On 8 September 2022, the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report ‘Client clearing: access and portability’. The report considers the benefits and challenges of new access models to central counterparty (CCP) clearing and client-position portability.

The report:

  • Describes “direct” and “sponsored” access models and the features that distinguish the models from each other and from the traditional client clearing model. The report notes that these new access models introduce new challenges and a new distribution of risks among different kinds of participants. They require CCPs and participants to consider new risks (e.g. the risks related to the “sponsor” and “sponsored member” default). Incentives for participation in these new models are considered in conjunction with potential  barriers to uptake. Forward-looking perspectives and actions that industry may take to facilitate further use of these models are also included.
  • Discusses potentially effective porting practices, focusing in particular on alternative or backup client clearing service provider arrangements and game plans. Payment mechanisms that may facilitate porting are described. In addition, potential factors that may facilitate or constrain portability, depending upon the design, are reviewed. Fundamental principles that underpin successful porting – transparency, efficiency and effectiveness, and testing – are also considered.

The report also covers a number of potential issues on which further industry engagement regarding these new access models and porting could be constructive.

CPMI and IOSCO encourage industry efforts to engage in further work to:

  • Enhance transparency and disclosure regarding direct and sponsored access model participation.
  • Develop further effective practices to facilitate porting, thereby ensuring clients’ continued access to clearing in the event of an intermediary default.

In addition, CPMI-IOSCO will monitor market developments in this area (including other potential emerging new access models) and will engage further as needed.