OCC emphasises commitment to secure markets 11 April 2018Illinois Reporter: Brian Bollen
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OCC has emphasised its commitment to bolstering the foundation for secure markets by safeguarding the integrity of cleared markets through safe and sound practices in its role as a systemically important financial market utility (SIFMU).
In a blog entry this week, chief administrative officer Scot Warren noted that to help it achieve that goal the OCC implemented a new cash clearing fund requirement in March.
This measure required its clearing firms to collectively deposit and maintain $3 billion in cash in the fund, he explained.
Warren added that establishing a minimum cash contribution considerably increases the liquidity resources that the OCC has on hand to account for any extreme scenarios that may arise, such as a clearing firm’s default in a stressed market scenario.
He said it enhances the OCC's resilience as a SIFMU and provides it with a more consistent level of cash resources. In addition, the interest income earned on the cash is passed through to its clearing firms.
Warren commented: “OCC strongly believes that liquidity is central to its role as a SIFMU, and this change is a milestone for the organisation.”
To help ensure confidence in the financial markets and the broader economy, the OCC remains committed to finding ways to enhance its resilience and promote operational excellence so that it can better serve partner exchanges, clearing firms and market participants, he concluded.
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