The question of how to improve resilience in times of market stress is a big one – one that could benefit from industry-wide input. In a consultative report that aims to achieve resilience for the centrally cleared market ecosystem, the Basel Committee on Banking Supervision (BCBS), the Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI), and the International Organization of Securities Commissions (IOSCO) are subjecting 10 policy proposals to stakeholder input.
In a press release, the three organisations revealed that the paper aims to achieve resilience by improving the understanding of CCPs’ initial margin calculations and potential future margin requirements.
The report covers five main areas: CCP simulation tools, CCP disclosures, the measurement of initial margin responsiveness, governance frameworks and margin model overrides, and clearing member transparency. The 10 proposals share common themes that relate to CCPs and clearing members – for the former, on providing additional public disclosures on margin models and increasing the sophistication and accessibility of margin simulation tools; for the latter, on providing greater transparency to clients and the CCPs of which they are members.
The deadline for comments is 16 April 2024.