On February 19, ISDA submitted a response to a consultation from the Bank of England  (BoE) on a proposal to introduce a set of rules for UK financial market infrastructures (FMIs), including central counterparties (CCPs).

In the response, ISDA expresses its support for the proposed fundamental rules (FRs). ISDA would encourage further references to transparency throughout the rules. ISDA believes transparency should be one of the guiding principles that CCPs should follow in the conduct of their business, and this could be reflected under FR 1, 2 and/or 3. ISDA would also welcome further references to transparency in relation to FR 9, in the context of operational resilience, given that market participants do require adequate information on CCPs’ operational resiliency to perform their third-party risk assessments.

ISDA also appreciates the addition of FR 10, which recognizes the specific nature of CCPs by requiring them to identify, assess and manage the risks that their operations could pose to the stability of the financial system. ISDA believes the outcome of the assessment should also be shared with CCPs’ participants, which would then be able to factor this into their own risk management.

The response to the BoE consultation can be found below.