Framework outlines a set of financial resources and tools that should be readily available to a resolution authority in case of a central counterparty (CCP) resolution.
Derivatives Markets and Central Counterparties
The G20 Leaders agreed in 2009 on a comprehensive reform agenda for over-the-counter (OTC) derivatives markets, with the objectives of improving transparency, mitigating systemic risk, and protecting against market abuse.
To achieve these objectives, the G20 agreed that:
- all OTC derivatives contracts should be reported to trade repositories (TRs);
- all standardised contracts should be cleared through central counterparties (CCPs);
- all standardised contracts should be traded on exchanges or electronic trading platforms, where appropriate; and
- non-centrally cleared (bilateral) contracts should be subject to higher capital requirements and minimum margining requirements.
To support the implementation of these reforms, the FSB and other international standard-setting bodies have developed standards and guidance on financial market infrastructures (FMIs) and market participants. The FSB has undertaken and continues to undertake work on the resolution of FMIs, in particular CCPs. This complements the work undertaken by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) on the resilience and recovery of CCPs and other FMIs.icipants. The FSB has undertaken and continues to undertake work on the resolution of FMIs, in particular CCPs. This complements the work undertaken by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) on the resilience and recovery of CCPs and other FMIs.
Standards and Guidance on CCPs
Principles for Financial Market Infrastructures (PFMI) (CPMI-IOSCO, April 2012) (Alternative source)
Disclosure framework and assessment methodology (CPMI-IOSCO, December 2012) (Alternative source)
Assessment methodology for the oversight expectations applicable to critical service providers (December 2014) (Alternative source)
Public quantitative disclosure standards for central counterparties (CPMI-IOSCO, February 2015) (Alternative source)
Capital requirements for bank exposures to central counterparties (BCBS, April 2014)
Margin requirements for non-centrally cleared derivatives (BCBS and IOSCO, April 2020) (Alternative source)
Recovery of financial market infrastructures (CPMI-IOSCO, July 2017) (Alternative source)
Resilience of central counterparties (CCPs): Further guidance on the PFMI (CPMI-IOSCO, July 2017) (Alternative source)
See General and sector-specific standards and Guidance on resolution.
CCPs that are systemically important in more than one jurisdiction (SI>1 CCPs)
The biennial review of the list of CCPs that are systemically important in more than one jurisdiction (SI>1 CCPs) is coordinated by CPMI and IOSCO. It is based on the criteria set out in the FSB 2017 Guidance.
Once a CCP has been agreed to be systemically important in more than one jurisdiction (SI>1):
- The home resolution authority (or if no resolution authority has been designated, the lead supervisor of a CCP) should identify and contact relevant authorities regarding CMG membership within six months of the CCP being identified as SI>1 (using the FSB 2017 Guidance if membership is not stated in law/regulations).
- The first CMG meeting should be held within 12 months of the CCP being identified as SI>1 and should include a discussion on a draft CCP-specific Cooperation Agreement (CoAg).
- The CoAg should be finalised and signed within 18 months of the first CMG meeting.
- Resolution planning and resolvability assessments should be launched within 12 months of the first CMG meeting.
| CCP | Home Jurisdiction |
|---|---|
| BME Clearing | Spain (EU) |
| Cassa di Compensazione e Garanzia (CC&G) | Italy (EU) |
| CME Inc. | US |
| Eurex Clearing | Germany (EU) |
| EuroCCP | Netherlands (EU) |
| HKFE Clearing Corporation | Hong Kong SAR |
| ICE Clear Credit | US |
| ICE Clear Europe | UK |
| LCH Ltd | UK |
| LCH SA | France (EU) |
| Nasdaq Clearing | Sweden (EU) |
| Options Clearing Corporation (OCC) | US |
| SIX x-clear | Switzerland |
Other Policy and Analysis on CCPs
This report presents the outcome of evidence gathering and analysis on existing financial resources and tools for central counterparty (CCP) recovery and resolution.
16 November 2020
FSB, CPMI and IOSCO Chairs propose further work to be undertaken in 2021 on financial resources to further strengthen CCP resilience and resolvability.
9 August 2018
A study by standard-setters on the interdependencies between CCPs and clearing members and other financial service providers.
Update on the work by the FSB, CPMI, IOSCO and BCBS to strengthen the resilience, recovery and resolution of central counterparties.
22 September 2015
The 2015 CCP Workplan agreed by the FSB and SSBs to ensure effective coordination of policy work to make CCPs more resilient.
