In November 2025, 38 central counterparties (‘CCPs’) from across the world, together with clearing members, conducted a coordinated fire drill exercise simulating the failure of a hypothetical common participant. Known as the CCP Global International Default Simulation (CIDS), the exercise aimed to promote preparedness and coordination across jurisdictions.
ESMA participated in the lead authorities’ group together with Bundesbank, BaFin, the Commodity Futures Trading Commission and the Bank of England. The group advised on the design of the exercise, monitored its execution, surveyed participants to draw lessons learned and inform design improvements for future exercises.
The report published by the lead authorities summarises the 2025 exercise outcomes and sets out feedback from participating clearing members and clients, alongside the observations and recommendations of the lead authorities. The report follows ESMA’s 2023 report on the Global CCP fire drill.
The report highlights several areas where lead authorities expect further progress in the next iteration of the exercise:
- Encourage industry-led progress to reduce fragmentation in procedures and communication conventions employed by CCPs, and promote greater use of portal-based solutions.
- Support more realistic testing of porting arrangements to better reflect operational conditions.
- Consider implementing a voluntary “market stress overlay” module with a coherent cross-CCP macro stress scenario as to fully test operational capacity and constraints under stressed but plausible market conditions.
Global fire‑drills strengthen the collective understanding of default management processes and improve operational readiness across the financial system, reinforcing the value of these exercises as a core component of system‑wide resilience.
Source: ESMA
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