Two major international regulatory organizations issued a report noting that derivatives clearinghouses (types of central counterparties known as "CCPs") have made “important and meaningful” progress in implementing financial markets best practices regarding financial risk management and recovery standards since 2012. However, the same regulatory organizations – the Committee on Payments and Market Infrastructures of the Bank for International Settlements and the International Organization of Securities Commissions – reported that CCPs have failed to implement best practices as set forth in the Principles for Financial Markets Infrastructures published in April 2012 in the areas of recovery rules and procedures and credit and liquidity risk management. According to the two organizations, the failure of CCPs “to put in place the full set of recovery rules and procedures envisaged by the PFMI [is] a serious issue of concern that should be addressed with the highest priority.” Similarly, the two organizations noted that the failure of CCPs to implement “sufficient policies and procedures to ensure that they maintain the required level of financial resources on an ongoing basis” is also a deficiency that should be “addressed with the highest priority.” (The PFMIs are high-level best practices for key financial market infrastructures, including financial exchanges, trade repositories, and clearinghouses and clearing agencies, that set forth standards for organization; credit and liquidity risk management; settlement; default management; general business and risk management; and other topics; click here to access the Principles.) The two regulatory organizations based their conclusion on information provided by 10 major derivatives CCPs. They evaluated the CCPs’ governance of risk management, credit risk management, liquidity risk management, margin systems, collateral policy and investments, and default management and recovery planning. Simultaneously, with issuing its report of findings, the two regulatory organizations issued a request for comment on detailed guidance to be followed by CCPs on certain principles and key considerations in the PFMIs related to financial risk management, while the Financial Stability Board sought comments on a discussion note regarding CCP resolution planning. Comments are due on CPMI’s and IOSCO’s proposed guidance by October 18 and on FSB’s discussion note by October 17.