CPSS-IOSCO working group on the review of the recommendations for central counterparties
22 July 2009
CPSS and IOSCO believe that the expansion of well designed centralized clearing and settlement can reduce systemic risk in financial markets.
The report has 15 headline recommendations which cover the major types of risks CCPs face. The report sets out the intended scope of application of these recommendations and their relationship with the Task Force report on Recommendations for Securities Settlement Systems (RSSS). It also includes a methodology for assessing implementation of the recommendations, which identifies key issues and key questions and provides guidance on the assignment of an assessment category.
The CPSS (Committee on Payment and Settlement Systems) and IOSCO believe that the expansion of centralized clearing and settlement is a positive development because, if well designed, CCPs can reduce systemic risk in financial markets. Accordingly, the relevant authorities for CCPs for OTC derivatives seek to ensure that each CCP meets the risk management standards set forth in the recommendations. However, applying the recommendations in practice can involve a significant degree of interpretation and judgment.
© IOSCO
