Cross-border securities settlement and risk analysis framework for ...
Cross-border securities settlement and risk analysis framework for ...
Cross-border securities settlement and risk analysis framework for ...
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4. Does the intermediary (1) / issuer (I)CSD provide credit extensions or advances of funds, <strong>and</strong> how are credit <strong>and</strong> liquidity<strong>risk</strong>s mitigated within the intermediary / issuer (I)CSD ?5. Does the intermediary (2) / issuer (I)CSD act as a principal in the <strong>settlement</strong> process ? Is the intermediary / issuer (I)CSDengaged in other types of <strong>risk</strong> generating activities ?6. What is the applicable liability regime of the intermediary / issuer (I)CSD to participants ? (incl. the st<strong>and</strong>ard of liability,the <strong>for</strong>ce majeure st<strong>and</strong>ard <strong>and</strong> any limitation to the liability regime, if any) ?7. Does the intermediary / issuer (I)CSD have an insurance policy in place to cover its liabilities ?7.1 What are the types of <strong>risk</strong>s covered by the insurance contract ?7.2 What is the amount insured ?8. Does the investor (I)CSD run any credit or liquidity <strong>risk</strong> by settling transactions through the link, <strong>and</strong> how are these<strong>risk</strong>s managed ?Topic 2 :Default procedures (3)Questions1. How <strong>and</strong> on what authority would a decision to unwind <strong>securities</strong> or funds transfers be made in the issuer (I)CSD ?2. In the case of an unwind, would this affect all provisional <strong>securities</strong> <strong>and</strong> funds transfers or only a subset thereof ? Forthe latter, which procedures are in place to determine which transfers are unwound <strong>and</strong> in what order ?3. Is a guarantee fund in place to prevent contagion affects of a participant’s default ? What is the amount of theguarantee fund ?4. Is a loss-sharing arrangement in <strong>securities</strong> or in cash applicable in the intermediary / issuer (I)CSD in the case of a nonrecoveryof losses incurred ?5. Have either a decision to unwind <strong>securities</strong> or funds transfers, the guarantee fund or the loss-sharing arrangementever been applied in the past ? If so, what was the cause <strong>and</strong> the impact of this event ?Control environmentTopic 1 :Control, regulation <strong>and</strong> oversightQuestions1. Is the intermediary / issuer (I)CSD subject to licensing, supervision, oversight ?1.1 What institutions are responsible <strong>for</strong> licensing, supervision, oversight ?1.2 Has the institution responsible <strong>for</strong> licensing, supervision, oversight disclosed assessment results ?2. Is the intermediary / issuer (I)CSD subject to internal audit ?3. Is the intermediary / issuer (I)CSD subject to external audit ?3.1 What is the name of the external auditor ?4. Does the intermediary / issuer (I)CSD have an anti-money laundering policy in place ?5. Is the investor (I)CSD aware of a history of any losses at the intermediary / issuer (I)CSD ? If so, how have such lossesbeen covered ?(1) In the case of relayed links where the intermediary is another (I)CSD.(2) In the case of relayed links where the intermediary is another (I)CSD.(3) Procedures in place with the intermediary / issuer (I)CSD in the case of a participant default.138
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