THE WORLD FEDERATION OF EXCHANGES RESPONDS TO US AGENCIES ON PROPOSED STANDARDISED APPROACH FOR CALCULATING THE EXPOSURE AMOUNT OF DERIVATIVE CONTRACT

18 March 2019

Hamilton, Bermuda – March 18, 2019:  THE WORLD FEDERATION OF EXCHANGES RESPONDS TO US AGENCIES ON PROPOSED STANDARDISED APPROACH FOR CALCULATING THE EXPOSURE AMOUNT OF DERIVATIVE CONTRACTS;

 

London, Monday 18 March 2019 – The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has responded to three US federal banking agencies on a proposed rule to update their standards for how firms measure counterparty credit risk posed by derivative contracts

 

The proposed rule, jointly issued by the Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), would update the way US authorities measure derivatives counterparty risk along the lines of the Basel Committee’s SA-CCR approach.

 

The WFE has responded to the consultation as follows:

 

 

Addressing the leverage ratio treatment of segregated client initial margin is a long-standing policy priority for the WFE.

 

 

Nandini Sukumar, Chief Executive Officer, WFE said: “We support the global implementation of SA-CCR, but this needs to be done in a way that looks at the problems linked to the leverage ratio treatment of segregated client initial margin. The risks associated with clearing member concentration must be addressed urgently.”

 

You can read the full response to the US authorities here.

 

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About the World Federation of Exchanges (WFE):

Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 200 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 37% are in Asia-Pacific, 43% in EMEA and 20% in the Americas. WFE exchanges are home to nearly 48,000 listed companies, and the market capitalisation of these entities is over $70.2 trillion; around $95 trillion (EOB) in trading annually passes through the infrastructures WFE members safeguard (at end 2018).

 

The WFE is the definitive source for exchange-traded statistics and publishes over 350 market data indicators.  Its free statistics database stretches back more than 40 years and provides information and insight into developments on global exchanges. The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities’ goals of ensuring the safety and soundness of the global financial system.  

 

With extensive experience of developing and enforcing high standards of conduct, the WFE and its members support an orderly, secure, fair and transparent environment for investors; for companies that raise capital; and for all who deal with financial risk. We seek outcomes that maximise the common good, consumer confidence and economic growth. And we engage with policy makers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system.

 

For more information, please contact:

 

Anna Watson

Head of Communications, The World Federation of Exchanges 

Email:     awatson@world-exchanges.org

Phone:   +44 20 7151 4137 / 7850 287 685

Twitter:   @TheWFE

 

 

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