Article 10
Assessment of recovery plans
1. CCPs shall submit their recovery plans to the competent authority.
2. The competent authority shall transmit each plan to the supervisory college and to the resolution authority without undue delay. The competent authority shall review the recovery plan and assess the extent to which it satisfies the requirements set out in Article 9 within six months of the submission of the plan and in coordination with the supervisory college in accordance with the procedure in Article 11.
3. When assessing the recovery plan, the competent authority and the supervisory college shall take into consideration the following factors:
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(a) |
the CCP’s capital structure, its default waterfall, the level of complexity of the organisational structure, the substitutability of its activities and the risk profile of the CCP, including in terms of financial, operational and cyber risks; |
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(b) |
the overall impact that the implementation of the recovery plan would have on:
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(c) |
whether the recovery tools and their sequence specified by the recovery plan create appropriate incentives for the CCP’s owners, clearing members, and where possible their clients, as relevant, to control the amount of risk that they bring to or incur in the system, monitor the CCP’s risk-taking and risk management activities and contribute to the CCP’s default management process. |
4. When assessing the recovery plan, the competent authority shall take parental support agreements into consideration as valid parts of the recovery plan only where those agreements are contractually binding.
5. The resolution authority shall examine the recovery plan in order to identify any measures which may adversely impact the resolvability of the CCP. Where any such measures are identified, the resolution authority shall bring them to the attention of the competent authority and make recommendations to the competent authority on ways to address the adverse impact of those measures on the resolvability of the CCP, within two months of the transmission of each recovery plan by the competent authority.
6. Where the competent authority decides not to act on the recommendations of the resolution authority pursuant to paragraph 5, it shall fully justify that decision to the resolution authority.
7. Where the competent authority agrees with the recommendations of the resolution authority, or considers in coordination with the supervisory college in accordance with Article 11 that there are material deficiencies in the recovery plan or material impediments to its implementation, it shall notify the CCP and shall give it the opportunity to submit its views.
8. The competent authority, taking into account the CCP’s views, may require the CCP to submit, within two months, extendable by one month with the competent authority’s approval, a revised plan demonstrating how those deficiencies or impediments are addressed. The revised plan shall be assessed in accordance with paragraphs 2 to 7.
9. Where the competent authority, after consulting the resolution authority and in coordination with the supervisory college in accordance with the procedure set out in Article 11, considers that the deficiencies and impediments have not been adequately addressed by the revised plan, or where the CCP has not submitted a revised plan, it shall require the CCP to make specific changes to the plan within a reasonable period, as defined by the competent authority.
10. Where it is not possible to adequately remedy the deficiencies or impediments through specific changes to the plan, the competent authority, after consulting the resolution authority and in coordination with the supervisory college in accordance with the procedure set out in Article 11, shall require the CCP to identify within a reasonable timeframe any changes to be made to its business in order to address the deficiencies in or impediments to the implementation of the recovery plan.
Where the CCP fails to identify such changes within the timeframe set by the competent authority, or where the competent authority, after consulting the resolution authority and in coordination with the supervisory college in accordance with the procedures set out in Article 11, considers that the actions proposed would not adequately address the deficiencies or impediments to the implementation of the recovery plan, the competent authority shall require the CCP to take within a reasonable period, as defined by the competent authority, specified actions with regard to one or more of the following objectives, taking into account the seriousness of the deficiencies and impediments and the effect of the measures on the CCP’s business and ability to remain in compliance with Regulation (EU) No 648/2012:
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(a) |
to reduce the risk profile of the CCP; |
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(b) |
to enhance the CCP’s ability to be recapitalised in a timely manner to meet its capital and prudential requirements; |
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(c) |
to review the CCP’s strategy and structure; |
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(d) |
to make changes to the default waterfall, recovery measures and other loss allocation arrangements so as to improve resolvability and the resilience of critical functions; |
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(e) |
to make changes to the governance structure of the CCP. |
11. The request referred to in the second subparagraph of paragraph 10 shall be reasoned and notified in writing to the CCP.
12. ESMA, in cooperation with the ESCB and the ESRB, shall develop draft regulatory technical standards further specifying the factors referred to in points (a), (b) and (c) of paragraph 3.
ESMA shall submit those draft regulatory technical standards to the Commission by 12 February 2022.
The Commission is empowered to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.