The Basel Committee on Banking Supervision, the Bank for International Settlements Committee on Payments and Market Infrastructures, and the International Organization of Securities Commissions have published a final report setting out ten policy proposals aimed at increasing the resilience of centrally cleared markets in periods of stress by improving understanding, transparency and governance around centrally cleared initial margin. The package focuses on central counterparty disclosures, tools and governance, and on clearing member transparency for clients and CCPs. For CCPs, proposals include making margin simulation tools available to all clearing members and, where feasible, clients and prospective participants, with minimum functionality covering key stress scenarios and core initial margin plus main systematic add-ons; expanding qualitative disclosures on model choice, calibration parameters and add-on logic; and publicly describing anti-procyclicality tools and model components affecting responsiveness. Public quantitative disclosure standards would be enhanced with new breakdowns and contract-level backtesting, more granular variation margin statistics, and a new standardised margin responsiveness metric to be disclosed for the most relevant contracts per clearing service, with daily time series available to regulators on request. The report also proposes internal CCP frameworks for assessing responsiveness alongside margin coverage and cost, stronger governance and reporting around discretionary model overrides, and clearer clearing member disclosures to clients where client margin deviates from CCP margin, as well as information-sharing with CCPs and authorities on multi-CCP exposures and liquidity needs. The final proposals incorporate feedback on the January 2024 consultative report, for which the consultation closed in April 2024. The relevant standard-setting bodies will consider how best to implement the ten proposals.
Bank for International Settlements - Committee on Payments and Market Infrastructures 2025-01-15
Basel Committee on Banking Supervision, BIS Committee on Payments and Market Infrastructures and IOSCO finalise ten proposals to improve initial margin transparency and responsiveness in centrally cleared markets
The Basel Committee on Banking Supervision, the BIS Committee on Payments and Market Infrastructures, and IOSCO have issued a final report with ten policy proposals to strengthen the resilience of centrally cleared markets by enhancing understanding, transparency and governance of centrally cleared initial margin. The package focuses on expanded central counterparty disclosures, margin simulation tools, enhanced quantitative reporting, stronger governance of model overrides, and clearer clearing member disclosures. The standard-setting bodies will now consider how best to implement the proposals.