Reform history

(a) settlement fails the underlying cause of which is not attributable to the participants in the transaction;

(b) operations that are not considered as trading;

The competent authority shall monitor at least once per year that the threshold referred to in the first subparagraph is respected. The competent authority shall transmit its findings together with the underlying data to ESMA and EBA. The competent authority shall also transmit its findings to the members of the ESCB. Without prejudice to Article 40(1), where the competent authority determines that the threshold has been exceeded, the competent authority shall require the CSD concerned to seek authorisation in accordance with paragraph 2. The CSD concerned shall submit its application for authorisation within six months.

(c) it shall maintain sufficient qualifying liquid resources in all relevant currencies for a timely provision of settlement services under a wide range of potential stress scenarios including the liquidity risk generated by the default of at least two participants, including its parent undertakings and subsidiaries, to which it has the largest exposures;

(d) it shall mitigate the corresponding liquidity risks with qualifying liquid resources in each relevant currency, such as cash at the central bank of issue and at other creditworthy financial institutions, committed lines of credit or similar arrangements and highly liquid collateral or investments that are readily available and convertible into cash with prearranged and highly reliable funding arrangements, even in extreme but plausible market conditions, and it shall identify, measure and monitor its liquidity risk stemming from the various financial institutions used for the management of its liquidity risks;

(e) where prearranged and highly reliable funding arrangements, committed lines of credit or similar arrangements are used, it shall select only creditworthy financial institutions as liquidity providers; it shall establish and apply appropriate concentration limits for each of the corresponding liquidity providers including its parent undertaking and subsidiaries;

(i) it shall have prearranged and highly reliable arrangements to ensure that it can convert in a timely fashion the collateral provided to it by a defaulting client into cash and, where non-committed arrangements are used, establish that any associated potential risks have been identified and mitigated;