United Kingdom: Additional Actions
|Reference recommendation||Additional actions|
|Recommendation 3–Measurement and Management of Credit Exposures||LCH should develop a routine capacity to recalculate exposures intraday for the LIFFE market.|
|Recommendation 4–Margin Requirements||For the LIFFE market, if prices are particularly volatile, then LCH will make an intraday call based on the previous day’s positions. LCH should develop the routine capacity to do so using intraday positions.|
|Recommendation 8–Operational risk||LCH should envisage making contingency testing compulsory for the largest participants to ensure they are operationally reliable and have in place tested contingency arrangements to deal with an operational failure, affecting either their access to LCH or LCH itself.|
Such a core and global infrastructure should envisage implementing a second back-up site (three sites architecture), located outside the greater London area.
|Recommendation 13–Governance||LCH should publish information about its management structure, and disclose detailed objectives to participants and the extent to which they are met.|
|Recommendation 14–Transparency||Additional public information would be welcome, for example on concentration banks and LCH’s activity (statistics).|
The assessors encourage LCH to publish a more detailed self-assessment.
|Recommendation 15–Regulation and oversight||In addition to their existing market intelligence meetings, the FSA and the BoE may want to set up regular dedicated meetings with individual LCH participants and partners (such as exchanges, PPS and concentration banks) to get their views on the efficiency and robustness of the CCP, and assess their own interaction with the system.|