CCP Risk archive
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FIA backs international effort to promote "effective practices" for variation margin
FIA has responded to a discussion paper released by international standard setters that sets out eight "effective practices" for streamlining variation margin in centrally cleared markets. The discussion paper addresses the need for greater transparency and understanding of margin practices at central counterparties, particularly in light of recent episodes of market volatility triggered by the COVID crisis and Russia's invasion of Ukraine.
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FIA responds to FICC access and segregation proposals
FIA has responded to the Fixed Income Clearing Corporation’s proposals to revise its customer clearing access models and to modify its margin segregation rules in order to implement the SEC’s new clearing mandate for U.S. Treasuries. FIA's response identifies conflicts between the proposed access structures and CFTC rules to which FCMs are subject.
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FIA responds to JSCC consultation on initial margin and clearing fund calculation methods
FIA has submitted a response to the Japan Securities Clearing Corporation’s consultation, which proposes to introduce stress add-on initial margin charges and a partial revision of the clearing fund calculation method in its listed financial derivatives clearing service.
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FIA calls on international regulators to continue progress on margin transparency
FIA has filed a letter with international standard-setting bodies urging further progress on efforts to increase the resilience of global derivatives markets in times of stress. The letter was submitted in response to a consultation on initial margin requirements in centrally cleared derivatives markets that was issued by Basel Committee on Banking Supervision (BCBS), the Bank for International Settlements' Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).
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CFTC advisory committee examines CCP resilience, FCM concentration and Treasury basis trade
The Commodity Futures Trading Commission's Market Risk Advisory Committee, a group consisting of representatives from exchanges, intermediaries, end-users and advocacy groups, held an open meeting on 9 April to discuss a wide range of current policy issues and market trends.
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FIA and ISDA recommend changes to Singapore’s capital framework for clearinghouses
On January 22, FIA and ISDA jointly responded to a consultation from the Monetary Authority of Singapore on proposed amendments to the capital framework for approved exchanges and approved clearinghouses.
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Navigating a New Era in Derivatives Clearing
In recent years, the landscape of global central counterparty margin models has witnessed a significant transformation in risk management. Central to this shift is the migration from the long-established Standard Portfolio Analysis of Risk (SPAN) model to various Value-at-Risk (VaR) based models for the purpose of calculating margin for exchange-traded derivatives.
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CFTC wrestles with new clearinghouse models
The Commodity Futures Trading Commission is attempting to update its regulatory framework for derivatives clearinghouses to address the rise of new business structures that integrate certain functions that previously were separated. The agency’s five commissioners disagree on the way forward, however, with some calling for moving forward one step at a time and others urging a slower, more comprehensive approach. Two pending proposals have brought these differences to light.
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CFTC Market Risk Advisory Committee discusses clearing firm consolidation, operational resilience, and CCP risk
The US Commodity Futures Trading Commission held a meeting of the Market Risk Advisory Committee on 11 December to discuss several current policy issues affecting the derivatives industry.
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FIA responds to Bank of England approach to discretionary payments by CCPs
FIA and ISDA have responded to the Bank of England's proposed statement of policy on discretionary payments by CCPs. The associations support the proposal but note they would welcome further guidance on how the BoE intends to consider the maintenance of public confidence in the UK financial system when using other supervisory and resolution powers.
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