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Article 2 – Requirements relating to safeguards on financial soundness ⬅️ | ➡️ Article 4 – Assessment of safeguards
Article 3 - Requirements relating to safeguards on sound liquidity risk management
1.
In order to safeguard their sound liquidity risk management with respect to the euro, eligible CCPs shall meet the following requirements on an ongoing basis:
(a)
have liquidity risk controls in place to ensure that access to the CCP credit facility or – where such access is available to CCPs authorised as credit institutions under Regulation (EU) No 575/2013 – to Eurosystem monetary policy operations, shall:
(i)
be a last resort;
(ii)
be limited to scenarios which due to their severity may present considerable challenges for the liquidity management of the CCP (‘crisis scenarios’);
(iii)
constitute a temporary funding source on the basis of a credible plan to reimburse the amount used under the CCP credit facility or – where such access is available to CCPs authorised as credit institutions under Regulation (EU) No 575/2013 – under Eurosystem monetary policy operations as soon as possible;
(iv)
not be for the purpose of meeting payment obligations in relation to currencies other than the euro;
(b)
meet the requirements in relation to liquidity risk controls in accordance with 2012.
2.
In the event of the default of a clearing member where the CCP conducts its default management process in accordance with Articles 45 and 48 of Regulation (EU) No 648/2012 and as a result uses the liquid resources referred to in 2012, the following shall apply:
(a)
with respect to the requirement set out in paragraph 1, point (a), the assessment conducted in accordance with Article 4 may be conducted after the CCP has completed the default management process;
(b)
on the basis of the assessment conducted in accordance with Article 4, the Eurosystem central banks may decide to temporarily waive the requirement set out in paragraph 1, point (b), where the CCP presents a plan to replenish the liquid resources as referred to in 2012 in a credible and timely manner.
3.
For the purpose of assessing a CCP’s compliance with paragraph 1, point (a), the following may be taken into account:
(a)
the liquidity risk due to overreliance on a single type of private funding arrangement;
(b)
the liquidity risk due to overreliance on too few private liquidity providers;
(c)
the liquidity risk due to the low number of private liquidity providers of the CCP that have access to the Eurosystem’s monetary policy operations.
4.
With respect to paragraph 1, point (b), the Eurosystem central banks may take the following into account for the purpose of assessing the extent to which the private funding arrangements are pre-arranged and highly reliable, including under stressed market conditions:
(a)
the scope and degree of the due diligence to which private funding arrangements are subjected by the CCP;
(b)
the comprehensiveness and frequency of the testing of access to private funding arrangements, and the methodology and stress scenario context utilised for this purpose;
(c)
the validation of the test results, in particular in relation to the estimated amounts of liquidity provision on the basis of the private funding arrangements.