CCP12 has in place Working Groups to facilitate the discussion and development of responses to regulatory and other industry consultations impacting CCP roles, responsibilities and activities.
CCP12’s public submissions to industry consultations will be made available here.
CCP12 responds to CFTC’s Notice of Proposed Rulemaking on Governance Requirements for DCOs
CCP12 responds to the SEC’s Proposed Rule on Clearing Agency Governance and Conflicts of Interest
CCP12 responds to CFTC’s Request for Information on Climate-Related Financial Risk
In the response to CFTC’s Notice of Proposed Rulemaking on Governance Requirements for DCOs (Link), CCP12 – The Global Association of Central Counterparties – generally agrees with the NPR’s proposed rule text with a few comments that are primarily technical in nature, such as that the CFTC should not propose further requirements beyond what is included in the proposed rule text. Several of the proposed additional governance requirements contemplated in the requests for comment are not suitable for all DCOs, given differences in size, ownership and management structures, market participants served, and mix of products cleared. Furthermore, CCP12 believes, that it is imperative to ensure that market participants’ involvement in DCO governance is limited to risk-based input into the DCO’s risk management decisions.
In the response to the Securities and Exchange Commission’s Proposed Rule on Clearing Agency Governance and Conflicts of Interest (Link), CCP12 welcomes that the Commission intends to continuously improve the safety and transparency of the financial markets. At the same time, we believe that some of the Proposed Rule regarding the governance and conflicts of interest of clearing agencies may be too prescriptive, given the diversity among clearing agencies and the need for these organizations to tailor their structures and governance for the markets and products they clear. CCP12 observes that clearing agencies have performed exceptionally well historically, even during periods of market stress. As such, it is unclear to us what specific issues or problems the Proposal is trying to address. We also worry that complying with the Proposed Rule would likely be much more operationally burdensome and resource-intensive for clearing agencies than the document seems to envisage.
October 2022 | CCP12 responds to CFTC’s Request for Information on Climate-Related Financial Risk
In the response to CFTC’s Request for Information on Climate-Related Financial Risk (Link), CCP12 – The Global Association of Central Counterparties – emphasizes, that any work with respect to climate-related financial risks recognizes and builds upon the various practices that CCPs already employ to effectively mitigate and manage climate-related financial risk. This is illustrated, by examples of how CCP risk management frameworks already take into account both categories of climate-related financial risks – physical and transition risks. To underline the flexibility of CCPs to tailor their risk management practices to the unique risks inherent in their markets and the products they clear, CCP12 advocates for a principles-based regulatory framework for CCPs and does not believe that additional regulatory requirements for CCPs that are specific to climate-related financial risks should be adopted. Furthermore, CCP12 believes that CCPs are best suited to appropriately design their stress testing frameworks and size their financial resources to capture the unique risks inherent in the products they clear, as is evidenced by their successful navigation of various stress events, both recent and historical ones. Lastly, CCP12 continues to emphasize that any approach taken by the CFTC related to climate-related financial risk- disclosures should be flexible (i.e., outcomes-based) to permit each CFTC-regulated entity, including CCPs, to use such data points and other information in the manner most appropriate to their roles in the marketplace.
In the response to CPMI and IOSCO A discussion paper on central counterparty practices to address non-default losses (Link), CCP12 opposes additional standards or guidelines for addressing NDLs as we think that PFMIs already provide a solid foundation for risk management practices, including for NDL-related risks. We find the PFMIs comprehensive, while not being overly prescriptive. We also think the CCP survey results presented in the discussion paper do not provide evidence for the need for further work in this area. CCP12 believes that CCPs’ history and past performance, particularly in times of unprecedented stresses, already demonstrate their resilience and ability to effectively manage the risks they face, including NDL-related risks. At the same time, we can appreciate that information sharing and the exchange of views among CCPs on practices relating to NDLs can be beneficial and we would support efforts to increase the dialogue and information sharing and encourage CPMI-IOSCO to bring together industry participants to share practices through organising workshops or tabletop exercises. In addition, our view is that the CCPs’ and their regulators’ main emphasis in the realm of management of NDL-related risks should continue to be on CCPs’ taking the appropriate preventative measures that mitigate the likelihood of NDLs and any attempt to shift the focus from NDL prevention to the CCPs’ amassing more financial resources to cover NDLs will most likely not help to prevent NDLs, or deal with them effectively. We also highlight that it is of the utmost importance that CCPs comply with the PFMIs as implemented in their local jurisdictions, and enforced by their local regulators.
