Wednesday April 29 2015

News Source: Global Exchanges

Focus: Other

Type: General




FIA Global has issued recommendations for assessing and managing risks that arise from central counterparty (CCP) clearing.

Since 2009, when the G20 committed to clear all standardized over-the-counter derivatives, CCPs have grown in their systemic importance in global financial markets and their role as a pillar of global financial reforms. As a result, there has been increased scrutiny of CCP risk from regulators and market participants. FIA Global’s position paper reflects the perspective of clearing members, and addresses the risks that CCPs bring to clearing members, their clients, and the market generally.

Highlights of FIA Global’s recommendations include:

  • Enhancing participants’ ability to assess CCP risk through consistent and transparent CCP disclosures.
  • Ensuring initial margin requirements are effective, transparent and predictable to all participants, and requiring CCPs to increase margin levels where they are determined to be inadequate.
  • Avoiding wind-downs and liquidations by prioritizing the continued operations of CCPs using clearly-defined loss allocation tools and effective resolution plans.
  • Reducing conflicts of interest, aligning incentives, and improving risk management through enhanced CCP governance. 

Click on the link above for further details.