Article 22
Conditions for resolution
1. The resolution authority shall take a resolution action in relation to a CCP provided that all of the following conditions are met:
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(a) |
the CCP is failing or is likely to fail as determined by any of the following:
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(b) |
there is no reasonable prospect that any alternative private sector measures, including the CCP’s recovery plan or other contractual arrangements, or supervisory action, including early intervention measures taken, would prevent the failure of the CCP within a reasonable timeframe, having regard to all relevant circumstances; |
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(c) |
a resolution action is necessary in the public interest to achieve, while being proportionate to, one or more of the resolution objectives, and winding up the CCP under normal insolvency procedures would not meet those resolution objectives to the same extent. |
2. For the purposes of point (a)(ii) of paragraph 1, the competent authority shall provide the resolution authority on its own initiative and without delay with any information that may give an indication that the CCP is failing or likely to fail. The competent authority shall also provide the resolution authority upon request with any other information needed in order to perform its assessment.
3. For the purposes of point (a) of paragraph 1, a CCP shall be deemed to be failing or likely to fail where one or more of the following circumstances apply:
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(a) |
the CCP infringes, or is likely to infringe, its authorisation requirements in a way that would justify the withdrawal of its authorisation pursuant to Article 20 of Regulation (EU) No 648/2012; |
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(b) |
the CCP is unable, or is likely to be unable, to provide a critical function; |
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(c) |
the CCP is unable, or is likely to be unable, to restore its viability through the implementation of its recovery measures; |
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(d) |
the CCP is unable, or is likely to be unable, to pay its debts or other liabilities as they fall due; |
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(e) |
the CCP requires extraordinary public financial support. |
4. For the purposes of point (e) of paragraph 3, public financial support shall not be considered extraordinary public financial support where it meets all of the following conditions:
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(a) |
it takes the form of a State guarantee to back liquidity facilities provided by a central bank according to the central bank’s conditions, or the form of a State guarantee of newly issued liabilities; |
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(b) |
the State guarantees referred to in point (a) of this paragraph are required to remedy a serious disturbance in the economy of a Member State and preserve financial stability; and |
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(c) |
the State guarantees referred to in point (a) of this paragraph are confined to solvent CCPs, conditional on final approval under the Union State aid framework, are of a precautionary and temporary nature, proportionate to remedy the consequences of the serious disturbance referred to in point (b) of this paragraph and are not used to offset losses that the CCP has incurred or is likely to incur in the future. |
5. The resolution authority may also take a resolution action where it considers that the CCP has applied or intends to apply recovery measures which could prevent the CCP’s failure but cause significant adverse effects to the financial system of the Union or of one of more of its Member States.
6. ESMA shall issue guidelines to promote the convergence of supervisory and resolution practices regarding the application of the circumstances under which a CCP is deemed to be failing or likely to fail by 12 February 2022, taking into consideration, as appropriate, the nature, and complexity of the services provided by CCPs established in the Union.
When developing those guidelines, ESMA shall take into account the guidelines issued in accordance with Article 32(6) of Directive 2014/59/EU.