In the response to the ESMA Consultation Paper on the clearing and derivative trading obligations in view of the 2022 status of the benchmark transition (Link), CCP12 welcomes the changes proposed by ESMA. We fully agree that the introduction of the single currency OIS class referencing TONA (JPY) with maturities up to 30Y to the scope of the CO and the expansion of the maturities for the OIS class referencing SOFR (USD) within that scope are steps in the right direction. The benefits of central clearing have been proven and recognised over the years, as protecting market participants from the bilateral non-centrally cleared risks they were exposed to during the Global Financial Crisis. The decision-making process regarding whether to include the OTC derivatives referencing the RFRs in a CO should be straight-forward, as “this is about accompanying a transition where the products are broadly similar but with different benchmarks”. The transition to RFRs is a realisation of global benchmark reform which further increases the markets’ safety and reliability, therefore the CO determination should be consistent with this reform.
In the response to the Bank of England’s Consultation paper on the fees regime for incoming central counterparties (Link), CCP12 expresses concerns that the Bank’s proposal is inconsistent with global best practices of major jurisdictions and introduces fees which in some cases would be excessively high (especially for smaller and mid-sized CCPs). We are also worried about a certain level of unpredictability of fees which would be charged in the next fee years – in the current model CCPs might not have enough time to appropriately budget for the fees (especially due to the possibility of their adjustment taking place later in the year). If some CCPs are deterred from applying for recognition with the Bank due to the high level of fees or predictability issues, this may cut off UK entities from accessing some non-UK CCPs and have negative consequences resulting from the lack of the QCCP status of some CCPs the services of which the UK entities might be using.
August 2022 | CCP12 responds to the OECD Progress Report on Amount A of Pillar One
In the response to the OECD Progress Report on Amount A of Pillar One (Link), CCP12 calls again for an explicit exclusion of CCPs from the scope of application of Amount A. CCPs are highly regulated entities, subject to local regulatory requirements in their home jurisdictions that are consistent with international standards (such as PFMIs ). CCP12 is of a strong view that the exclusion should be based on the merit of the policy priorities and the special role CCPs play in the markets. Excluding different types of financial institutions (which are participants of the same system and which enjoy the benefits of central clearing) but not financial market infrastructures such as CCPs, which are some of the most strictly regulated and supervised ones and which facilitate the functioning of the financial markets and make them safer, would create an unlevel playing field and an unjustified and very unwelcome gap in the taxation rules.
In its response to the Bank of England Consultation Paper on Outsourcing and third-party risk management: Central Counterparties (Link), CCP12 – The Global Association of Central Counterparties – provide its views and comments to the different areas in the proposal to the draft Supervisory Statement.
In its response to the CFTC Proposed Rule on Clearing Requirement Determination for Interest Rate Swaps To Account for the Transition From LIBOR and Other IBORs to Alternative Reference Rates (Link), CCP12 commends the CFTC for broadly taking into account the feedback received in the previous consultation round from CCP12 and some of its members. We generally welcome the Proposed Rule, emphasise the importance of central clearing, stress the role of CCPs in market transition to RFRs and notice the voluntary move of market participants to use the CCPs’ services in this regard.
In the response to the OECD Public Consultation Document “Pillar One – Amount A: Regulated Financial Services Exclusion” (Link), CCP12 calls for an explicit exclusion of CCPs from the scope of application of Amount A. CCPs are highly regulated entities, subject to local regulatory requirements in their home jurisdiction that are consistent with international standards (i.e., PFMIs ) are driven by the G20 and other multilateral organisations. Thus, they should be subject to the same exclusion as currently envisaged for Regulated Financial Institutions (including Depositary Institutions, Mortgage Institutions, Investment Institutions, Insurance Institutions, Asset Managers, Mixed Financial Institutions and RFI Service Entities). It is very important to appropriately design a taxation framework for CCPs, as has also been emphasised by the IMF.
