The Commodity Futures Trading Commission has proposed additional standards for systemically important derivatives clearing organizations (SIDCOs) that are consistent with the Principles for Financial Market Infrastructures published by the Committee on Payment and Settlement Systems of the Bank for International Settlements (BIS) and the Board of the International Organization of Securities Commissions. The proposed rules include new or revised standards for governance, financial resources, system safeguards, default rules and procedures for uncovered losses or shortfalls, risk management, disclosure, efficiency, and recovery and wind-down procedures.
The proposed rules are designed to assure that SIDCOs will be deemed to be qualifying central counterparties (QCCPs) for purposes of international bank capital standards set by the BIS’ Basel Committee for Banking Supervision. The proposed rules would also allow a derivatives clearing organization (DCO) that is not a SIDCO to elect to opt in to the SIDCO regulatory requirements, thereby allowing the DCO to be deemed a QCCP.
The CFTC’s proposing release is available here.