Resilience and recovery of central counterparties (CCPs): Further guidance on the PFMI - consultative report

August 2016

CCPs have become increasingly critical components of the financial system in recent years, due in part to the introduction of mandatory central clearing for standardised over-the-counter derivatives in some jurisdictions. It is vital that each CCP is sufficiently resilient to withstand clearing member failures and other stress events, and that it has in place a credible recovery plan. 

The proposed guidance outlined in this consultative report provides further clarity and granularity on several key aspects of the PFMI to further improve CCP resilience. These are: governance, credit and liquidity stress testing, margin, a CCP's contribution of its financial resources to losses, and its coverage of credit and liquidity resource requirements. The report also proposes guidance that is intended to facilitate a CCP's development of its recovery plan by building on and reiterating certain aspects of the Recovery report.  

The guidance is not intended to create additional standards for CCPs beyond those set out in the Principles for financial market infrastructures (PFMI), but rather to provide a more granular description of how the CPMI and IOSCO expect the PFMI to be implemented by CCPs.

Published with this report is a cover note listing some of the specific issues on which the CPMI and IOSCO are soliciting input. Comments should be submitted by Tuesday 18 October 2016 via e-mail to both the CPMI Secretariat and the IOSCO Secretariat.