On Sep. 27, ECC issued details of default management simulation.
ECC issued details of annual default management simulation to start on Oct. 28, 2024.
Will focus on practicing close-out and risk mitigation procedures for clearing member defaults, as mandated by EU Market Infrastructure Regulation (EMIR Reg 648/2012).
Exercise
Annual default simulation will take place across an entire week, a description is included in the circular giving the date and approximate timing of each test element.
Given importance of stress tests, ECC encourages Clearing Members (CMs) to actively participate in auctions, via proprietary trading desks or agency account quotes.
All CMs and Non-Clearing Members (NCMs) admitted for trading derivatives products at EEX, HUDEX, NOREXECO, EEX Asia that wish to take part should contact to request.
NCMs will be invited to at least one and possibly more simulated default auctions in various ECC-cleared derivatives products that the NCM is admitted to.
CMs expected to participate in default auction as a trading participant for products in which they hold positions on behalf of clients, or proprietary account positions.
ECC will contact CMs concerned with a list of their NCMs participating in the auction.
Effectiveness
The default management simulation will be carried out starting on Oct. 28, 2024.
