The European Association of Central Counterparty Clearing Houses (EACH) urgedregulators to ensure incentives for the use of central counterparty clearing on its 20th anniversary meeting in Amsterdam. EACH welcomed the efforts by global regulators led byCPSS-IOSCO, the Basel Committee and the European authorities to implement rules thatwill encourage the use of central counterparty clearing.
Marcus Zickwolff, Chairman of EACH said “It is key for the fulfilment of the G20 commitment
to increase the use of CCP clearing, that there is not only a mandate to do so. The usage ofCCP clearing has to be attractive also from an economic point of view. The new Basel IIIrules should create these necessary incentives.”
Delegates of 23 CCP clearinghouses from both EU and non-EU countries highlighted thatinternational consistency on the application of global standards such as the CPSS-IOSCOPrinciples and Basel III rules should be ensured and that European CCPs should not besubject to tighter rules as their counterparts in the US and Asia.
The ultimate aim of these regulatory requirements is to provide the necessary assurancethat CCPs globally are robust enough to withstand major market shocks. Theimplementation of these requirements in Europe will be implemented via EMIR and CRD IV.CCPs are concerned that the new rules may require banks to hold more capital for CCPcleared trades than for equivalent trades which are bilaterally settled. EACH has repeatedlyurged the Basel Committee to adopt a risk-sensitive treatment of exposures to CCPs' defaultfunds and hopes that the final proposals will reflect this position.
Editors’ Notes
EACH was established in 1992. Membership is open to all entities incorporated in Europeand supervised as a central counterparty. It currently has twenty-three members.
As in its 20 years history, its aims are to discuss and analyse techniques and developmentsin central counterparty clearing operations, systems, position-keeping, risk managementtools (initial margining, re-valuation, membership requirements, default procedures andresources, money settlement arrangements, etc.) and legal and regulatory issues related tocentral counterparty clearing; to develop, as appropriate, frames of references of centralcounterparty clearing and risk management, and to publish those standards; to develop,with appropriate co-ordination (for example, with other associations such as ECSDA andFESE), positions on proposed European and global regulatory initiatives relative to centralcounterparty clearing; to provide a forum for the development of the personal contactsnecessary to ensure the exchange of risk-related information in times of potential difficulty;to monitor developments in payments, settlement and custody, as they have a bearing oncentral counterparty clearing; and to influence policymakers as the central counterparties´voice in Europe, and the voice of European central counterparties globally ensuring, as appropriate, a constructive working relationship with supra-national European and globalpublic authorities and global associations of central counterparty clearing houses.
For further information, visit http://www.eachorg.com.
