On 2 November 2011, the Basel Committee on Banking Supervision (“the Basel Committee”) published a second consultation on the capitalisation of bank exposures to central counterparties (“CCPs”) (BCBS206).

The proposals developed by the Basel Committee require banks to more appropriately capitalise their exposure to OTC derivatives and create incentives for banks to increase their use of CCPs.

This includes efforts to ensure that the exposure of banks to CCPs are adequately capitalised. The proposals cover both capital requirements for default fund exposures and trade-related exposures to CCPs.

The Basel Committee carried out an initial consultation on this topic in December 2010. Its second consultation takes account of the responses received to the earlier consultation, as well as the results of various impact assessments. The Committee also consulted closely with the Committee on Payment and Settlement Systems and the International Organisation of Securities Commissions (IOSCO).

The Basel Committee seeks comments on the proposed rules text by 25 November 2011. It then aims to finalise the rules and to publish the results of its quantitative impact studies at the end of 2011 and expects that the rules will be implemented in its member jurisdictions by January 2013.