Commission Delegated Regulation (EU) 2023/1615 of 3 May 2023 supplementing Regulation (EU) 2021/23 of the European Parliament and of the Council with regard to regulatory technical standards specifying the conditions under which compensation, cash equivalent of such compensation or any proceeds that are due pursuant to Article 63(1) of that Regulation are to be passed on to clients and indirect clients and the conditions under which passing on is to be considered proportionate (Text with EEA relevance)

New Commission Delegated Regulation (EU) 2023/1615 specifying the conditions under which a client of a clearing member may be reimbursed for any losses that were passed on to it in accordance with contractual arrangements with the clearing member and the conditions under which such disbursement to customers is deemed to be proportionate was published in the Official Journal (OJ) of the EU.
#### Background
Clearing members (clearing service providers) typically have arrangements in place with their clients (clearing users) that stipulate that – in case of the application of resolution tools to a failing central counterparty (CCP) – the losses can be passed on to the clients. Similarly, such arrangements must also ensure that – if subsequently any of these losses are recovered by the clearing member (e.g. from potential future income of the CCP) – these assets must be distributed to the member’s clients that have suffered the losses.
#### This new delegated regulation specifies
– the type of reimbursements that may be made to clients in case of the recovery of any losses by the clearing member (e.g. cash, financial instruments);
– the manner in which the reimbursements to clients shall be made such as
– all clients must be treated fairly and impartially;
– the reimbursements must be based on the contributions made by users to the resolution of the CCP;
– distribution should avoid subordination clauses and ranking mechanisms to maintain equality among users entitled to compensation; or
– the amount of reimbursement should not be offset, unless the clearing user owes money to the clearing member;
– the delivery mechanism for the reimbursements which also includes the requirement to accommodate users unable or unwilling to receive specific assets by transferring them to nominated recipients or selling them in the market and transferring the proceeds to the user; and
– the notification requirements of clearing members as regards any future delivery of reimbursements.