A discussion paper on client clearing: access and portability

CPMI Papers  |  No 200  | 
29 November 2021

This CPMI-IOSCO consultative report aims to increase the common understanding of new access models, which enable clients to directly access CCP services, and effective porting, or transferring, practices for their positions. It also seeks to identify potential issues for follow-up work.

The client clearing process facilitates access to CCPs, particularly for firms – known as 'clients' – that are not direct participants in a CCP and must rely on intermediaries to indirectly clear their trades. Since some entities cannot, or choose not to, directly participate in a CCP, improving access to client clearing is critical to the success of the G20's objective to have all standardised over-the-counter (OTC) derivatives contracts cleared through CCPs. Against this background, the report considers the potential benefits and challenges – particularly risk management – of the new access models developed by CCPs.

At present, if a CCP member defaults, its clients' accounts need to be transferred to another CCP member or liquidated in a short time frame. Since forced liquidation is undesirable, the report identifies effective ways to support successful porting in this event.