23 August 2023

CPMI and IOSCO report highlights the need for central counterparties to have adequate resources and appropriate tools to address non-default

CCPs must have policies, procedures and plans to address NDLs in accordance with the Principles for Financial Market Infrastructures (PFMI) because, if not managed properly, the financial consequences of non-default events can threaten a CCP’s viability.

CPMI and IOSCO have today published a report on current central counterparty (CCP) practices to address non-default losses (NDL) arising, for example, from investment risk or cyber-attacks.
• CCPs must have policies, procedures and plans to address NDLs in accordance with the Principles for Financial Market Infrastructures (PFMI) because, if not managed properly, the financial consequences of non-default events can threaten a CCP’s viability.
• Given the wide range of CCP practices to address NDLs and industry requests for further clarifications, CPMI and IOSCO will work to identify areas where further guidance or recommendations may be useful. Further engagement with industry stakeholders will also be undertaken to inform a public consultation in the near term on further guidance or recommendations with respect to NDLs.
• Also published with this report is a cover note.

IOSCO

© IOSCO