Release Number 7124-15

February 20, 2015

CFTC Staff to Host Public Roundtable on Recovery and Orderly Wind-Down of Derivatives Clearing Organizations

Washington, DC — Staff of the U.S. Commodity Futures Trading Commission (CFTC) will hold a public roundtable on March 5, 2015, from 9:00 a.m. to 5:00 p.m., to discuss issues related to recovery and orderly wind-down of Derivatives Clearing Organizations (DCOs). The goal of this roundtable is to gather views from a variety of stakeholders, including DCOs, their clearing members (futures commission merchants), and the customers of their clearing members (including money managers, end-users, and others).

The roundtable will be held in the Conference Center at CFTC's headquarters at Three Lafayette Centre, 1155 21st Street NW, Washington, DC. The discussion will be open to the public with seating on a first-come, first-served basis. Persons requiring special accommodations to attend the meeting because of a disability should notify Teresa Burroughs at (202) 418–5053. Members of the public may also listen by telephone and should be prepared to provide their first name, last name, and affiliation.

Listening information:

US Toll Free:


International Phone Number


Participants Passcode:


After the meeting, a transcript of the meeting will be published on the Commission’s website.

Members of the public wishing to submit their views on the topics addressed at the roundtable may do so electronically through the CFTC’s Comments Online Process and following the instructions on “How to Submit a Comment.”

All comments related to this roundtable must be submitted by April 6, 2015. All submissions provided to CFTC in any electronic form may be published on the Commission’s website without review and without removal of personally identifying information.

Tentative agenda for the public roundtable discussion (times are approximate):

9:00 a.m.

Opening Remarks

9:30 a.m.

First Session: Variation Margin Gains Haircutting.


a. What are the pros and cons of using this tool?

b. Can this tool be used more than once?

c. Are there processes or governance mechanisms that should be implemented to alleviate concerns regarding the use of Variation Margin Gains Haircutting too many times?


10:45 a.m.


11:00 a.m.

Second Session: Re-establishing a Matched Book


a. How can auctions be enhanced to promote a successful outcome?

    i. Can participation in the auction be broadened?

    ii. How can DCOs incentivize auction participation?

b. What tools should Systemically Important DCOs (SIDCOs) include in their viable recovery plans in the event of a failed auction?

    i. Forced Allocation

    ii. Complete Tear-Up

    iii. Partial Tear-Up

c. What are the risks arising from the use of these tools? Which participants (clearing members, customers) are affected, and how?

d. How can the risks to participants arising from the use of these tools be mitigated?

e. Are there processes or governance mechanisms that should be implemented to alleviate concerns regarding the use of the foregoing tools?

12:30 p.m.

Break for Lunch

1:30 p.m.

Third Session: Wind-down


a. Timing

    i. Is there a minimum amount of time following (1) a participant default or (2) some other point (e.g., the exhaustion of available resources, the failure of an auction) that should be required before the determination to wind-down is made?

    ii. What are the risks of delaying wind-down? How can these risks be mitigated?

    iii. What are the advantages and disadvantages of providing for a potential pause in service, prior to service termination?

b. Are there processes or governance mechanisms that should be implemented to alleviate concerns regarding the timing of the determination to wind-down?

c. What advance planning or arrangements would be most conducive to permitting a DCO to raise additional resources following the exhaustion of pre-funded and committed resources?

3:00 p.m.


3:15 p.m.

Fourth Session: Liquidity Risk Management.


a. What are the burdens that DCO recovery tools (e.g., rule-based requirements that participants provide liquidity) may place on participants?

b. What risks are presented?

    i. Performance risks.

    ii. Broader financial risks.

c. What is the magnitude of these risks? How can these risks be mitigated?

4:45 p.m.

Closing Remarks

For further information contact: Kirsten Robbins, Special Counsel, Division of Clearing and Risk, at (202) 418–5313 or [email protected].

Last Updated: March 16, 2015