Article 42
Bridge CCP tool
1. The resolution authority may transfer to a bridge CCP the following:
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(a) |
instruments of ownership issued by a CCP under resolution; |
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(b) |
any assets, rights, obligations or liabilities of the CCP under resolution. |
The transfer referred to in the first subparagraph may take place without obtaining the consent of the shareholders of the CCP under resolution or any third party other than the bridge CCP and without complying with any procedural requirements under company or securities law other than those provided for in Article 43.
2. The bridge CCP shall be a legal person that:
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(a) |
is controlled by the resolution authority and is wholly or partially owned by one or more public authorities which may include the resolution authority; and |
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(b) |
is established or used for the purpose of receiving and holding some or all of the instruments of ownership issued by a CCP under resolution or some or all of the assets, rights, obligations and liabilities of the CCP with a view to maintaining the critical functions of the CCP and subsequently selling the CCP. |
3. When applying the bridge CCP tool, the resolution authority shall ensure that the total value of liabilities and obligations transferred to the bridge CCP does not exceed the total value of the rights and assets transferred from the CCP under resolution.
4. Subject to Article 27(10), any consideration paid by the bridge CCP shall benefit:
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(a) |
the owners of the instruments of ownership, where the transfer to the bridge CCP has been effected by transferring instruments of ownership issued by the CCP under resolution from the holders of those instruments to the bridge CCP; |
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(b) |
the CCP under resolution, where the transfer to the bridge CCP has been effected by transferring some or all of the assets or liabilities of that CCP to the bridge CCP; |
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(c) |
any non-defaulting clearing members that have suffered losses following the application of the resolution tools in resolution, proportionate to their losses in resolution. |
5. The allocation of any consideration paid by the bridge CCP in accordance with paragraph 4 of this Article shall be carried out as follows:
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(a) |
upon the occurrence of an event covered by the CCP’s default waterfall as set out in Articles 43 and 45 of Regulation (EU) No 648/2012, in a reversal of the order in which the losses have been imposed by the CCP’s default waterfall; or |
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(b) |
upon the occurrence of an event not covered by the CCP’s default waterfall as set out in Articles 43 and 45 of Regulation (EU) No 648/2012, in a reversal of the order in which the losses were allocated in accordance with any applicable rules of the CCP. |
The allocation of any remaining consideration shall be carried out in accordance with the priority of claims under normal insolvency proceedings.
6. The resolution authority may exercise the transfer power referred to in paragraph 1 more than once in order to make supplemental transfers of instruments of ownership issued by a CCP or of its assets, rights, obligations or liabilities.
7. The resolution authority may transfer the rights, obligations, assets or liabilities that had been transferred to the bridge CCP back to the CCP under resolution, or the instruments of ownership back to their original owners where that transfer is expressly provided for in the instrument by which the transfer referred to in paragraph 1 is made.
Where the resolution authority uses the transfer power referred to in the first subparagraph, the CCP under resolution or original owners shall be obliged to take back any such assets, rights, obligations or liabilities, or instruments of ownership, provided that the conditions in the first subparagraph of this paragraph or in paragraph 8 are met.
8. Where the specific instruments of ownership, assets, rights, obligations or liabilities do not fall within the classes of, or meet the conditions for transfer of, instruments of ownership, assets, rights, obligations or liabilities specified in the instrument by which the transfer was made, the resolution authority may transfer them from the bridge CCP back to the CCP under resolution or the original owners.
9. A transfer referred to in paragraphs 7 and 8 may be made at any time, and shall comply with any other conditions stated in the instrument by which the transfer was made for the relevant purpose.
10. The resolution authority may transfer instruments of ownership or assets, rights, obligations or liabilities from the bridge CCP to a third party.
11. For the purposes of exercising its right to provide services in accordance with Regulation (EU) No 648/2012, a bridge CCP shall be considered to be a continuation of the CCP under resolution and may continue to exercise any such right that was exercised by the CCP under resolution in respect of the assets, rights, obligations or liabilities transferred.
For any other purposes, resolution authorities may require that a bridge CCP be considered to be a continuation of the CCP under resolution, and be able to continue to exercise any right that was exercised by the CCP under resolution in respect of the assets, rights, obligations or liabilities transferred.
12. The bridge CCP shall not be prevented from exercising the CCP’s rights of membership and accessing payment and settlement systems and other linked FMIs and trading venues, provided that it meets the criteria for membership and participation in those systems or FMIs or trading venues.
Notwithstanding the first subparagraph, the bridge CCP shall not be denied access to payment and settlement systems and other FMIs and trading venues on the ground that the bridge CCP does not possess a rating from a credit rating agency, or that that rating is below the rating levels required to be granted access to those systems or infrastructures or trading venues.
Where the bridge CCP does not meet the criteria referred to in the first subparagraph, the bridge CCP may continue to exercise the CCP’s rights of membership and accessing those systems and other infrastructures and trading venues for a period specified by the resolution authority. That period shall not exceed 12 months.
13. Shareholders, creditors, clearing members and clients of the CCP under resolution and other third parties whose assets, rights, obligations or liabilities are not transferred to the bridge CCP, shall have no rights over, or in relation to, the assets, rights, obligations or liabilities transferred to the bridge CCP, or against its board or senior management.
14. The bridge CCP shall have no duty or responsibility to shareholders or creditors of the CCP under resolution, and the board or senior management of the bridge CCP shall have no liability to those shareholders or creditors for acts and omissions in the discharge of their duties, unless the act or omission is due to gross negligence or serious misconduct in accordance with applicable national law.