Sec. 204. Report on clearinghouses
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Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve System shall jointly publish a report that answers the following questions: Are prefunded default funds at major clearinghouses, along with prefunded liquidity resources, adequate to absorb losses and continue operations in the event of the failure of multiple large clearing members during a systemic stress event affecting the financial system as a whole? Are capital and liquidity resources associated with cleared derivatives at clearinghouse members adequate to meet clearinghouse capital and margin calls that might occur during a systemic stress event associated with the failure of multiple large clearing members during a systemic stress event? Based on planned resource levels at clearinghouses and major clearing members, in what ways might a lack of prefunded resources at a clearing house, or the level of member capital and liquidity resources associated with cleared derivatives, contribute to increased financial system stress during a systemic event? How would the answers to the questions in paragraphs
(1)through
(3)be affected if portfolio correlation levels in clearinghouse margin and default fund models were significantly lower than those assumed in current risk models? Are such lower correlation levels possible in a stress event? Are capital levels held by clearinghouses currently adequate to align risk management incentives between clearinghouses themselves, their members, and end user clients of their members? Do the fiduciary duties of clearinghouse management to their stockholders in any way conflict with the public interest? The report required under subsection
(a)shall contain policy recommendations associated with the answers to the questions posed under paragraphs
(1)through
(7)of that subsection.