OCC credit rating remains unaffected
23 August 2018 Chicago
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Standard & Poor (S&P) revealed OCC credit rating remains unaffected by the approval of the company鈥檚 new financial safeguards framework by the US Securities and Exchange Commission.
In a bulletin posted on its website, S&P said OCC鈥檚 decision to 鈥渟ize its clearing fund to formally provide enough resources to cover the simultaneous default of its two largest clearing members (cover 2) versus a default of its single largest clearing member (cover 1) in the current framework will put OCC at par with most US and European peers and will be consistent with our expectation, already factored in the ratings.鈥�
S&P also said: 鈥淲e regard it important that a CCP has sufficient resources to withstand the liquidity strain that could arise if two leading clearing members default.鈥�
Craig Donohue, OCC executive chairman and CEO, commented: 鈥淪&P鈥檚 announcement is a strong recognition of OCC鈥檚 efforts to strengthen its financial safeguards framework and to promote stability and market integrity through effective and efficient clearance, settlement and risk management services.鈥�
John Davidson, OCC president and COO added: 鈥淭his announcement reflects favourably on the outstanding work being performed every day by our team on behalf of our participating exchanges, clearing firms and market participants.鈥�
鈥淲e will continue to focus our energies on strengthening the resilience, risk management and capitalisation of OCC in order to ensure confidence in the financial markets and the broader economy.鈥�
In a bulletin posted on its website, S&P said OCC鈥檚 decision to 鈥渟ize its clearing fund to formally provide enough resources to cover the simultaneous default of its two largest clearing members (cover 2) versus a default of its single largest clearing member (cover 1) in the current framework will put OCC at par with most US and European peers and will be consistent with our expectation, already factored in the ratings.鈥�
S&P also said: 鈥淲e regard it important that a CCP has sufficient resources to withstand the liquidity strain that could arise if two leading clearing members default.鈥�
Craig Donohue, OCC executive chairman and CEO, commented: 鈥淪&P鈥檚 announcement is a strong recognition of OCC鈥檚 efforts to strengthen its financial safeguards framework and to promote stability and market integrity through effective and efficient clearance, settlement and risk management services.鈥�
John Davidson, OCC president and COO added: 鈥淭his announcement reflects favourably on the outstanding work being performed every day by our team on behalf of our participating exchanges, clearing firms and market participants.鈥�
鈥淲e will continue to focus our energies on strengthening the resilience, risk management and capitalisation of OCC in order to ensure confidence in the financial markets and the broader economy.鈥�
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