In the response to the CFTC Request for Comment on FTX Request for Amended DCO Registration Order (Link), CCP12 raises numerous concerns regarding FTX’s proposed clearing model (i.e., offering direct clearing to retail and other participants for margined derivatives products) and the many risks that stem from this proposal. If approved by amending FTX’s registration order, this would represent a radical change in the clearing landscape, which would have far-reaching consequences for many stakeholders, including other CCPs, market participants, end/retail clients and the economy as a whole.
In the response to the FSB, CPMI and IOSCO Report “Central Counterparty Financial Resources for Recovery and Resolution” (Link), CCP12 emphasises that no further work on CCP resources is necessary, as affirmed by the results of the scenario analysis covered in the Report. The group stresses the implausibility of both – default and non-default scenarios and the fact that despite it, CCPs performed overall very well. We also argue that requiring CCPs to provide additional resources would be a wrong idea – not only would they not alleviate many NDL types of risks but would also distort the incentive structure for DLs. If the SSBs nevertheless decide to continue work on CCP resources, CCP12 is ready to engage and provide its expertise in the process.
In CCP12’s response to ESMA’s call for evidence on an approach to Climate Risk Stress Testing of Central Counterparties [Link], CCP12 provides it’s views on this important topic as it recognizes the importance of mitigating the potential risks and impacts of climate change and the need for CCPs to consider both direct and indirect impacts, such as on their members.
In CCP12’s response to ESMA’s consultation paper on the review of RTS No 153/2013 with respect to procyclicality of margin (ESMA consults on CCP anti-procyclicality measures (europa.eu)), CCP12 provides it’s views on ESMA’s suggestion on APC margin measures for CCPs. CCP12 emphasizes the performance of CCPs during the crisis and suggest that improvements should be reviewed on a more holistic basis across financial markets, it is stressed that standardization and homogenization is needed in the bilateral markets and not for APC margin measures used by CCPs, it is argued that an incorporation and enhancement of provisions of the existing Guidelines into the RTS is necessary, CCP12 urges ESMA to not apply an overly prescriptive approach, but rather leave it to EU CCPs what APC measures and practices are appropriate and ESMA is asked to coordinate its efforts with other international standard setting bodies rather than moving forward separately. Lastly, CCP12 highlights the transparency of CCPs but also emphasize our support for future efforts on transparency, especially for the uncleared market and the practices of Clearing Members (MPPQDs).
In the response to the Bank of England’s Consultation Papers on (1) the Bank of England’s approach to tiering incoming central counterparties under EMIR Article 25 (Link) and (2) the Bank of England’s approach to comparable compliance under EMIR Article 25a (Link), CCP12 welcomes the BoE’s intention to commit to an approach of regulatory deference to tiering incoming CCPs and comparable compliance, voices concerns over the initial triage criteria, proposes that the scope of UK CMs should exclude non-UK affiliates and disagrees with the subjective nature of the systemic risk assessment. CCP12 also asks for clearer criteria which would have a clear nexus to the UK and for more clarity on the timeline and on what actions CCPs should undertake next.
In the response to the CPMI and IOSCO discussion paper on client clearing: access and portability (Link), CCP12 agrees that no further guidance on the PFMIs is necessary in the context of the new client clearing access models and client porting. CCP12 also stresses that direct and sponsored access models still need time to mature and become more widely used, that it is important to address local regulatory hurdles, e.g. by promoting the porting of clients’ positions and assets and that a regulatory deference approach globally would be welcome. CCP12 expresses its readiness to engage in cooperation with the international Standard-Setting Bodies in order to work out what actions need to be taken in order to make porting robust and/or more effective in the jurisdictions where porting is currently not a viable or likely option of dealing with a CCSP default.
In CCP12’s response to the BCBS, CPMI, IOSCO joint Consultative Report on Review of Margining Practices [Link], CCP12 provides its views on the performance of CCPs during the Covid-related stress events, which mitigated counterparty credit risk, ensured robust mark-to-market and collateralisation through the stress event, and on CCPs practices, which were appropriately anti-procyclical and as such, CCPs successfully supported the stability of their respective markets and the financial markets in general. Furthermore, CCP12 refers to the significant transparency already provided by CCPs, including on margining and emphasizes its advocacy of CCPs’ transparency, given its benefits for risk management. CCP12 furthermore emphasizes its support for future efforts on transparency especially for the non-centrally cleared market and the practices of intermediaries and requests that the data and information relating to non-centrally cleared markets be improved. A concept paper for Market Participant Public Quantitative Disclosures has been attached.
