ESMA_QA_883
Status: ✅ Answer Published
Regulatory Context
Level 1 Regulation: Regulation 648/2012 - OTC derivatives, central counterparties and trade repositories (EMIR) - CCPs
Topic: EU-CCPs
Subject Matter: Definitions (old CCP question 14 dated 5/08/2013)
Question
Submission Date: 03-05-2023
Article 2(28) of EMIR provides that an “independent member” of the board means a member of the board who has no business, family or other relationship that raises a conflict of interests regarding the CCP concerned or its controlling shareholders, its management or its clearing members, and who has had no such relationship during the five years preceding his membership of the board. If a board member is considered independent in respect of the parent company of a CCP (according to the definition under Article 2(28) of EMIR), can this person also fulfil the requirements for being an independent board member of the CCP?
ESMA Answer
Answer Date: 05-08-2013
An independent director of the parent company of a CCP might be considered to satisfy the criteria for appointment as an independent director of a CCP; however this is not automatic and should be analysed properly. In particular, it would need to be carefully considered as to whether the individual’s relationship with the parent company of the CCP raised a conflict of interest regarding the CCP. For example, the individual would likely owe duties to the parent company of the CCP and be required to act in the best interests of that company. These interests and duties might conflict with the interests of the CCP.
Article 3(4) of the RTS on CCPs also requires that “a CCP that is part of a group shall take into account any implications of the group for its own governance arrangements including whether it has the necessary level of independence to meet its regulatory obligations as a distinct legal person and whether its independence could be compromised by the group structure or by any board member also being a
This document was automatically extracted from the ESMA EMIR Q&A database.