Some central counterparties (CCPs) have failed to implement international standards on risk management and recovery planning, global securities and banking regulators warned on Thursday.
CCPs have failed to adopt some of the measures recommended by regulators, according to a report published by the International Organization of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI),
“The failure of these CCPs to implement practices constitutes, in certain instances, serious issues of concern and warrants immediate attention,” the regulators caution in a news release.
IOSCO and the CPMI call on these critical components of financial market infrastructure to take action to address these shortcomings. “If a CCP has not fully implemented a comprehensive and effective recovery plan, it is a serious issue of concern that should be addressed with the highest priority,” they say.
The regulators also reiterate that CCPs should maintain sufficient liquidity to enable them to deal with, “a wide range of potential stress scenarios.” And, they note that the fact that this is still an issue for certain CCPs also remains a “serious issue” that should be addressed, “with the highest priority.”