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The European Association of CCP Clearing Houses (EACH) welcomes the opportunity to provide feedback to the package of ESMA consultations on CCP resolution published in the context of the CCP Recovery and Resolution Regulation Level 2. EACH Members responded to the following four consultations:
- Draft RTS on the content of CCP resolution plans – EACH is of the opinion that the draft RTS enables sufficient flexibility and proportionality. However, EACH would like to kindly suggest a number of clarifications in relation to the provisions of the draft RTS to further specify the resolution plan. In addition, we would respectfully request that the description of non-default events takes into due consideration the various responsibilities, distinguishing among different types of non-default events.
- Draft RTS on the requirements on the valuation of a CCP’s assets and liabilities – EACH Members overall welcome the draft RTS, and support in particular the proposed conditions to assess whether a person considered for the position of independent valuer or appointed as independent valuer has the necessary qualifications and resources. However, further clarification would be appreciated concerning e.g. the valuation of replacement costs in the context of the NCWO.
- Draft Guidelines for the methodology to value each contract prior to termination – EACH generally agrees with the content of this consultation. We particularly welcome the proposed analysis of the concept of “contracts”, as well as the proposed analysis with regard to the valuation methodology.
- Draft Guidelines on the application of the circumstances under which a CCP is deemed to be failing or likely to fail – EACH Members overall welcome the draft Guidelines, however ESMA’s attention is drawn on draft Guideline 6, according to which resolution authorities should assess, amongst other circumstances, the potential loss of confidence of clearing members and stakeholders in the CCP’s ability to manage risks. EACH Members warn that a CCP’s loss of business to competitors may be linked to clearing members’ choice of clearing or other commercial decisions, rather than a lack of confidence in the CCP. We believe that this criteria is subjective, not in line with Level 1 and therefore suggest deleting it.
For more information, please find the EACH responses below or visit our website www.eachccp.eu
