On 15 March, FIA (jointly with ISDA) responded to proposed recovery tools issued by The Clearing Corporation of India Limited (CCIL). The recovery tools proposed by CCIL for end of default waterfall scenarios include the use of forced allocation, contract tear-ups and auction mechanisms. Whilst the associations welcome the development of a recovery framework by CCIL, the associations requested that CCIL reconsider some of its proposals including to remove the reserve price requirement during any auctions and to introduce a cap on member cash calls and assessments so that clearing members are not exposed to unquantifiable or potentially unmanageable risk. FIA has previously published recommendations for assessing and managing risks that arise from central clearing including recommended recovery measures. The full response to CCIL is available below.
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