The Depository Trust & Clearing Corporation (DTCC) has said it welcomes the release yesterday of new, more demanding international standards for payment, clearing and settlement systems.
The release by the Committee on Payment and Settlement Systems (CPSS) and the International Organisation of Securities Commissions (IOSCO) is designed to make the financial system more resilient and makes central clearing of standardised over the counter (OTC) derivatives mandatory. CPSS and ISOCO members are committed to adopting the standards by the end of the year with other financial market infrastructures (FMIs) being encouraged to adopt the new practices as soon as possible.
“We are currently reviewing the CPSS-IOSCO report in its entirety in order to assess its implications for market participants and for the overall operation of our financial infrastructure,” said the DTCC in a prepared statement. “We look forward to collaborating with our regulatory supervisors and with the industry in the implementation of these principles (i.e. standards) and the creation of a safer and more efficient market environment.”
DTCC is well placed to comment on the changes as it is the operator of the primary back-end infrastructure for US cash securities, owner of a central counterparty for equities in Europe, and possess a global trade repository for the OTC derivatives markets. As such it has been talking with CPSS-IOSCO throughout the process to provide comment and feedback on the new principles.
The clearing organisation says it supports CPSS-IOSCO's objectives of mitigating risk and strengthening FMIs and that it is “currently reviewing the CPSS-IOSCO report in its entirety in order to assess its implications for market participants and for the overall operation of our financial infrastructure”, adding that its “looks forward” to collaborating with its global regulatory supervisors and the industry to the implementation stage.
By Neil Ainger