The International Organization of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI) on Tuesday published a final framework for regulators to help guide the stress testing of central counterparties (CCPs).
The tests are intended to help regulators uncover the scope and magnitude of interdependencies between markets, CCPs and other market participants, such as dealers, liquidity providers, and custodians.
They also form part of global policymakers’ efforts in the wake of the financial crisis to identify and address any gaps, and potential financial stability risks, involving CCPs that are systemic across multiple jurisdictions.
Last June, IOSCO and the CPMI proposed a draft framework for public comment, and they also held a workshop with representatives from various market sectors and authorities from different jurisdictions.
The final framework incorporates the feedback received during those consultations.
Among other things, the feedback emphasized the importance of protecting the data used in these tests, the burden of carrying out the tests, and ensuring the transparency of the stress testing methodology and results.