CFTC Public Roundtable to Examine CPMI-IOSCO Guidance on CCP Resilience and Recovery

The Committee on Payments and Markets Infrastructures and IOSCO requested comments on guidance published in two collaborative reports. The guidance is intended to (i) enhance the resilience of central counterparties, and (ii) outline implementation of the "Principles for Financial Market Infrastructure."

IOSCO and the Committee on Payments and Market Infrastructures published its third update to the Level 1 assessments of implementation monitoring of the Principles for Financial Market Infrastructures.

CFTC Chair Timothy Massad urged global regulators to "take a holistic perspective" regarding central counterparty regulation and to "consider the overall system, its overall resilience, and its ability to respond if there is a problem."

The CFTC and the European Securities and Markets Authority ("ESMA") signed a Memorandum of Understanding regarding ESMA's recognition of U.S. derivatives clearing organizations as central counterparties.

The Clearing House and ISDA identified key issues for regulators to consider in the development of a comprehensive resolution framework for systemically important central counterparties.

The CFTC determined that certain EU rules provide sufficient basis for comparability with certain regulatory obligations applicable to derivatives clearing organizations that are registered with the CFTC and are authorized to operate as central counterparties in the EU.

Finance Professor Craig Pirrong claimed that central clearing mandates do not reduce systemic risk. In a post titled "Clearing Angst: Here Be Dragons Too," he stated that central clearing has forced banks and regulators to resort to "extraordinary measures" to supply liquidity and respond to systemic stresses.

Federal Reserve Bank of Chicago Senior Policy Specialist Ivana Ruffini cautioned that the "concentration of risk in [central counterparties] must not be underestimated, as CCP failures, while rare, do happen."

CFTC Chair Timothy Massad highlighted progress on (i) a common approach to transatlantic central clearing counterparties, (ii) a rule on margin for uncleared swaps, (iii) improving domestic and international clearinghouse resiliency, and (iv) proposals to strengthen cybersecurity.

The CFTC reached an agreement with the European Commission on a common approach to requirements for central clearing counterparties ("CCPs").

CFTC Chair Timothy G. Massad cited financial resilience to "demonstrate the reforms we put into place are working." In a speech at the Fifth Annual Conference of the Office of Financial Research-Financial Stability Oversight Council, Chair Massad covered clearinghouse resiliency and swap data reporting and looked ahead at the CFTC agenda relating to emerging risk.

CFTC Chair Massad outlined regulators' ongoing efforts with central clearing. He provided an overview of the regulatory framework in an evolving market.

The Committee on Payments and Market Infrastructures ("CPMI") and IOSCO announced that they began the first Level 3 Assessment of the implementation of the principles for financial market infrastructures ("PFMI").

The Committee on Payments and Market Infrastructures ("CPMI") and IOSCO are reviewing central counterparty ("CCP") stress testing.

CFTC Chair Timothy Massad spoke at the Future Industry Association Conference in Boca Raton. In his keynote address, Chair Massad focused on ways the CFTC addresses clearinghouse resiliency.

The Committee on Payment and Settlement Systems ("CPSS") and the International Organization of Securities Commissions ("IOSCO") have started the process of monitoring implementation of the Principles for Financial Market Infrastructures ("PFMIs").