01/18/2019 | News release | Distributed by Public on 01/18/2019 11:21
London, Friday 18 January 2019 - The World Federation of Exchanges ('WFE'), the global industry group for exchanges and CCPs, has published its response to the Basel Committee on Banking Supervision's consultation on the leverage ratio treatment of client cleared derivatives.
The WFE's responsecan be summarised as follows:· The WFE supports a policy framework that allows for accessible, competitive and vibrant derivatives markets - and one that also ensures the soundness of banks (including the prevention of excessive leverage); · The WFE has long advocated for the recognition of client margin offsets, and welcomes the Basel Committee's proposals to address the leverage ratio treatment of a segregated client margin; and· The WFE supports the Basel Committee's efforts towards a coordinated implementation of the standardised approach for measuring counterparty credit risk (SA-CCR); this should be done in a manner that incorporates margin offsets.
Nandini Sukumar, CEO, WFEsaid: 'The WFE's response to this consultation reiterates our position on the issue of the treatment of segregated client margin under the leverage ratio. Global authorities have recognised the challenges associated with clearing member concentration. The proposals by the Basel Committee to allow segregated client margin offsets will support a coherent policy framework that addresses this risk management challenge.'Today's consultation response follows the WFE's 7 September 2018 responseto the four global standard-setting boards assessing the effectiveness of incentives to centrally clear over-the-counter (OTC) derivatives.
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About the World Federation of Exchanges (WFE):
Established in 1961, the WFEis the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 200 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 37% are in Asia-Pacific, 43% in EMEA and 20% in the Americas. WFE exchanges are home to nearly 45,000 listed companies, and the market capitalisation of these entities is over $82.5 trillion; around $81.8 trillion (EOB) in trading annually passes through the infrastructures WFE members safeguard (at end 2017).
The WFE is the definitive source for exchange-traded statistics, and publishes over 350 market data indicators. Its free statistics database stretches back more than 40 years, and provides information and insight into developments on global exchanges. The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities' goals of ensuring the safety and soundness of the global financial system.
With extensive experience of developing and enforcing high standards of conduct, the WFE and its members support an orderly, secure, fair and transparent environment for investors; for companies that raise capital; and for all who deal with financial risk. We seek outcomes that maximise the common good, consumer confidence and economic growth. And we engage with policy makers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system.
For more information, please contact:
Head of Communications, The World Federation of Exchanges
Email: [email protected]
Phone: +44 20 7151 4137 / 07850 287 685