Risk Governance

CME Clearing Europe's Risk Committee Oversees Risk Governance

CME Clearing Europe's Risk Committee plays a key role in oversight of the protection offered to clearing members and users.

CMECE has in place a Risk Committee which meets at least once every quarter and otherwise as required from time to time. The purpose of the Risk Committee is to provide, on behalf of the Board, oversight of the major policies and methodologies of the Clearing House across all products and asset classes concerning, but not limited to:

  • Market risk relevant to each asset class covered by the CCP;
  • Credit risk;
  • Counterparty risk;
  • Liquidity risk;
  • Solvency risk, and;
  • Operational risk

In relation to the implementation of policies and risk methodologies, as well as the area of operational risk, the work of the Risk Committee is complementary to that of the Audit Committee, whose competence covers oversight of implementation of the full range of internal risk controls at the Clearing House. In the areas falling under its terms of reference the Risk Committee will, through its Chairman, make recommendations for endorsement by the Board.

Risk Committee Members:

The Risk Committee shall comprise of:

a. the Chairman and two/three other independent directors of CMECE;
b. six members from clearing member firms who work in risk management or operational roles;
c. three/four members who work in a senior risk management or operational roles for end-client users (clients of clearing members) of CMECE’s. This member could also be a senior risk manager for an expected end-client users. In such case, the appointment would be temporary and reviewed to ensure appropriate client representativeness.

In an ex officio capacity the following shall be invited to attend meetings of the Committee:

  • the Chief Executive Officer (CEO) of CMECE;
  • the Chief Operation Officer (COO) of CMECE;
  • the Chief Risk Officer (CRO) of CMECE; such other members of CMECE or CME risk staff as are necessary to support the CRO in assisting the Chairman in organising the meeting and ensuring that the relevant materials are made available for each meeting, and;
  • the Company Secretary of CMECE or a nominee of the Company Secretary to assist the Chairman in ensuring that the meetings are properly minuted and conducted.
  • Additional experts may be invited by the Chairman of the Risk Committee in a non-voting capacity to discuss specific topics relevant to the Risk Committee agenda.