Oslo Clearing ASA Self Assessment ESCB-CESR Recommendation

The key aspects of a default situation and how a default shall be managed are
described in the rulebook of Oslo Clearing. Further, a description on the waterfall of
resources is publicly available. It is our opinion that participants and the general
public possess sufficient information on how Oslo Clearing will proceed in the case of
a default.
Assignment of assessment:
The default procedures of Oslo Clearing clearly state what constitutes a default and
explicitly permits Oslo Clearing to close out or manage the positions of a defaulting
participant. The Clearing Rules, procedures and mechanisms permit the liquidation of
the customers' positions and assets, but not their transfer. However a framework is in
place allowing for such a transfer to take place.
The Rulebooks and procedures allow Oslo Clearing to promptly draw on any financial
resources, including liquidity facilities (Q1).
The legal framework provides a high degree of assurance that decisions to liquidate a
position, to apply collateral or to draw down liquidity resources would not be reversed
and national insolvency law permits the identification and separate treatment of
customer and proprietary assets (Q2).
Oslo Clearing has analysed the effects which implementing its default management
plan would have on the market. Oslo Clearing has an internal plan for implementing
its default procedures that clearly delineates roles and responsibilities for addressing
a default, including plans to draw on any financial resources. The plan addresses the
information needs of Oslo Clearing as well as any coordination issues. The plan is
reviewed at least once a year and is tested at least once a year (Q3).
Key aspects of Oslo Clearing's default procedures are available to participants and to
the public (Q4).
The recommendation 6 on default procedures is observed
7 - Custody and Investment Risk
A CCP should hold assets in a manner whereby risk of loss or of delay in its access to
them is minimised. Assets invested by a CCP should be held in instruments with
minimal credit, market and liquidity risks.
Observing Recommendation 7
1. At what types of entities is collateral held? Does the CCP verify that these entities’
procedures and practices conform to the relevant ESCB-CESR Recommendations for
Securities Clearing and Settlement in the European Union? If so, how? Does the CCP
confirm that its interest in the securities can be enforced and that it can have prompt
access to the securities in the event of a participant’s default, even if these securities
are held in another time zone or jurisdiction? Does it monitor the financial condition,
safeguarding procedures and operational capacity of its custodians on an ongoing
basis?
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