In the report Central Counterparty Default Management Auctions – Issues for Consideration, the Committee on Payments and Market Infrastructures (CPMI) and the board of the International Organization of Securities Commissions (IOSCO) described issues for further industry work to consider the design and conduct of default management auctions. These issues were structured into three categories of work where the policy standing group of CPMI-IOSCO sought industry action.

• The first category includes several terminology and operational issues where there is broad industry consensus to support further development.
• The second category includes areas (governance of a central counterparty’s (CCP) default management process, use of traders in default management groups and the scope of client participation) where there may be differing views among clearing members, clients, CCPs and other stakeholders.
• The third category includes potential nascent and emerging practices (synchronizing default management processes and identification of potential hedges between CCPs) that may require further coordination and harmonization among the default management processes of multiple CCPs.

This paper – developed by CCP12, the European Association of CCP Clearing Houses (EACH), the Futures Industry Association (FIA) and ISDA – addresses the first category. The associations continue to work on the other two categories and remain in constant contact with authorities, with the aim of finding common ground where possible and to meet the authorities’ expectations.