Updated 18/10/2024
In force

Initial Legal Act
Amendments
Search within this legal act

Article 12 - Assessment of the overall impact of a CCP’s recovery plan on the financial system of any Member State and of the Union as a whole

Article 12

Assessment of the overall impact of a CCP’s recovery plan on the financial system of any Member State and of the Union as a whole

Competent authorities and supervisory colleges shall assess the adequacy of a CCP’s recovery plan in respect of the overall impact on the financial system of any Member State and of the Union as a whole by considering all of the following factors:

(a)

whether the potential impact has been assessed of the recovery plan on:

(i)

the financial stability of any Member State and of the Union as a whole arising as a result of possible contagion effects, including in terms of credit, liquidity or operational risks for clearing participants and interdependent FMIs;

(ii)

on the financial system of any Member State and of the Union as a whole resulting from one or more entities linked to the CCP or the CCP itself being impacted by the recovery plan;

(b)

whether, to assess the wider systemic risk impact of the recovery plan, the results from analyses performed occasionally by ESMA are considered and reflected upon, where relevant for the recovery plan, in the recovery plan and whether any relevant discoveries or concerns are mitigated, as far as possible, in that plan;

(c)

whether material links with entities, including liquidity providers, settlement banks, platforms, custodians, investment agents, banks or service providers have been considered by assessing how the recovery plan might impact the operations of the linked entities, and whether the measures contained in the recovery plan are suitable and workable for the entities with material links identified or could have a material negative impact on the financial system of any Member State and of the Union as a whole;

(d)

whether liquidity providers, where supervised by the CCP’s competent authority or to the extent information on their liquidity exposures is available, give rise to concentrated liquidity exposures due to the multiple roles those liquidity providers may play for several CCPs, including as clearing member, payment bank, investment bank, custodian, or provider of liquidity back-stop arrangement.