CPMI-IOSCO discussion paper on non-default losses welcomed by FIA

4 August 2022

FIA welcomes a recent discussion paper on practices used by central counterparties to address non-default losses, such as losses from cyberattacks or system outages. The paper was published by two international standard-setters, the Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).

"The guiding principle for allocating non-default losses should be who manages the risk," said Jackie Mesa, FIA's Chief Operating Officer and Senior Vice President of Global Policy. "FIA is very pleased to see regulators addressing the transparency of how potential non-default losses at CCPs would be handled."

FIA's mission is to support open, transparent and competitive derivatives markets. Proper approaches to non-default losses are important to protecting and enhancing the resilience of the global financial system, and FIA has regularly engaged on this topic on behalf of its members. Most notably, this work includes a primer on the issue of non-default losses at clearinghouses, published in 2020 in partnership with the International Swaps and Derivatives Association (ISDA), that covers who should pay for what types of these losses as well as relevant resolution tools.

FIA intends to consult with its members regarding a potential response to the CPMI-IOSCO discussion paper.

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