In recent comments to an ASX consultation on default management issues, FIA’s members are strongly in favour of consultations with a CCP’s wider membership on default management arrangements. FIA also supports the objective of an auction is to liquidate a defaulter’s portfolio without market disruptions. At the same me time, costs to the defaulter, the CCP and non-defaulting members should be minimised. In addition, the letter reminded ASX of the FIA and ISDA “Response to the CPMI-IOSCO discussion paper on central counterparty default management auction and FIA’s “Recommendations for CCP Risk Management” that includes recommendations on default management. ASX sought industry comments on the introduction of a new framework for auctioning exchange traded derivatives by ASX Clear (Futures) in the event a clearing participant defaults.
- Market Structure