Thursday July 6 2017

News Source: Global Exchanges

Focus: Other

Type: General

Country: International

Link: http://www.iosco.org/news/pdf/IOSCONEWS466.pdf




The Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI), the International Organization of Securities Commissioners (IOSCO) and the Basel Committee on Banking Supervision (BCBS) on 6 July 2017, published three guidance documents and two reports as part of their joint workplan on central counterparty (CCP) resilience, recovery and resolvability.

CCPs are an increasingly important part of the financial system, particularly following post-crisis reforms to mandate central clearing of standardised over-the-counter derivatives. To fully realise the benefits of CCPs, it is vital that they are subject to strong regulatory, oversight and supervisory requirements. In April 2015 the four committees agreed a joint workplan to coordinate international policy issues related to CCPs.

The three guidance documents published today mark the completion of the key substantive priorities set out in the workplan:

  • CCP resilience guidance – CPMI and IOSCO are providing further guidance on the Principles and Key Considerations of the Principles for financial market infrastructures (PFMI) regarding financial risk management for CCPs, in particular on governance, credit and liquidity stress testing, coverage, margin, and a CCP’s contributions of its financial resources to losses.
  • CCP recovery guidance – CPMI and IOSCO have updated their 2014 guidance on recovery for financial market infrastructures to provide clarifications in four areas: (i) operationalisation of recovery plans; (ii) replenishment of financial resources; (iii) non-default related losses; and (iv) transparency with respect to recovery tools and how they would be applied.
  • CCP resolution guidance –the FSB has finalised guidance which complements the FSB Key Attributes of Effective Resolution Regimes by providing guidance on implementing the Key Attributes in resolution arrangements for CCPs. The guidance sets out powers for resolution authorities to maintain the continuity of critical CCP functions; details on the use of loss allocation tools; and steps authorities should take to establish crisis management groups for relevant CCPs and develop resolution plans.

Please click on the above link for more information.