PFMI 1: Legal basis
A CCP should have a well-founded, clear, transparent, and enforceable legal basis for each material aspect of its activities in all relevant jurisdictions.
View DemoPFMI 2: Governance
A CCP should have governance arrangements that are clear and transparent, promote the safety and efficiency of the CCP, and support the stability of the broader financial system, other relevant public interest considerations, and the objectives of relevant stakeholders.
View DemoPFMI 3: Framework for the comprehensive management of risks
A CCP should have a sound risk-management framework for comprehensively managing legal, credit, liquidity, operational, and other risks.
View DemoPFMI 4: Credit risk
A CCP should measure, monitor, and manage its credit exposures to CPs and intermediaries & maintain sufficient resources to cover exposure to each or the two largest CPs with a high degree of confidence.
View DemoPFMI 5: Collateral
A CCP that requires collateral to manage its or CP’s credit exposure should accept collateral with low credit, liquidity, and market risks. A CCP should also set and enforce appropriately conservative haircuts and concentration limits.
View DemoPFMI 6: Margin
A CCP should cover its credit exposures to its participants for all products through an effective margin system that is risk-based and regularly reviewed.
View DemoPFMI 7: Liquidity risk
A CCP should measure, monitor, and manage its liquidity risk; maintain liquidity across currencies for same-day and, where appropriate, intraday and multi day settlement of obligations under a wide range of extreme but plausible market conditions.
View DemoPFMI 8: Settlement finality
A CCP should provide clear and certain final settlement, at a minimum by the end of the value date. Where necessary or preferable, a CCP should provide final settlement intraday or in real time.
View DemoPFMI 9: Money settlements
A CCP should conduct its money settlements in central bank money where practical and available. If central bank money is not used, a CCP should minimise and strictly control the credit and liquidity risk arising from the use of commercial bank money.
View DemoPFMI 10: Physical deliveries
A CCP should clearly state its obligations with respect to the delivery of physical instruments or commodities and should identify, monitor, and manage the risks associated with such physical deliveries.
View DemoPFMI 11: Central securities depositories
A CSD should have appropriate rules and procedures to help ensure the integrity of securities issues and minimise and manage the risks associated with the safekeeping and transfer of securities. A CSD should maintain securities in an immobilised or dematerialised form for their transfer by book entry.
View DemoPFMI 12: Exchange-of-value settlement systems
If an FMI settles transactions that involve the settlement of two linked obligations (e.g. securities or FX transactions), it should eliminate principal risk by conditioning the final settlement of one obligation upon the final settlement of the other.
View DemoPFMI 13: Participant-default rules and procedures
A CCP should have effective and clearly defined rules and procedures to manage a participant default. These rules and procedures should be designed to ensure that the CCP can take timely action to contain losses and liquidity pressures and continue to meet its obligations.
View DemoPFMI 14: Segregation and portability
A CCP should have rules and procedures that enable the segregation and portability of positions of a participant’s customers and the collateral provided to the CCP with respect to those positions.
View DemoPFMI 15: General business risk
A CCP should identify, monitor, and manage its general business risk and hold liquid net assets funded by equity to ensure a recovery or orderly wind-down of critical operations and services.
View DemoPFMI 16: Custody and investment risks
A CCP should safeguard its own and its participants’ assets and minimise the risk of loss on and delay in access to these assets. A CCP’s investments should be in instruments with minimal credit, market, and liquidity risks.
View DemoPFMI 17: Operational risk
A CCP should identify the plausible sources of operational risk and mitigate their impact through the use of appropriate systems, policies, procedures, and controls. Systems should be designed to ensure a high degree of security and operational reliability and should have adequate, scalable capacity. Business continuity management should aim for timely recovery of operations and fulfilment of the CCP’s obligations, including in the event of a wide-scale or major disruption.
View DemoPFMI 18: Access and participation requirements
A CCP should have objective, risk-based, and publicly disclosed criteria for participation, which permit fair and open access.
View DemoPFMI 19: Tiered participation arrangements
A CCP should identify, monitor, and manage the material risks to the CCP arising from tiered participation arrangements.
View DemoPFMI 20: FMI links
A CCP that establishes a link with one or more CCPs should identify, monitor, and manage link-related risks.
View DemoPFMI 21: Efficiency and effectiveness
A CCP should be efficient and effective in meeting the requirements of its participants and the markets it serves.
View DemoPFMI 22: Communication procedures and standards
A CCP should use, or at a minimum accommodate, relevant internationally accepted communication procedures and standards in order to facilitate efficient payment, clearing, settlement, and recording.
View DemoPFMI 23: Disclosure of rules, key procedures, and market data
A CCP must have clear, comprehensive, and publicly disclosed rules/procedures for CPs to have an accurate understanding of the risks, fees, and other material costs.
View DemoPFMI 24: Disclosure of market data by trade repositories
A TR should provide timely and accurate data to relevant authorities and the public in line with their respective needs.
View Demo