The International Swaps and Derivatives Association has published a new position paper that sets out a proposed recovery and continuity framework for central counterparties.

The position paper, which comprises the elements below, proposes a framework for recovery and sets out tools that can be used to re-establish a matched book following the default of one or more clearing members. It does not cover non-default losses and those relating to liquidity shortfalls.

The position paper comprises the following elements:

  • recovery measures;
  • transparency and timing;
  • appropriateness of utilising recovery measures beyond pre-funded resources;
  • segregated clearing services;
  • failure to re-establish a matched book;
  • compensation for loss allocation; and
  • condition for entry into resolution.

View ISDA Proposes CCP Recovery and Continuity Framework, 26 January 2015