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.
Documents (1) for FIA and ISDA respond to BoE’s consultation on operational resilience for CCPs
Latest
Expanding the Universe of Eligible VM
ISDA conducted a series of interviews with buy- and sell-side firms to understand the drivers of a growing use of non-cash assets as variation margin (VM) for non-cleared over-the-counter (OTC) derivatives and the barriers that remain to expanding the use...
ISDA Response on Hedge Accounting Guidance
On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity (HTM) debt securities, recognizing all Secured...
Joint Response to EBA Consultation
On August 12, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Banking Authority’s discussion paper on certain taxonomy key performance indicators (KPIs) and other aspects of the Disclosures Delegated Act under Article 8 of...
Response to JSCC on Clearing Fund Consolidation
On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support...