This discussion note seeks comment on aspects of resolution of central counterparties (CCPs) that are considered core to the design of effective resolution strategies. It builds upon the framework of the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes) and implementation guidance on financial market infrastructure (FMI).

One of the key pillars of the post-crisis reforms of over-the-counter derivatives markets has been increased central clearing of standardised over-the-counter derivatives contracts. Greater use of CCPs is also being encouraged, where appropriate, in securities financing and repo markets. As a result CCPs have become a core part of the infrastructure on which global financial markets depend.

The discussion note covers a number of aspects of CCP resolution planning, including timing of entry into resolution; adequacy of financial resources; tools for returning to a matched book and allocating default and non-default losses; application of the No Creditor Worse Off safeguard and treatment of the CCP’s equity in resolution; and cross-border cooperation and effectiveness of resolution actions. The note also sets out related questions on which the FSB seeks comment. Responses to the discussion note, which should be sent to [email protected] by 17 October 2016, will assist the FSB in developing standards or guidance for CCP resolution planning, resolution strategies and resolution tools. The FSB will consult on proposals for such standards or guidance by early 2017.