US lawmakers Barney Frank and Collin Peterson, the chairmen of the two committees that oversee the securities and futures regulators, issued an outline for legislation to increase oversight of the private derivatives markets.

The document, released July 30, calls for standardised contracts to be cleared through central counterparties and traded on exchanges. Those that cannot be cleared would need to be backed by additional capital and subject to strict collateral requirements.

Big derivatives dealers have promised to implement central clearing for their own trades and for their clients’ by mid-December.