U.S., UK regulators continue effort toward resolution of central counterparty (CCP); operational planning next

Issues relating to the concept of resolution of a central counterparty (CCP) — an entity that aims to help facilitate trading in various European derivatives and equities markets – was the focus of a virtual meeting Friday between banking regulators from the U.S. and United Kingdom (UK), the Federal Deposit Insurance Corp. (FDIC) said.

The FDIC said in a release that senior officials from the Bank of England, FDIC, Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission (SEC), and the Federal Reserve Board.

According to the FDIC, the meeting was one of a regular series involving senior agency leaders held since 2017 to “share views on CCP resolution and review the progress of an ongoing program of joint work among the agencies.”

Over the next year, the FDIC said, the group will continue to share analyses and discuss policy formulation in relation to CCP resolution. The agency said the objective is facilitating progression from the development of resolution strategies to detailed operational planning.

In the past three years, the FDIC said, work by the group has included a review of UK and U.S. legal frameworks for resolution and analysis of the rulebooks of major UK and U.S. CCPs. The agency said that facilitates the development of prototype resolution strategies for the CCPs. The work also has included consideration of the potential systemic impacts and operational challenges that might result from the use of resolution powers, the FDIC said.

Joint Release/Joint Readout of Principals Meeting of UK and U.S. Authorities Regarding Central Counterparty Resolution