Global standard setters launched a consultation Monday on access to central clearing, which is crucial to one of the G20’s key post-financial crisis reforms — ensuring that over-the-counter (OTC) derivatives are centrally cleared as much as possible.
The Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions issued a joint consultation paper that examines new models for accessing central counterparties (CCPs) for firms that aren’t direct participants and use middlemen to clear their trades.
“Improving access to client clearing is critical to the success of the G20’s objective to have all standardized over-the-counter (OTC) derivatives contracts cleared through CCPs,” they said.
To that end, the paper aims to examine the potential benefits and challenges of the new access models being developed by CCPs, including ways to avoid forced liquidations in the event of a default.
The paper is out for consultation until Jan. 24, 2022.