Regulatory Alerts2023-05-17
Covered Clearing Agency Resilience and Recovery and Wind-Down Plans
The Securities and Exchange Commission proposes amendments to the Covered Clearing Agency Standards under the Securities Exchange Act of 1934 to strengthen risk management by mandating intraday margin calls and clarifying requirements for substantive third-party inputs in risk-based margin systems. The proposal also introduces a new rule establishing mandatory content requirements for covered clearing agencies’ recovery and wind-down plans, ensuring they include specific triggers, scenarios, interdependencies, and monitoring frequencies tailored to each agency’s structure. By codifying existing practices and adding targeted enhancements, the updated framework aims to bolster financial stability, improve operational resilience, and streamline regulatory oversight of critical clearing agencies.