Knowledge Base

Which authorities are responsible for the supervision of European CCPs such as LCH SA?

ACPR for licensing and prudential supervision

AMF for approval of operating rules

Banque de France for oversight as a market infrastructure

European Commission for cross-border coordination

What is the primary obligation of clearing house members regarding initial margins?

Report all transactions to trade repositories within T+1

Deposit initial margins covering the residual risk at position entry

Contribute to the default fund proportionally to the level of risk

Promptly confirm transactions and periodically reconcile portfolios

What is the primary objective of counterparty risk reduction in a clearing house under the EMIR regulation?

Increase financial market liquidity

Mutualize risk via the default fund and standardize contracts

Centralize positions for consolidated monitoring

Mandate reporting of all derivative transactions

What are the concrete mechanisms used to reduce counterparty risk in a clearing house?

Risk mutualization via the default fund

Contract standardization promoting liquidity

Daily mark-to-market valuation enabling daily margin calls

Position centralization for consolidated monitoring

Regulation 2021/23 on the recovery and resolution of CCPs only provides for last-resort intervention tools such as cash calls.

True

False

Multilateral netting

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Mandatory central clearing for standardized OTC derivatives was mandated by the G20 Pittsburgh summit in 2009.

True

False

Categorize items by dragging them to the appropriate zones

Items to categorize:

Credit institutions with registered office in France or in the EEA

Authorized investment firms

Central banks

Collective investment schemes

Categories:

Regulated financial institutions

Public institutions

Investment bodies