U.S. derivatives regulators have finalized rules for systemically-important derivatives clearing firms, aligning them with international standards

The U.S. Commodity Futures Trading Commission (CFTC) announced Friday that it has finalized rules to establish additional standards for systemically important derivatives clearing organizations (SIDCOs). The final rules include requirements relating to governance, financial resources, system safeguards, special default rules and procedures, and risk management, along with added disclosure requirements, among other things.

The new rules, along with the existing rules for derivatives clearing firms, create regulations that are consistent with globally-agreed principles for financial market infrastructures, which were agreed by the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions (CPSS-IOSCO) last year.

Additionally, this means these clearing firms can continue to qualify as central counterparties under international bank capital standards, the CFTC notes.

“This permits banks and bank affiliates that are members (or customers of members) of the SIDCOs to benefit from favorable capital treatment for their exposures to these SIDCOs,” notes CFTC chairman, Gary Gensler. “The final rules also implement an opt-in mechanism to permit other clearinghouses to elect to be held to these additional standards, and thus benefit from the same capital treatment.”