January 2022 | CCP12 responds to ESMA’s Consultation Papers on CCP resolution regime
In CCP12’s response to ESMA’s consultation papers on CCP resolution regime, CCP12 provides views on the content of CCP resolution plans [Consultation Paper on draft RTS on the content of CCP resolution plans (europa.eu)], the methodology to value each contract prior to termination [Consultation Paper on draft Guidelines on Methodology to value each contract prior to termination (europa.eu)], valuation of CCPs assets and liabilities in resolution [Consultation Paper on draft RTS on Valuation of CCPs assets and liabilities in resolution (europa.eu)], and the application of the circumstances under which a CCP is deemed to be failing or likely to fail [Consultation Paper on draft Guidelines on the application of the circumstances under which a CCP is deemed to be failing or likely to fail (europa.eu)].
In the response to the CFTC Request for information and comment on the Swap Clearing Requirements To Account for the Transition From LIBOR and Other IBORs to Alternative Reference Rates [Link], CCP12 generally supports the CFTC’s effort to establish the new clearing mandates to reflect the transition of swaps referencing LIBOR to the relevant Risk-Free Rates, emphasizes the importance of clearing and supports a smooth transition, which is aligned between global standard setting bodies and regulators in different jurisdictions across the world.
In CCP12’s response to Bank of England’s Discussion Paper on Supervisory Stress Testing of Central Counterparties, CCP12 provides it’s views on the importance of Supervisory Stress Tests.
In CCP12’s response to CPMI and IOSCO Consultative Report on Application of the PFMIs to stablecoin arrangements CCP12 highlighted the importance of subjecting stablecoin arrangements to PFMIs, with a special emphasis on the need to make them very transparent entities.
November 2021 |CCP12 responds to China Futures Law Public Consultation
November 2021 |CCP12 responds to China Futures Law Public Consultation in Chinese
In CCP12’s response to the China Futures Law Public Consultation CCP12 highlighted the importance of regulatory deference for comparable regulatory and supervisory frameworks. We also attach the Chinese version.
In CCP12’s response to the BoE’s Consultation Paper on Derivatives clearing obligation – introduction of contracts referencing TONA Derivatives clearing obligation – introduction of contracts referencing TONA: Amendment to BTS 2015/2205 | Bank of England CCP12 provides views on the proposal to introduce a clearing obligation for OIS that reference TONA.
September 2021 |CCP12 responds to ESMA’s Consultation Papers on CCP recovery regime
In CCP12’s response to ESMA’s consultation papers on CCP recovery regime, CCP12 provides views on the methodology for calculation and maintenance of the additional amount of pre-funded dedicated own resources [Consultation on Draft RTS on the methodology for calculation and maintenance of the additional amount of pre-funded dedicated own resources (europa.eu)] conditions for recompense [Consultation on Draft RTS on order of compensation art. 20 (europa.eu)], circumstances for temporary restrictions in the case of a significant non-default event in accordance with Article 45a of EMIR [Consultation on Draft Guidelines further specifying the circumstances for temporary restrictions in the case of a significant non-default event (europa.eu)], consistent application of the triggers for the use of Early Intervention Measures (Article 18(8) CCPRRR) [Consultation on Draft Guidelines on the consistent application of the triggers for the use of Early Intervention Measures (europa.eu)], CCP recovery plan indicators (Article 9(5) CCPRRR) [Consultation on the Draft Guidelines on CCP recovery plan indicators (europa.eu)], CCP recovery plan scenarios (Article 9(12) CCPRRR) [Consultation on the Draft Guidelines on CCP recovery plan scenarios (Article 9(12) CCPRRR) (europa.eu)], and factors that shall be considered by the competent authority and the supervisory college when assessing the CCP recovery plan (Article 10(12) CCPRRR) [Consultation on Draft RTS further specifying the factors that shall be considered by the competent authority and the supervisory college when assessing the CCP recovery plan (europa.eu)].
