The Securities and Exchange Commission announced that LCH SA has proposed changes to its Liquidity Risk Modelling Framework. These revisions aim to improve how LCH SA calculates its liquidity needs for daily settlements, particularly regarding auto-collateralization and excess collateral handling. By updating its rules, LCH SA seeks to ensure it has enough liquid resources to meet financial obligations, even in unexpected situations, while aligning with the SEC's regulatory requirements for liquidity management. Additionally, the changes are set to incorporate real-time data and historical behaviors to enhance the model's accuracy and reliability.
Simple Explanation
The people in charge of making sure money gets where it needs to go are planning to use better math and information to always keep enough money handy, even if things get a little crazy. This is so they can follow the rules and make sure everything works smoothly.