CPMI and IOSCO have today published a report on current central counterparty (CCP) practices to address non-default losses (NDL) arising, for example, from investment risk or cyber attacks. CCPs must have policies, procedures and plans to address NDLs in accordance with the Principles for Financial Market Infrastructures (PFMI) because, if not managed properly, the financial consequences of non-default events can threaten a CCP’s viability. Given the wide range of CCP practices to address NDLs and industry requests for further clarifications, CPMI and IOSCO will work to identify areas where further guidance or recommendations may be useful. Further engagement with industry stakeholders will also be undertaken to inform a public consultation in the near term on further guidance or recommendations with respect to NDLs.

This information was gathered from the Bank for International Settlements