Mar. 31, 2021
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Both SR-OCC-2021-801 and SR-DTC-2021-004 may have an unintended side effect in that it creates an environment where peer governance and restraint are sacrificed by ensuring that a defaulting entity will be isolated. In other words, by ensuring that non-defaulting members are somewhat firewalled from a defaulting member through updated capital drawdown procedures, it does not promote peer governance of members as member assets are now the last to be drawn from after a defaulting member's contributions are drawn. That said, it is also hard to argue that the industry has a strong track record of peer governance so perhaps this concern is misplaced.