18 June 2009

EuroCCP proposes Convention on Inter-operability for CCPs

EuroCCP called for the adoption of a single standard that all central counterparties would sign. The Convention would require CCPs to agree on risk management arrangements that are transparent to market users, platforms and regulators.

EuroCCP called for the adoption of a single standard Convention on Inter-operability that all central counterparties would sign, to accelerate the seamless connectivity across Europe.

 

The Convention, designed as a framework agreement, would require CCPs to agree on risk management arrangements that are transparent to market users, platforms and regulators.

 

"Although some progress has been made on inter-operability, there is insufficient transparency in how new risks caused by inter-operability are managed” Diana Chan, Chief Executive Officer of EuroCCP said claiming that it is not sufficient that costs come down through competition to realise the benefits envisioned by MiFID and the Code of Conduct.

 

"The arrangements among inter-operating CCPs must be robust, and complete transparency in how CCPs manage their exposure towards each other is important for systemic safety”, she said.

 

"While a number of Europe's CCPs, including EuroCCP, have announced plans to inter-operate, the negotiations are bilateral. Four CCPs inter-operating require six bilateral contracts. Six CCPs inter-operating will require 15 contracts," Chan said.

 

Press release

 

© EuroCCP