Commission Delegated Regulation (EU) 2023/451 of 25 November 2022 specifying the factors to be taken into consideration by the competent authority and the supervisory college when assessing the recovery plan of central counterparties (Text with EEA relevance)

New Commission Delegated Regulation (EU) 2023/451 as regards the factors that shall be considered by competent authorities and supervisory colleges when assessing a central counterparty’s (CCP) recovery plan pursuant to Article 10(12) of the Regulation on a framework for the recovery and resolution of central counterparties (CCPRRR) was published in the Official Journal (OJ) of the EU. According to the Delegated Regulations such factors shall include, but are not limited to the following:
– the capital structure of a CCP including the adequacy of financial resources to permit recapitalization – if so needed – and to cover any liquidity and funding gaps.
– the organizational structure of a CCP which shall be adequate to facilitate a quick and smooth application of a recovery plan, if needed. Assessment factors include, for instance, dependencies within a group, complexity of the structure, or existence of clear operating rules and governance policies.
– the risk profile of a CCP which must be reflected in the plan to ensure proper functioning of the recovery plan. Assessment factors shall thereby include the complexity of a CCP, its business scope and size and resulting possible effects on other market participants such as trading venues or intra-group firms.
– the level of preparedness of a CCP to possible recovery or resolution scenarios which entails that the assessment also includes an evaluation of the timeline stipulated in the recovery plan as to the application of recovery measures and the simple assessment of completeness of the plan.
– the description of communication and disclosures in the resolution plan which shall be made by a CCP in case the plan must be put into practice to ensure adequate communication between stakeholders and the affected CCP about implications, consequences, and the way forward.
– the inclusion of adequate incentives that allow a CCP and its stakeholders to facilitate the recovery of a failing CCP thereby ensuring a „fair and proportionate allocation of costs“.
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As these are only the key factors outlined in the Delegated Regulation, please refer to the original document for more detailed, comprehensive information.