Document ID: chunk:federal_register_of_legislation:F2023L01599:reg:6:p9
Version: federal_register_of_legislation:F2023L01599
Segment Type: reg
Provision Reference: reg 6 (pt 9/35)
Character Range: 48544–51315

of the QCCP and the CCP regulator has not since publicly addressed the issues identified.

Membership of CCPs
35.         A clearing member ADI must have an appropriate risk management framework to cover its activities as a clearing member. Such a framework must include, as a minimum:
(a)          assessment of the risk (financial, operational and reputational) that might arise from membership of and conduct of business through a CCP and from any similar engagement with multiple CCPs;
(b)          application of appropriate systems and controls to monitor, on a continuing basis, the risk that membership of and conduct of business through a CCP or multiple CCPs may create and to manage such risk. This would include application of limits on potential risk exposures; and
(c)          maintenance of appropriate capital cover against the risks that may arise from membership of and the conduct of business through a CCP and multiple CCPs. This would include capital cover relating to business conducted through the CCP and any funded support provided to a CCP or any contingent support to which the ADI may be committed to provide to a CCP.
36.         Membership of a CCP must not expose an ADI to an unlimited contingent liability to support the CCP.
37.         An ADI must notify APRA prior to applying for membership of a CCP.
38.         An ADI that is a member of a CCP must notify APRA of any proposed changes to the contractual provisions or rules governing its membership and business undertaken through the CCP that may have the potential to impact on the level of exposure incurred from conducting business through the CCP or from any support that has to be provided (funded or unfunded) to the CCP.
39.         An ADI must notify APRA of any operational or financial risks arising from membership of and conduct of business through a CCP that may have a potential material adverse impact on the ADI's operations, financial position or reputation. This would include any pertinent rulings, advice or actions by those entities responsible for the oversight or regulation of the conduct of business undertaken through the CCP or of membership of the CCP.

Attachment C — Capital charge for default fund exposure to a QCCP
     1. The default fund capital charge applies only to an ADI that is a clearing member to a QCCP. A client ADI is not required to calculate this capital charge.
2.             Where a default fund is shared between products or types of business with settlement risk only and products or types of business that give rise to counterparty credit risk (i.e. OTC derivative transactions, exchange-traded derivative transactions, SFTs or long settlement transactions), all of the default fund contributions will receive the risk weight