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SPEECHES & TESTIMONY

  • Statement of Support of Chairman Gary Gensler - Derivatives Clearing Organizations to Align with International Standards

    November 15, 2013

    I support the final rule to complete the process of bringing clearinghouse risk management rules in line with international standards.

    In the fall of 2011, the Commission adopted a comprehensive set of rules for the risk management of clearinghouses. These final rules were consistent with international standards, as evidenced by the Principles for Financial Market Infrastructures (PFMIs) consultative document that had been published by the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions (CPSS-IOSCO).

    In April of 2012, CPSS-IOSCO issued final principles. Based upon these final principles, it was appropriate to augment our rules in certain areas to meet those standards, particularly relating to systemically important clearinghouses.

    These final rules will implement the remaining items from the PFMIs in our clearinghouse rules. They will enable clearinghouses designated by the Financial Stability Oversight Council as systemically important (SIDCOs) to be qualifying central counterparties for the purposes of international bank capital standards. This permits banks and bank affiliates that are members (or customers of members) of the SIDCOs to benefit from favorable capital treatment for their exposures to these SIDCOs. The final rules also implement an opt-in mechanism to permit other clearinghouses to elect to be held to these additional standards, and thus benefit from the same capital treatment.

    Last Updated: November 15, 2013



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