FIA and ISDA (together the “Associations”) welcome the Bank of England’s consultation paper (CP) on operational resilience of Central Counterparties (CCPs). We applaud the UK authorities for focusing on the operational resilience of the entire financial sector – including Financial Market Infrastructures (FMIs) such as CCPs. We agree with the Bank of England’s assessment that disruption to clearing markets is a financial stability issue and support the policy objective for CCPs to be operationally resilient to disruption events.  We also support the concepts of important business services and impact tolerances.

The Associations’ comments from the point of view of clearing members and their clients are:

• We believe that clearing members and their clients (collectively referred to as “clearing participants”) should have a voice in both identifying important business services and determining the impact tolerances.
• In addition, clearing participants should have a voice in determining the criteria for important business services. This is especially important as FMIs are very interlinked and no single FMI or market participant will have a view of how its service interplays with other FMIs and the wider market.
• Metrics on important business services should also be shared with affected clearing participants.
• Clearing participants should be included in testing.