CFTC Proposed Rule: Risk Management Requirements for Derivatives Clearing Organizations
|FINAL RULE: This page refers to the proposed rulemaking on risk management requirements for DCOs. The CFTC final rule was issued at its October 18, 2011 open meeting.|
|Final Rule Issue||Effective Date||Effective Date, SIDCOs||Compliance Date, SIDCOs|
|October 18, 2011||January 9, 2012||October 15, 2013||December 31, 2013|
On December 16, 2010, the CFTC held an open meeting on the Eighth Series of Proposed Rules under the Dodd-Frank Act. Among the topics at this meeting was a rule proposal regarding the setting of risk management requirements for derivatives clearing organizations (DCOs). Significant requirements of the proposal:
- a requirement that a DCO must have a comprehensive written risk management framework, subject to internal audit, and a chief risk officer,
- requirements regarding the measurement of credit exposure (mark to market), margin (including methodology and coverage, independent validation, spread margins, price data, daily review and periodic back tests, and special provisions for customer margin),
- requirements of certain other risk control mechanisms, including risk limits, review of large trader reports, stress tests, swaps portfolio compression, and review of clearing members’ risk management policies and procedures,
- additional requirements for systemically important derivatives clearing organizations (SIDCOs) such as business continuity and disaster recovery plans must be designed and put in place.
Related Documents: Fact Sheet, Q&A, and Federal Register Entry
- Open Meeting on Eighth Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on March 2, 2011.