The UVF has drawn up a code of conduct and plans to scale down its membership dramatically as it moves away from paramilitarism and crime, it emerged today.
Today's Independent Monitoring Commission (IMC) report noted that senior members of the UDA have also been trying to steer their organisation away from criminality.
But while the report welcomed both organisations' efforts, it accused individuals in both groups and the breakaway LVF of carrying out murders and attempted murders in recent months.
The IMC observed: "The moves made in the UDA and Ulster Political Research Group, and by the UVF and the Progressive Unionist Party, are in no way comparable with the transformation that has taken place in respect of PIRA and Sinn Fein.
"While such developments as have occurred are welcome it cannot yet be said that these senior figures have brought their respective organisations very far along the road."
The Commission welcomed the UVF's efforts to tackle criminality within its ranks and reduce its military capacity.
The four-member panel chaired by Lord Alderdyce noted the UVF and UDA had helped prevent violence during the summer marching season.
However, the UVF was accused of sanctioning an attempt on the life of leading loyalist Mark Haddock (37) in Newtownabbey, Co Antrim, in May.
Individuals within the UVF were also alleged to have carried out in July the gang murder of 36-year-old Scotsman Ronald Mackie in Tobermore, Co Derry, after a loyalist band parade and the attempted murder of James Keenan. The Commission believed neither of these were sanctioned by the UVF leadership.
The UVF issued more threats to people's lives than any loyalist organisation over the six-month period covered in the IMC report.
It carried out a sectarian attack in March and some members continued to be involved in extortion, smuggling, the sale and distribution of counterfeit goods, loan sharking and the robbery of a store in Dundonald, on the outskirts of east Belfast.
The IMC said there had been some limited progress in the UDA in reducing the organisation's involvement in crime. "The expulsion of members of the North Belfast brigade on the grounds of their criminal activity and the subsequent avoidance of bloodshed was a valuable step forward," the Commission noted.
"We also believe that senior figures successfully restrained members from violence following these changes.
"There appears to have been some reduction in drug dealing offences in certain areas but other crimes may have taken their place," it said.
However, it accused members of the organisation of being behind the murder of 36-year-old Mark Christie in Bangor, Co Down, in August by a machete-wielding mob, although the Commission found no evidence that the killing was sanctioned at leadership level.
UDA members were blamed for a number of sectarian attacks during the summer in Belfast, Ballymena and Derry as well as carrying out shootings and assaults.
"Some individual units still recruit new members. Some have also continued efforts to obtain weapons, though we believe that this activity has been questioned by others within the organisation.
"We have seen no sign that the UDA is contemplating an early decommissioning of weapons."
"Members of the UDA remain heavily involved in a wide variety of other serious crime including drug dealing, the sale of counterfeit goods, robbery and extortion," it said.
On Monday, the South East Antrim brigade of the UDA announced it had broken away from the organisation, launching Beyond Conflict — an initiative aimed at transforming itself into a community development body with Government funding. The brigade estimated the five-year process would cost stg£8.5 million.
The IMC said the Loyalist Volunteer Force (LVF), a breakaway faction from the UVF, was involved in major drug dealing and other crimes, with members keeping the proceeds for themselves.
The organisation, formed by Billy Wright, who was shot dead by the INLA in the Maze Prison in 1999, was involved in intimidating a Catholic family but in the IMC's view it was primarily a criminal concern which did not have any coherent political strategy.
"We are aware of statements to the effect that the LVF has ceased to function as a paramilitary organisation," the Commission said.
"In our view there is still a network of criminals who call themselves the LVF; members pay dues; there has been no decommissioning of the weapons which undoubtedly exist and the instructions which have been issued to people to refrain from using the LVF name when dealing in drugs suggest the presence of at least some form of authority."