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Questionnaire for CDS CCPs on Protection of Customer Initial Margin - page 31 / 32





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This answer would most appropriately be provided by our clearing members.

Enforcement and Monitoring Mechanisms

6. Please describe any enforcement or monitoring mechanisms (imposed by the CCP, applicable regulatory authorities or otherwise) designed to ensure that CMs (and their custodians, to the extent applicable) comply with their obligations in respect of any legal or contractual requirements described in your response above.

LCH.C’s compliance with obligations and best practices is a matter of public record available via our website. Our most recent CPSS-IOSCO assessment is about to be presented to the FSA/BoE for verification, we can submit a copy of this document once verified.

Legislative or Regulatory Reforms

7. As requested above, please identify in your responses above any areas of legal uncertainty and the level of legal comfort provided on various aspects of the proposed framework. Please consider whether there are any legislative or regulatory reforms that would be helpful to clarify or improve the legal framework governing any of the foregoing issues and areas of legal uncertainty identified above. If so, describe any such proposed reforms in detail.

This is subject to current review and discussion and we will be responding to various circulated papers etc. in due course.

Much will depend on how regulators, CMs etc. determine client accounts should be operated going forwards, gross vs net, segregated, omnibus etc.

Other Considerations

8. Please feel free to elaborate on any topic you deem to be relevant to the analysis of customer protection or systemic risk issues.

LCH.C is perfectly willing to be flexible in terms of the account types and strucures that we offer; we are also able to add specific language to our rules to protect certain categories of customer (e.g. US customers), subject to the agreement of our regulator(s).


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