INTERNATIONAL: WFE Publish Position Paper on Key CCP Risk Management, Recovery and Resolution Issues

Thursday October 22 2015

The World Federation of Exchanges has published a position paper, setting out the views of global market operators and CCPs at its Annual Meeting in Doha, Qatar.

The paper says that a prescriptive `one-size-fits-all` approach to CCP oversight is not the most effective way to manage risk in the system. Given their market expertise and robust safety record, CCPs should continue to retain the flexibility to design and enhance their own risk management tools as has been the case to date.

The WFE paper also notes that CCPs shouldn`t be subject to standardised skin-in-the-game requirements and instead should “be tasked with sizing their contributed capital in a manner that reflects the alignment of clearing member and CCP incentives”.

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