In CCP12’s response to ESMA’s consultation on the clearing and derivative trading obligations in view of the benchmark transition, CCP12 provides views on the proposals to adapt the clearing mandates to reflect the transition to the new Risk-Free Rates preparing for the cessation of the GBP and JPY LIBORs and EONIA.
In CCP12’s response to the HM Treasury’s consultation entitled “Expanded Resolution Regime: Central Counterparties”, CCP12 provides views on the proposed scope of the NCWO safeguard, the proposed second tranche of skin-in-the-game, the proposal to limit the statutory VMGH power to default loss scenarios and the proposed compensation process.
In the CCP12 response to FSB’s discussion paper on ‘Regulatory and Supervisory Issues Relating to Outsourcing and Third-Party Relationships’, CCP12 shares the CCP’s perspective on this important topic.
In the CCP12 response to OECD‘s consultation entitled “Public Consultation Document Reports on the Pillar One and Pillar Two Blueprints“, CCP12 shares the perspective in relation to the exclusion of CCPs and provides reasons warranted on the basis of the key attributes.
In the CCP12 response to FSB consultation entitled “Guidance on financial resources to support CCP resolution and treatment of CCP equity in resolution“, CCP12 provides comments on adjusting the treatment of CCP equity, scenarios for a financial resources assessment and urges the FSB to avoid undermining the incentives structure of the central clearing model.
July 2020 | CCP12 responds to European Commission Delegated Acts on EMIR 2.2
CCP12 provides responses to “EU Commission’s Delegated Regulations” and emphasizes its support on the steps taken in the tiering process, towards regulatory deference, and towards reducing overall fees, simplifying the fee structure, and providing for proportionality and transparency.
In the CCP12 response to the “ESMA consultation paper on Procedural rules for penalties imposed on Third-Country CCPs, TRs and CRAs”, CCP12 comments on ESMA’s procedures to impose fines and penalty payments on TC-CCPs, and provides additional technical comments on the procedures proposed in the Consultation Paper.
In the CCP12 response to the CFTC consultation on its SNPR regarding Exemptions from Derivatives Clearing Organization Registration, CCP12 supports the CFTC’s efforts to codify the existing regulatory framework for exempting clearing houses from the DCO registration requirements, makes comments on the supplemental notice of proposed rulemaking, and recommends that the CFTC finalize its current proposals under the SNPR.
In the CCP12 response to the CFTC consultation on its NPR regarding Registration with Alternative Compliance for Non-U.S. Derivatives Clearing Organizations, CCP12 supports the CFTC’s efforts to codify the supervisory approach outlined in the CFTC’s White Paper for cross-border swaps regulation version 2.0.1. CCP12 makes comments on the notice of proposed rulemaking and recommends that the CFTC finalize its current proposals under the NPR.
August 2019 | CCP12 responds to CPMI-IOSCO discussion paper on CCP auctions
In the CCP12 response to the CPMI-IOSCO discussion paper entitled “Central Counterparty Default Management Auctions”, CCP12 provides views from different aspects around CCP default management auctions.
July 2019 | CCP12 responds to ESMA consultations
In the CCP12 response to the ESMA’s Consultation Paper on “Technical Advice on Comparable Compliance under article 25a of EMIR”, CCP12 emphasizes its view that an approach of mutual regulatory deference is of the utmost importance in adopting an approach of comparable compliance, and provides comments on comparable compliance, on ESMA fees for TC-CCPs and on criteria for tiering.
In the CCP12 response to the FSB Discussion Paper entitled “Financial resources to support CCP resolution and treatment of CCP equity in resolution”, CCP12 supports an agreed framework that benefits CCPs, regulators, and the financial markets at large, and shares the CCP perspective on these important topics.
In the CCP12 and EACH response to the “BCBS Consultative Document: Leverage ratio treatment of client cleared derivatives”, CCP12 and EACH believe that appropriate actions should be taken to address the shortcomings of the Leverage Ratio with respect to centrally cleared derivatives and make suggestions on these topics.
