(a) Backtest means the ex post comparison of realized outcomes with margin model forecasts
to analyze and monitor model performance and overall margin coverage.
(b) Central counterparty means an entity
that interposes itself between counterparties to contracts traded
in one or more financial markets, becoming the buyer to every seller
and the seller to every buyer.
(c) Central
securities depository means an entity that provides securities
accounts and central safekeeping services.
(d) Designated financial market utility means a financial market
utility that is currently designated by the Financial Stability Oversight
Council under section 804 of the Dodd-Frank Act (12 U.S.C. 5463).
(e) Financial market utility has the same
meaning as the term is defined in section 803(6) of the Dodd-Frank
Act (12 U.S.C. 5462(6)).
(f) Link means,
for purposes of section 234.3(a)(20), a set of contractual and operational
arrangements between two or more central counterparties, central securities
depositories, or securities settlement systems, or between one or more of
these financial market utilities and one or more trade repositories,
that connect them directly or indirectly, such as for the purposes
of participating in settlement, cross margining, or expanding their
services to additional instruments and participants.
(g) Orderly wind-down means the actions of a designated financial
market utility to effect the permanent cessation, sale, or transfer
of one or more of its critical operations or services in a manner
that would not increase the risk of significant liquidity or credit
problems spreading among financial institutions or markets and thereby
threaten the stability of the U.S. financial system.
(h) Recovery means, for purposes of section 234.3(a)(3) and
(15), the actions of a designated financial market utility, consistent
with its rules, procedures, and other ex ante contractual arrangements,
to address any uncovered loss, liquidity shortfall, or capital inadequacy,
whether arising from participant default or other causes (such as
business, operational, or other structural weaknesses), including
actions to replenish any depleted prefunded financial resources and
liquidity arrangements, as necessary to maintain the designated financial
market utility’s viability as a going concern and to continue its
provision of critical services.
(i) Securities
settlement system means an entity that enables securities to be
transferred and settled by book entry and allows transfers of securities
free of or against payment.
(j) Stress test means the estimation of credit or liquidity exposures that would
result from the realization of potential stress scenarios, such as
extreme price changes, multiple defaults, and changes in other valuation
inputs and assumptions.
(k) Supervisory Agency has the same meaning as the term is defined in section 803(8) of
the Dodd-Frank Act (12 U.S.C. 5462(8)).
(l) Trade repository means an entity that maintains a centralized
electronic record of transaction data, such as a swap data repository
or a security-based swap data repository.