Commodity Futures Trading Commission: Derivatives Clearing Organizations and International Standards
GAO-14-227R: Dec 17, 2013
GAO reviewed the Commodity Futures Trading Commission's (Commission) new rule on derivatives clearing organizations and international standards. GAO found that (1) the final rule establishes additional standards for compliance with the derivatives clearing organization (DCO) core principles set forth in the Commodity Exchange Act (CEA) for systemically important DCOs (SIDCOs) and DCOs that elect to opt-in to the SIDCO regulatory requirements (Subpart C DCOs). Pursuant to the new regulations, SIDCOs and Subpart C DCOs are required to comply with the requirements applicable to all DCOs, which are set forth in the Commission's DCO regulations on compliance with core principles, to the extent those requirements are not inconsistent with the new requirements set forth herein. The new regulations include provisions concerning: procedural requirements for opting in to the regulatory regime as well as substantive requirements relating to governance, financial resources, system safeguards, special default rules and procedures for uncovered losses or shortfalls, risk management, additional disclosure requirements, efficiency, and recovery and wind-down procedures; and (2) Commission complied with the applicable requirements in promulgating the rule.