September 2018 | CCP12 Response on FSB DAT Incentives to Clear Consultation
In the CCP12 response to the FSB DAT’ report “Incentives to centrally clear over-the-counter (“OTC”) derivatives: A postimplementation evaluation of the effects of the G20 financial regulatory reforms”, CCP12 provides comments on different sections of the report.
August 2018 | CCP12 Response on FSB Cyber Lexicon
In the CCP12 response to the “FSB Cyber Lexicon consultative document”, CCP12 emphasizes its support on the development of a cyber lexicon, and provides comments to the questions, and proposes the inclusion of new terms.
May 2018 | CCP12 Response to US Agencies Consultation re SLR Standards
In the CCP12 response to the US Agencies Consultation re SLR Standards, CCP12 supports the Agencies initiative to modify the enhanced supplementary leverage ratio (“eSLR”) and shares comments about how the current leverage ratio framework negatively impacts central clearing.
February 2018 | CCP12 Response draft Guidelines on Anti-Procyclicality Margin Measures for CCP’s
In the CCP12 response to the “ESMA Consultative Paper on Anti-Procyclicality margin measures for CCPs”, CCP12 supports the objective of assessing and managing procyclicality holistically, cautions against an overly prescriptive approach, supports efforts to enhance transparency around risk management practices, and makes specific responses to further topics.
September 2017 | CCP12-EACH Response Supervisory Stress Testing
In the CCP12 and EACH response to the “Framework for supervisory stress testing of central counterparties (CCPs)”, CCP12 and EACH provide several key recommendations. The associations believe that CCPs must play an integral role in the design, implementation and ongoing re-assessment of the SST framework.
August 2017 | CCP12 Response Harmonization of Critical OTC Derivatives Data Elements
In the CCP12 response to the CPMI-IOSCO’s Consultative report “Harmonisation of critical OTC derivatives data elements (other than UTI and UPI) – third batch”, CCP12 provides comments for incorporating specific examples pertaining to each data element, eliminating the use of padded zeros and utilizing industry standard.
March 2017 | CCP12 Response FSB CCP Resolution Planning
In the CCP12 response to the FSB consultation paper “Guidance on Central Counterparty Resolution and Resolution Planning”, CCP12 provides comments on specific areas of interest and shares the CCP’s perspective on this important topic.
February 2017 | CCP12-EACH Response FSB Continuity of Access to FMIs
In the CCP12 and EACH response on the FSB consultation “Guidance on Continuity of Access to FMIs for a Firm in Resolution”, CCP12 and EACH provide comments on aspects that include: Affiliate Resolution and Resolution Authority Guarantee.
October 2016 | CCP12 Response FSB Consultation on CCP Resolution
In the CCP12 response to the FSB discussion note “Essential Aspects of CCP Resolution Planning”, CCP12 provides comments on the following aspects: responses to specific questions, incentive effects of resolution strategies, additional incentives, and timing of entry into resolution.
October 2016 | CCP12 Response CPMI IOSCO CCP Resilience and Recovery
In the CCP12 response to the CPMI-IOSCO consultation report “Resilience and recovery of central counterparties (CCPs): Further guidance on the PFMI”, CCP12 emphasizes the benefits of a principles-driven guidance regulatory directives set at a global level and provides comments on governance, stress testing, coverage, margin and CCP contributions.
July 2016 | CCP12 letter to HKMA on consultation re implementation on Basel III LR Framework
In the CCP12 response to the HKMA on consultation “Implementation of Basel III Leverage Ratio Framework”, CCP12 provides comments on a number of different aspects which include Increased Systemic Risk and Margin Period of Risk.
July 2016 | CCP12-EACH Response Revisions to the Basel III Leverage Ratio Framework
In the CCP12 and EACH response to the “Basel Committee on Banking Supervision consultation document Basel III Leverage Ratio Framework”, CCP12 and EACH provide recommendations on Increased Systemic Risk and Margin Period of Risk.
June 2016 | CCP12 Response Single Counterparty Credit Limits for Large Banking Organizations
In the CCP12 response to the Federal Reserve System’s Proposed Rule “Single-Counterparty Credit Limits for Large Banking Organizations”, CCP12 emphasizes its support to the proposal to exempt CCPs that meet the definition of a QCCPP.