EMCF continues to work with all parties to reach solution
European Multilateral Clearing Facility (EMCF) welcomes the position of UK, Dutch and Swiss regulators in their joint Regulatory Position on Interoperability that was issued to market participants this month and which aims to establish a safe risk control mechanism on interoperable links between CCPs.
The regulators put forward requirements to be fulfilled when implementing interoperability links between CCPs. Through interoperability, additional risk is introduced between the CCPs (inter alia credit exposure). The regulators stipulate that credit exposures should be measured, monitored and mitigated by the collateral that interoperating CCPs hold. This requirement to mitigate inter-CCP credit exposure through margining is in addition to the collateral held to cover a counterparty risk a CCP runs on its members.
EMCF will continue to work with all parties to expedite the advent of interoperability and plans to meet with those CCPs involved so all parties may discuss and agree upon a common approach regarding such issues as choice of model and a contractual and legal framework.
”We will work to establish a model that mitigates any additional risks likely to be introduced in compliance with the new requirements,” said Jan Booij, ceo of EMCF.
EMCF endorses the interoperability objectives and will continue to pursue its current interoperability projects with LCH.Clearnet Ltd, SIS X-Clear and EuroCCP.
