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OCC Response to CPMI-IOSCO Discussion Paper on Central Counterparty Practices to Address Non-default Losses

October 04, 2022
The Options Clearing Corporation (OCC) appreciates the opportunity to comment on the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions (CPMI-IOSCO) Discussion Paper on Central Counterparty Practices to address Non-default Losses (Discussion Paper). Preparing for and addressing non-default losses (NDLs) is an important risk management function of a central counterparty (CCP) and OCC appreciates the ongoing work of international policymakers and standard setting bodies to promote sharing effective NDL practices. Sharing NDL practices, allows for CCPs to learn from each other and is important for ensuring that all CCPs have the proper risk management frameworks in place to fulfill their role of promoting stability in the broader financial system. OCC has contributed to this effort previously by responding to the CPMI-IOSCO Survey on NDLs in January 2021, participating in CPMI-IOSCO workshops on NDLs in July 2021 and September 2022, and sharing with other CCPs bi-laterally and through trade associations. Furthermore, we share our NDL practices with clearing members through OCC’s Board-level Risk Committee, Financial Risk Advisory Council (FRAC), and Operations Roundtable. 

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