Resilience of CCPs: CPMI-IOSCO publish reports on principles for financial market infrastructures

CPMI and IOSCO have jointly published two reports that aim to enhance the resilience of CCPs.

The first report looks at the implementation of principles for financial market infrastructures (PFMIs) as they relate to financial risk management and recovery practices. The report, which reviews financial risk management and recovery practices in place at a selected set of derivatives CCPs, finds that important progress has been made in implementing arrangements consistent with the PFMIs, but identifies some shortcomings that still need to be addressed. CPMI and IOSCO plan to jointly follow up in 2017 on CCPs' progress in addressing the most important issues identified in the report.

CPMI and IOSCO have also published a consultative report seeking comment on guidance for use by CCPs on certain principles and key considerations in the CPMI-IOSCO PFMIs relating to financial risk management for CCPs. CPMI and IOSCO seek feedback on five key aspects of a CCP's financial risk framework:

• governance;
• stress testing for credit and liquidity exposures;
• coverage;
• margin; and
• a CCPs' contribution of its financial resources to losses.

Comments to the consultation close on 18 October 2016.