Derivatives Clearing Organizations Regulation - Comment Letter - JP Morgan - February 11, 2011

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Risk Management Requirements for Derivatives Clearing Organizations
February 11, 2011

From the comment letter:

JP Morgan "supports the CFTC proposed approach so long as clearing houses are required rather than simply being permitted, to scale their risk tolerance to clearing members in proportion to their respective capital levels." They argue that a cap on a member's minimum capital requirement does not impact the systemic stability of a clearing house as long as:

  • clearing members clear house and client business in proportion to their available capital;
  • clearing houses employ real-time risk management processes;
  • clearing houses hold a sufficient amount of margin and funded default guarantee fund; and
  • regulators monitor the ability of clearing members to meet their financial obligations with respect to all clearing houses of which they are members.

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