World's Major Securities Clearing Houses Create Association

by Carla Johnson, Investors Offshore.com

07 August 2001

Hong Kong Exchanges and Clearing Ltd. has announced that the world's principal clearing organisations have formed a new association, called CCP 12, which is dedicated to improving global clearing, netting and central counterparty (CCP) services.

CCP 12 has identified a broad range of issues they will informally address. These include improved information sharing, enhancement of collateral usage, development of collaborative opportunities and identification of minimum standards for risk management practices.

In January 2001, the first worldwide conference on global clearing was held in the UK with 150 industry leaders in attendance representing in excess of 70 of the most important financial services infrastructure organisations and firms from Europe, Asia/Pacific and the Americas. Since then, key representatives of these clearing organisations leading the effort met in Australia to identify objectives and create specific working groups.

Members of CCP 12 include the major clearing houses of Australia, Brazil, Canada, US (New York and Chicago), Mexico, Germany, Singpapore, Tokyo, UK and Hong Kong.

Patrice Renault, CEO of Clearnet and chairman of CCP 12, explained: 'We're determined to make sure that the financial services industry infrastructure keeps pace with the growing demands for greater efficiency, risk management and lower cost. We believe that CCP 12 will encourage the industry dialogue needed to bring common standards, promote best practices and achieve interoperability.'

Walter Reisch, executive vice president of Hong Kong Exchanges and Clearing, and CCP 12 vice chairman said: 'As institutional investors, investment banks and securities firms have become more demanding and global, there is increasing pressure on CCPs. We must respond to our customers' needs to improve efficiency and reduce the risk and cost of clearing.'

CCP 12 will hold general plenary sessions of the membership as warranted about once every six months. In the interim, more specific topics will be addressed by specialist working groups, with three groups formed at the most recent meeting to concentrate on issues related to collateral management, linkages and risk management and best practice. The next CCP 12 plenary session is planned for November.

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