However, there has also been progress within IOSCO and the FIA Global Task Force:

• the March IOSCO Technical Committee Report containing a paper on Default Procedures which identifies best practices on the treatment of proprietary and customer positions, funds and assets to permit the prompt isolation of the problem at the defaulting firm;
• a further Technical Committee paper which provides recommendations relative to client asset protection from the perspective of market intermediaries; and
• the FIA Global Task Force crisis protocol which, among other things, suggests some specific actions that should be considered and/or taken by an exchange where the cause of a financial emergency is a clearing member's default.