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CCPRRR ToolDelegated Regulation 2023/451
Article 7

Article 7 - Assessment of the risk profile of the CCP in relation to the business model

Article 7

Assessment of the risk profile of the CCP in relation to the business model

Competent authorities and supervisory colleges shall assess a CCP’s recovery plan’s adequacy in respect of the operational risk of the business model of that CCP by considering all of the following factors:

(a)

whether the critical functions of the CCP are properly identified;

(b)

whether the preparatory arrangements to facilitate the sale of assets or business lines, as envisaged in the recovery plan, are suitable for the CCP, taking into account all of the following:

(i)

whether the processes for determining the value and marketability of the core business lines, operations and assets of the CCP are suitable for a rapid and trustworthy assessment;

(ii)

whether the timeframe envisaged to prepare the sale is appropriate considering the type of instruments cleared and the scope of the sale;

(iii)

whether the assessment of the potential impact of such a sale on the operations of the CCP is reflecting the specific operations of the CCP, i.e. the type of products cleared or margining methods applicable to products and account structures;

(iv)

whether the impact of the preparatory arrangements of the business lines on clearing members and their clients and indirect clients, where possible to identify, are sufficiently assessed and whether any negative effects are mitigated;

(c)

where the CCP clears several products, whether the CCP has considered the potential of splitting a sale between products, and whether any impediments have been identified as an effect of such a split or if any other effect on the recovery plan has been identified by such a split sale;

(d)

whether the number and importance of different links with entities, including liquidity providers, settlement banks, platforms, custodians, investment agents, banks or service providers have been assessed in the recovery plan and how such links impact the recovery measures and the effectiveness of the recovery plan;

(e)

whether the significance or materiality of each link has been assessed, including in terms of volumes cleared and the financial exposures under those arrangements;

(f)

whether any outsourcing arrangements that cover part of the CCP’s core business have been sufficiently assessed and whether any identified risks have been mitigated;

(g)

how the legal enforceability of the recovery plan against service providers of outsourcing arrangements as referred to in point (f) has been assessed and whether any inability of the provider of such outsourced arrangements to comply with its obligations under the outsourcing arrangements has been satisfactorily assessed and how those risks have been mitigated in the recovery plan.