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III Default Management, 12 Recovery and Resolution of CCPs

Victor de Serière

From: Clearing OTC Derivatives in Europe

Edited By: Bas Zebregs, Victor de Seriere, Rezah Stegeman, Patrick Pearson

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 13 April 2024

Recovery and Resolution Plan (RRP) — Derivatives — International Organisation of Securities Commissions (IOSCO) — Central counterparty (CCP) — Investment business — Bank for International Settlement (BIS) — Financial Stability Board (FSB)

This chapter explores the European rules on recovery and resolution of central counterparties (CCPs), as set out in Regulation (EU) No. 2021/23 of 16 December 2020 (the Regulation). The Regulation provides a detailed regime to apply to CCPs that fail or threaten to fail. It deals with anticipatory recovery and resolution planning, early intervention measures, and, ultimately, resolution. The resolution regime kicks in if it is determined that resolution is necessary in the public interest, as will more likely than not be the case for most CCPs. The Regulation is, to a large extent, inspired by the European rules on the recovery and resolution of banks and larger investment firms, which, to date, remain largely untested. However, the Regulation takes into account the functions and organizational structures of CCPs, which are fundamentally different from those particular to banks, and it is aligned and complementary to the more general provisions of the European Market Infrastructure Regulation (EMIR).

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