On 4 May 2020, the Financial Stability Board (FSB) issued a public consultation report on guidance on financial resources to support central counterparty (CCP) resolution and on the treatment of CCP equity in resolution. The draft guidance is intended to assist CCP resolution authorities and is based on a discussion paper that the FSB published in 2018.
The draft guidance is in two parts. The first part contains guidance on assessing the adequacy of financial resources to absorb losses and cover other costs in resolution. The second part sets out guidance on the approaches to the treatment of CCP equity in resolution. The draft guidance does not address wind-down plans of systemically important CCPs.
The deadline for comments on the consultation report is 31 July 2020. The FSB will consider in five years after the final guidance has been published, in consultation with the CPMI-IOSCO, whether further adjustments are needed in light of market developments and resolution authorities’ experience with using the guidance.
The guidance does not replace or supersede the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions, the implementation guidance on financial market infrastructure resolution in Appendix II – Annex 1 to the Key Attributes or the FSB guidance on CCP resolution and resolution planning. The guidance in these documents remain relevant to CCP resolution.