Governance
CCUS is registered with the Commodity Futures Trading Commission as a Derivatives Clearing Organization (“DCO”). CCUS’s governance arrangements place high priority on the safety and efficiency of the Clearinghouse by requiring all material risk issues to be addressed by its Risk Management Committee and Board of Directors.
Description of Board and Its Responsibilities
The Board of Directors (“Board”) maintains primary oversight of the governance of CCUS, with its central objective being to promote the safety and efficiency of the Clearinghouse and to contribute to the overall stability of the broader financial system, while also taking into account the legitimate interests of key market stakeholders.
As part of fulfilling its oversight and governance responsibilities, the Board has established a Risk Management Committee to serve as advisory committee to the Board with regard to any matters that could materially affect the risk profile of CCUS.
The Risk Management Committee has also established, to assist in fulfilling these responsibilities, the Default Management Committee to oversee CCUS’s default management process and its default management drills, and the Risk Advisory Working Group to provide risk-focused perspectives of market participants on matters that could materially affect the risk profile of CCUS.
Risk Management Committee
The Risk Management Committee works in close coordination with the Board, and provides guidance on the Clearinghouse’s risk management oversight, including evaluating the effectiveness of CCUS’s overall risk management framework.
As part of its mandate, the Risk Management Committee advises the Board on any matter that could materially affect CCUS’s risk profile as a DCO. These matters include, but are not limited to:
- Significant modifications to CCUS’s risk models, default‑management procedures, financial resources, and credit‑risk management practices, as well as substantial updates to related policies governing the development, testing, and calculation of those elements;
- Major changes to clearing‑member participation standards and eligibility requirements;
- The introduction of new products whose margin, liquidity, pricing, default‑management, or other risk characteristics differ meaningfully from those of products currently cleared by CCUS;
- Material revisions to CCUS’s risk‑monitoring methodologies;
- Regulatory proposals that may raise novel issues or regulatory risks prior to implementation, including advising the Board on the potential regulatory impact of such changes; and
- Any other significant risk management concerns, including those related to policy matters, financial safeguards, financial surveillance, or membership issues
Default Management Committee
The Default Management Committee (“DMC”) is responsible for managing risks to the Clearinghouse and its non-defaulting Clearing Members when a Clearing Member defaults, is at risk of defaulting, or when a non-default loss arises. The DMC’s responsibilities include:
- Providing strategic direction for default preparedness;
- Meeting during a Clearing Member default or imminent default to assist with all aspects of default management, including reviewing and approving actions to manage and mitigate risks associated with the positions of one or more defaulting Clearing Members;
- Meeting in the event of a non‑default loss to review and approve how the Guaranty Fund will be applied and how such losses will be allocated between the Clearinghouse and its Clearing Members;
- Contributing to the annual testing of the Clearinghouse Default Management Plan; and
- Providing an annual report on its activities to the Risk Management Committee
Risk Advisory Working Group
The Risk Advisory Working Group (“RWG”) provides the Risk Management Committee with independent and informed risk-based input from the perspective of market participants regarding matters that could materially affect the risk profile of the Clearinghouse. The RWG must include at least two clearing member representatives and at least two representatives of customers of clearing members. This composition ensures that the RWG has the industry expertise needed to provide independent, knowledgeable input on matters that may materially affect the Clearinghouse's risk profile. Under its charter, RWG participants must act in a manner that supports the Clearinghouse’s safety and efficiency and contributes to the stability of the broader financial system.
Registrations, Licenses, Ownership Structure
Cboe Clear U.S., LLC (“CCUS” or the “Clearinghouse”) is a Delaware limited liability company and a wholly-owned subsidiary of Cboe Global Markets, Inc., a publicly-traded Delaware corporation based in Chicago, Illinois. CCUS is registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a derivatives clearing organization (“DCO”). The Clearinghouse’s primary regulator is the CFTC. CCUS operates under a U.S. legal framework comprised of the Commodity Exchange Act, corresponding CFTC regulations, and the U.S. Bankruptcy Code.
