Article 15
Other equivalent financial resources
1.
Other equivalent financial resources shall consist only of the financial resources or the credit protection referred to in paragraphs 2 to 4 and those referred to in Article 16.
2.
Other equivalent financial resources may include commercial bank guarantees provided by a creditworthy financial institution that fulfils the requirements set out in in Article 38(1) or a syndicate of such financial institutions that meet all of the following conditions:
(a)
they are issued by an issuer that has low credit risk based on an adequate internal assessment by the CSD-banking service provider, employing a defined and objective methodology that does not exclusively rely on external opinions and that takes into consideration the risk arising from the establishment of the issuer in a particular country;
(b)
they are denominated in a currency the risk of which the CSD-banking service provider is able to adequately manage;
(c)
they are irrevocable, unconditional and there is no legal or contractual exemption or option allowing the issuer to oppose the payment of the guarantee;
(d)
they can be honoured, on demand, within one business day, during the period of liquidation of the portfolio of the defaulting borrowing participant free of any regulatory, legal or operational constraint;
(e)
they are not issued by an entity that is part of the same group as the borrowing participant covered by the guarantee, or by an entity whose business involves providing services critical to the functioning of the CSD-banking service provider, unless that entity is an European Economic Area central bank or a central bank issuing a currency in which the CSD-banking service provider has exposures;
(f)
they are not subject to significant wrong-way risk within the meaning of Article 291 of Regulation (EU) No 575/2013;
(g)
they are fully guaranteed by collateral that meets the following conditions:
(i)
it is not subject to wrong way risk within the meaning of Article 291 of Regulation (EU) No 575/2013 based on a correlation with the credit standing of the guarantor or the borrowing participant, unless that wrong way risk has been adequately mitigated by a haircut applied to the collateral;
(ii)
the CSD-banking service provider has prompt access to the collateral and it is bankruptcy remote in case of the simultaneous default of the borrowing participant and the guarantor;
(iii)
the suitability of the guarantor has been ratified by the management body of the CSD-banking service provider after a full assessment of the issuer and of the legal, contractual and operational framework of the guarantee in order to have a high level of comfort on the effectiveness of the guarantee, and notified to the relevant competent authority in accordance with Article 60(1) of Regulation (EU) No 909/2014.
3.
Other equivalent financial resources may include bank guarantees issued by a central bank that meet all of the following conditions:
(a)
they are issued by a Union central bank or a central bank issuing a currency in which the CSD-banking service provider has exposures;
(b)
they are denominated in a currency the risk of which the CSD-banking service provider is able to adequately manage;
(c)
they are irrevocable, unconditional and the issuing central bank cannot rely on any legal or contractual exemption or option allowing the issuer to oppose the payment of the guarantee;
(d)
they are honoured within one business day.
4.
Other equivalent financial resources may include capital, after deducting the capital requirements of Articles 1 to 8, but only for the purposes of covering exposures to central banks, multilateral development banks and international organisations that are not exempted in accordance with Article 23(2).