Actions to Improve Compliance
Credit exposures management
|Align the definitions of margins and clearing funds with international ones.|
|Consider additional liquid financial resources to use in case of extreme situations where repo agreements cannot be used.|
Minimize its exposure and concentration risk vis-à-vis the two banks.
Consider conducting more frequent stress testing than one a month, in particular, in times of unusual market volatility.
Disclose stress testing assumptions to participants.
Custody and investment risk
|Continue to monitor and mitigate the potential risks, which result from holding assets at only two commercial banks.|
Avoid to the largest extent possible unsecured investments.
|Test and review NSCC backup sites to critical participants’ backup sites.|
|Provide NSCC direct access to Fedwire Securities to settle DVP transactions in central bank money.|
|NSCC’s governance arrangements should be more clearly specified and transparent, including criteria for the composition and selection of Board members.|
|SEC should formally required NSCC to perform a self-assessment with respect to the CPSS-IOSCO recommendations.|
Ensure the compliance of the SEC rules with the CPSS/IOSCO Recommendations.
Provide legal mandate to the Federal Reserve to oversee NSCC, which is systemically important system, as a complementary function to the existing SEC regulation and supervision.