September 12, 2022

CPMI and IOSCO Consider Issues on Access to CCPs and Effective Porting Practices

Nihal Patel Commentary by Nihal Patel

The Committee on Payments and Market Infrastructures ("CPMI") and IOSCO analyzed current market participants' access to central counterparties ("CCPs") and effective market practices.

In the Discussion Paper, which follows up on an earlier paper from November 2021, CPMI and IOSCO considered issues affecting "client" access to clearing services, in particular, the ability to port positions from one clearing member to another and the risks and benefits of new clearing models such as sponsored access and direct clearing.

The authors emphasized the need for CCPs to permit fair and open access to clearing services with reasonable risk-related participation requirements while also pursuing solutions to the shortcomings of traditional client clearing.

Commentary

While the Paper does not provide much in the way of prescriptions, it does a good job of highlighting some of the current issues in clearing services. Namely, how to respond to the fact that governments are continuing to expand clearing requirements at a time when clearing services are increasingly concentrated in a limited number of providers.

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