Guidance on non-default loss

Guidance on non-default loss 

The default of a fellow clearing member is the most pertinent and impactful risk facing the members of a CCP. There is also, however, the possibility of a so-called ‘non-default loss’ (NDL) arising, which in certain limited circumstances may have implications for clearing members. These are set out in the CCP’s rulebook and recovery plan. Alongside the WFE’s continuing work on default-related matters, this paper details the approach which CCPs have undertaken for addressing NDLs, as they play their part in protecting the wider financial ecosystem.