Risk management in KDPW_CCP
Risk management follows internal rules and procedures taking into account external regulations (in particular the Regulation of the European Parliament and of the Council (EU) No 648/2012 of 4 July 2012 on OTC derivatives, central counterparties and trade repositories and the Commission Delegated Regulation (EU) No 153/2013 of 19 December 2012 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on requirements for central counterparties, and in line with the acceptable risk level.
The overarching objectives of KDPW_CCP risk management include:
The risk management system includes:
- to ensure and to maintain KDPW_CCP’s capability of meeting obligations and financial liabilities and achieving the goals of its activity;
- to prevent crises;
- to identify and define solutions ensuring safe operation of KDPW_CCP and meeting of financial liabilities in the event of clearing member default or other crisis.
- risk identification– defining the types of risk, risk factors and significance of risks;
- risk measurement and assessment – defining quantitative and qualitative risk measurement methods/measures, performing relevant tests (including stress-testing, sensitivity analysis, backtesting);
- risk monitoring – controlling the accepted risk level and use of set limits, assessing the effectiveness and adequacy of risk measurement tools and methods;
- risk reporting – presentation of information on the risk profile, identified potential threats and taken preventive actions to relevant entities/units;
- taking mitigating measures – taking measures to mitigate risk (including implementation of regulations, an internal limit system, and risk insurance).