Asian CCPs struggle to fully comply with CPSS-IOSCO principles
Pending finalisation of regulatory framework and tough-to-implement principles mean that Asian CCPs are unlikely to meet CPSS-IOSCO’s January 2013 deadline. July 27, 2012 | Magessan RajAlthough the Committee on Payment and Settlement Systems (CPSS) and the International Organisation of Securities Commissions (IOSCO) principles will be implemented on January 1st 2013, various signs seem to indicate that Asian clearing central counterparty clearing houses (CCP) are not quite ready, and will unlikely be unable to fully comply with all 24 CPSS-IOSCO requirements before the deadline. Designed to strengthen financial market infrastructures (FMIs) against future financial crises, the principles are targeted at systemically important payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories. Replacing three existing sets of international standards issued by CPSS and IOSCO between 2001 and 2004, these principles are aimed at providing more detailed guidance and broadening the scope of the standards to cover new risk-management areas and new types of FMIs, with financial markets expected to apply these principles in their infrastructures with guidance from their respective central banks and supervisory authorities by the end of 2012. Whilst ongoing efforts to update systems in many jurisdictions and execution of CPSS-IOSCO recommendations for clearing houses outlined in 2004 as part of Basel II meant that many clearing houses in Asia are already in a position to be compliant, the final requirements, published in April, involving areas such as liquidity levels, risk analytics and default management frameworks cannot be immediately met by all CCPs. Siddharta Roy, chief risk officer at Clearing Corporation of India (CCIL) said "I won't say CCIL is absolutely compliant at this point with everything that has been asked for in the recent CPSS-IOSCO principles. I doubt there will be anybody adhering to that standard to the last letter. It will be very difficult for any CCP to go by each of the questions that have been asked in the consultation document on assessment in let... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Asset Management, Trustees and Custodians, Markets & Exchanges, Regulation, Risk and RegulationTrustees Custodians and Depositories,Markets Exchanges,riskregulation,Risk and Regulation, Asset Management, Trustees and Custodians,Markets & Exchanges,Regulation,Risk and Regulation, Keywords:CPSS-IOSCO, CCP, FMI, CCIL, Siddharta Roy, JSCC, Takeshi Hirano CPSS-IOSCO, CCP, FMI, CCIL, Siddharta Roy, JSCC, Takeshi Hirano
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