FIA has responded to B3 Clearing's consultation proposing to amend rules regarding B3's recovery plan. As part of the recovery plan, the clearinghouse is proposing to include a final auction, giving market participants a last opportunity to assist it in returning to a matched book, as well as early settlement auction or tear-up provisions in case the final auction fails.
In the response, FIA emphasises that the current set of rules lack details and clear provisions regarding the standard default management procedures, which are triggered upon the default of members. Only when these default management procedures have failed, should the clearinghouse activate the recovery plan as proposed.
FIA recommends that default auction and other default management provisions prior to activating the recovery plan should be clearly established in its rules, including clarifying governance, transparency and market preparedness aspects, among other provisions.
Read the response in full.
