Clearing houses subscribing to disclosure rules set by international standard-setters the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions must disclose quarterly the number of times in the past 12 months that these shortfalls occur. They must also report the average and peak size of these uncovered exposures.

The NSCC is currently facing serious questions over the handling of broker Robinhood during the market frenzy involving surging meme stocks in late January. However, the $1.06 billion margin breach reported in the first quarter is unlikely to be related to the meme-stock volatility. The DTCC says the peak breach occurred on January 22, 2021, six days before it issued a special margin charge to Robinhood. The central counterparty adds the breach “was mainly driven by a single security exhibiting idiosyncratic risk”, but doesn’t go any further than that in clarifying who was behind it.

The latest CPMI-Iosco quarterly filing on default resources shows the NSCC fund had just $102.6 million of the clearing house’s own capital at the end of March, while clearing members contributed a further $16 billion. This implies that, had a default occurred, it would have been clearing members’ funds that would have been depleted in the aftermath.”