The U.S. Securities and Exchange Commission on Wednesday voted to propose a plan to bolster the resiliency of clearinghouses during times of significant market stress, such as the 2021 "meme stock" trading frenzy, Reuters reported. Clearing agencies and their infrastructure are often referred to as the plumbing of the market, and stand between buyers and sellers of every trade, taking on the risk if one side defaults, or acting as central securities depositories. The SEC proposal builds on rules passed in 2016 and would require clearinghouses to monitor margin exposures on an ongoing basis and gives them the authority to make intraday margin calls as frequently as circumstances warrant, the regulator said. Specifying the ongoing monitoring of intraday exposure, and under what circumstances intraday margin calls would be made, would strengthen clearinghouses' risk management and give greater transparency around how they manage intraday risk, the SEC said.
