The European Association of CCP Clearing Houses (EACH) appreciates the opportunity to provide feedback to the HMT Consultation Paper “Senior Managers & Certification Regime: Financial Market Infrastructures”. Our views, in summary, are the following:
- EACH Members welcomes the UK’s intention to uphold high regulatory standards in the domain of UK CCP supervision, however, we are of the opinion that a SM&CR, similar to the one applicable to banks, would not be appropriate.
- CCPs are already heavily regulated entities which are subject to the highest regulatory standards, including high standards of conduct and accountability amongst its staff. In addition, CCPs already have a solid risk, compliance and conduct culture, which is essential to ensure the efficient functioning of the FMI itself and, by extension, the market and financial stability
- The conflict of interest in banks, whereby individuals are incentivised to create risk in order to stimulate short term returns, does not exist for CCPs. CCPs exist for the purpose of centralising and collateralising risk, and they are remunerated according to their management of collateral.
- EACH Members believe that the BoE’s existing close supervision activity, combined with the existing powers to require investigations and make directions (under the Financial Services and Markets Act 2000 ) provide sufficient assurance.
For more information, please visit our website www.eachccp.eu
