Enhancing its resiliency as a Systemically Important Financial Market Utility (SIFMU), OCC, the world’s largest equity derivatives clearing organization, announced that the U.S. Securities and Exchange Commission (SEC) approved Phase III of the company’s Financial Safeguards Framework (FSF) for liquidity on June 4, 2020. The approved changes were implemented on June 29, 2020.
Today OCC announced the SEC approved Phase III of the company’s Financial Safeguards Framework (FSF) for liquidity on June 4, 2020.
“The implementation of the Financial Safeguards Framework Phase III enhancements is an important milestone for OCC, our clearing members, and market participants,” said Scot Warren, OCC Chief Operating Officer. “The enhancements are designed to meet new and evolving regulatory requirements and industry best practices.”
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Dale Michaels, Executive Vice President, Financial Risk Management, added, “This implementation represents the culmination of several years of collaborative work with our regulators to enhance OCC’s resiliency as a SIFMU. These enhancements increase market transparency and establish a new approach to liquidity stress testing and determining the adequacy, sizing, and sufficiency of OCC’s liquidity resources.”
OCC’s liquidity risk management framework is designed to ensure that OCC holds sufficient qualified liquid resources to meet settlement obligations with a high degree of confidence under a wide range of foreseeable stress scenarios, including the default of the clearing member organization (CMO) group that would generate the largest aggregate payment obligation in extreme but plausible market conditions.
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