(1)

When taking into consideration a CCP’s capital structure and risk profile to assess the recovery plan of that CCP, competent authorities and supervisory colleges should consider whether the recovery plan is appropriate to ensure the adequacy of the CCP’s financial resources, including where necessary to ensure a timely recapitalisation of the CCP, the replenishment of its pre-funded resources, and to address any funding and liquidity gap.

(2)

When taking into consideration a CCP’s default waterfall to assess the recovery plan of that CCP, competent authorities and supervisory colleges should consider whether the structure of that CCP’s default waterfall and loss-allocation rules are adequate to sustain all envisaged default losses scenarios, and whether those loss-allocation are legally enforceable.

(3)

When taking into consideration the complexity of a CCP’s organisational structure to assess the recovery plan of that CCP, competent authorities and supervisory colleges should consider whether that CCP’s ownership structure and governance arrangements are sufficiently clear and practicable to confirm the recovery plan’s feasibility and ensure a smooth implementation of the recovery measures.

(4)

When taking into consideration the substitutability of a CCP’s activities to assess the recovery plan of that CCP, competent authorities and supervisory colleges should consider how that CCP’s recovery plan envisages that part or all of the CCP’s clearing services could be provided by other authorized Union CCPs or recognized third-country CCPs to mitigate the risk of disruption of services that are essential to the real economy and to financial stability.

(5)

When taking into consideration a CCP’s risk profile to assess the recovery plan of that CCP, competent authorities and supervisory colleges should consider the business features and the governance and legal risks of that CCP to assess whether that CCP is in a position to undertake the measures set out in the recovery plan in a swift and efficient manner, regardless of the CCP’s specificities.

(6)

When taking into consideration a CCP’s preparedness to face stress that would endanger the CCP’s viability with the aim of assessing the recovery plan of that CCP, competent authorities and supervisory colleges should consider the adequacy of scenarios and indicators included in the recovery plan in light of that CCP’s specificities to ensure the credibility of the CCP’s level of preparedness to face such stress.

(7)

When taking into consideration a CCP’s business model to assess the recovery plan of that CCP, competent authorities and supervisory colleges should consider the suitability of the identification of critical functions in that recovery plan and how the recovery plan envisages to undertake a sale of assets or business lines to anticipate the effects of the activation of the recovery plan on clearing members, their clients and indirect clients, and outsourcing arrangements.

(8)

When taking into consideration the impact of a CCP’s recovery plan on certain entities in relation to communication, competent authorities and supervisory colleges should consider the adequacy of the CCP’s communication and disclosure procedures to share information as transparently as possible and manage potentially negative market reactions to the CCP’s difficulties.

(9)

When taking into consideration the impact of a CCP’s recovery plan on clearing members, competent authorities and supervisory colleges should consider how that CCP evaluates the complexity of its clearing membership to anticipate the impact of the recovery plan on clearing members’ clients and indirect clients, and consider their contractual obligations in any recovery scenario.

(10)

When taking into consideration the impact of a CCP’s recovery plan on linked market infrastructures, competent authorities and supervisory colleges should consider whether the implementation of that CCP’s recovery measures may affect the operations of a linked infrastructure to properly evaluate the impact of the resolution plan in terms of interoperability effects.

(11)

When taking into consideration the impact of a CCP’s recovery plan on financial markets served by the CCP, including trading venues, competent authorities and the supervisory colleges should consider any link with that CCP’s trading venues to anticipate any material impact of the recovery measures on the ability of a trading venue to process trades or establish prices.

(12)

When taking into consideration the impact of a CCP’s recovery plan on the financial system of any Member State and the Union as a whole, competent authorities and the supervisory colleges should evaluate the impact of recovery measures on entities with material links to that CCP, clearing members and FMIs to consider any contagion risk that may stem from the activation of the recovery plan. They should also consider the appropriateness of the incentives introduced by the recovery plan to ensure that the recovery measures and loss allocation tools are likely to optimise the likelihood of a successful recovery, with a fair and proportionate allocation of costs among that CCP’s shareholders, clearing members and their clients.

(13)

This Regulation is based on the draft regulatory technical standards submitted to the Commission by the European Securities and Market Authority (‘ESMA’).

(14)

ESMA developed the draft technical standards on which this Regulation is based in cooperation with the European System of Central Banks and the European Systemic Risk Board. ESMA conducted open public consultations on such draft regulatory technical standards, analysed the potential related costs and benefits and requested the advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (2),