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CCPRRR ToolDelegated Regulation 2024/450
Article 8

Article 8 - Delegated Regulation 2024/450

Article 8

Viability performance criteria

The business reorganisation plan shall fulfil all of the following viability performance criteria:

(a)

the CCP shall be able, in accordance with its internal rules and regulations, to undertake the measures set out in the business reorganisation plan;

(b)

the CCP, by implementing the business reorganisation plan, shall be able, within a reasonable timeframe, to restore the long-term viability and to continue to provide clearing services in accordance with Regulation (EU) No 648/2012 in the following manner:

(i)

the CCP does not pose a significant risk to the financial system, considering in particular an assessment of the concentration of the pool of clearing participants;

(ii)

the CCP provides a clearing service which is stable and viable, considering in particular:

(1)

the estimated flow of transactions that will be submitted for clearing to the CCP;

(2)

the estimated number of clearing members at the CCP;

(3)

the CCP’s ability to ensure liquidity in the instruments cleared;

(4)

the material contractual agreements that will be maintained, and the extent to which such contracts contain contractual resilience clauses, resolution-proof clauses and limitations of termination rights in a business reorganisation;

(5)

the internal agreements that will be maintained during the application of the business reorganisation plan, including descriptions of any arms’ length pricing structures and planned continued access to operational assets;

(6)

the envisaged continuation of services to the CCP following the application of the business reorganisation plan, evidenced by letters of commitment of the service providers and where no such letters have been received, the CCP’s assessment that the termination of such service will not be detrimental to the CCP’s operational or financial viability;

(c)

the business reorganisation plan shall include a description of the method for determining the value and marketability of the critical functions and assets of the CCP, focusing on aspects that could have an impact on the valuation, including volatility in the market, inaccessibility or uncertainty of the market prices, time constraints and legal aspects;

(d)

the valuations under the business reorganisation plan shall cover both the assets and business lines of the CCP that are to be wound up or sold, and the assets and business lines that are to remain within the CCP;

(e)

any proceeds from the divestment of assets or business lines envisaged by the business reorganisation plan shall be calculated prudently and with reference either to a reliable benchmark or to a valuation, including an expert valuation, a market sounding exercise or the value of similar assets or business lines;

(f)

the CCP, by implementing the business reorganisation plan, shall be able to fulfil all the applicable prudential and other regulatory requirements on a forward-looking basis, in particular:

(i)

the CCP will no longer be breaching any requirement or will prevent a likely infringement of those requirements from materialising;

(ii)

the CCP ensures the continuous functioning of its operational processes as referred to in Article 12(7), point (m), of Regulation (EU) 2021/23;

(g)

where the resolution is to be accompanied by the replacement of the management and where such restructuring is to be achieved through the implementation of a business reorganisation plan, the business reorganisation plan shall address a restructuring that includes the replacement of management;

(h)

to the best knowledge of the CCP, the implementation of the measures set out in the business reorganisation shall have no material negative effect on market and financial stability;

(i)

the CCP has not identified issues relating to Union or national competition law that could arise from the implementation of the business reorganisation plan.