US Federal Agencies Report on Risk Management Supervision of Designated Clearing Entities

Section 813 of the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 requires that the Commodity Futures Trading Commission (“CFTC”) and the Securities and Exchange Commission (“SEC”) coordinate with the Board of Governors of the Federal Reserve System (“Board”) to jointly develop risk management supervision programs for clearing entities that have been identified as systemically important by the Financial Stability Oversight Council (“Council”). Section 813 also requires the CFTC, the SEC, and the Board to make recommendations in four areas: (i) improving consistency in the designated clearing entity (“DCE”) oversight programs of the SEC and CFTC, (ii) promoting robust risk management by DCEs, (iii) promoting robust risk management oversight by regulators of DCEs, and (iv) improving regulators' ability to monitor the potential effects of DCE risk management on the stability of the financial system of the United States.

Originally Published: 
21/07/2011