US regulators to run the rule over systemically important clearing house

Source: Financial Stability Oversight Council

Section 804 of the Dodd-Frank Act gives the Financial Stability Oversight Council the authority to designate as systemically important a financial market utility (FMU) if the Council determines that its failure or a disruption to its operations could create or increase the risk of significant liquidity or credit problems spreading among financial institutions or markets and thereby threaten the stability of the U.S. financial system.

An FMU designated by the Council as systemically important would become subject to the requirements of Title VIII of the Dodd-Frank Act, including risk management standards and additional examinations.

An advance notice of proposed rulemaking (ANPR) on FMU designations was approved for public comment at the Council's November 2010 meeting. Additionally, the Council approved a Notice of Proposed Rulemaking (NPR) on FMU designations for public comment at its March 2011 meeting.

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