CHICAGO--(BUSINESS WIRE)--OCC, the world’s largest equity derivatives clearing organization, today commented on the reaffirmation of its AA+/Stable rating by Standard & Poor’s (S&P). S&P published their rating on December 28, 2017.
“We are pleased that S&P has again reaffirmed OCC’s AA+/Stable rating,” said Craig Donohue, OCC Executive Chairman and Chief Executive Officer. “S&P’s decision is a powerful recognition of our efforts to strengthen OCC’s financial safeguards framework and to promote stability and market integrity through effective and efficient clearance, settlement and risk management services.
“This decision also reflects favorably on the outstanding work being performed every day by our entire team to strengthen the resiliency, risk management, and capitalization of OCC. We will continue to deliver on these initiatives in order to serve our exchanges, clearing firms, and market participants, and to ensure confidence in the financial markets and the broader economy.”
In its report, S&P said OCC’s outlook is stable because it expects OCC “to implement the new financial safeguards in 2018, provided it receives regulatory approval.” S&P also noted that OCC “enjoys large economies of scale and has ample capacity to absorb up to 2.5 times the largest historical trading volumes per day with the current OCC systems. As a processor of over 17.5 million contracts daily, we consider OCC's operational risk to be high. The company must meet the demands of its members and the trading community at large, which requires exceptional technology and back-office operations. In our opinion, operational risk receives an appropriate level of attention and resources, and is well managed (including technology and recovery centers).”
John Davidson, OCC President and Chief Operating Officer and who oversees the company’s technology and operations functions, said, “OCC appreciates S&P’s recognition of our exceptional technology and operations, as well as our keen focus on managing operational risk. This is a product of our continuing investment in human and technology resources, plus a durable working relationship with our clearing firms and exchange partners.”
OCC received an AA+/Stable rating from S&P in June 2013, which was reaffirmed in 2015 and 2016.
OCC is the world's largest equity derivatives clearing organization and the foundation for secure markets. Founded in 1973, OCC operates under the jurisdiction of both the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) as a Derivatives Clearing Organization. Named 2016 Clearinghouse of the Year - The Americas by FOW Magazine and 2016 Clearinghouse of the Year by Global Investor/ISF Magazine, OCC now provides central counterparty (CCP) clearing and settlement services to 19 exchanges and trading platforms for options, financial futures, security futures, and securities lending transactions. More information about OCC is available at www.theocc.com.