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Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020 on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365 and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 (Text with EEA relevance)

Type Regulation

Publication 2020-12-16

Last updated 2026-04-15

State In force

Department Council of the European Union, European Parliament

Source EUR-Lex

articles 100

Reform history JSON API

(b) the shareholders of the CCP under resolution bear first losses following the enforcement of all obligations and arrangements referred to in point (a) and in accordance with that point;

(c) creditors of the CCP under resolution bear losses after the shareholders in accordance with the order of priority of their claims under normal insolvency proceedings, unless expressly provided otherwise in this Regulation;

(d) the CCP’s creditors of the same class are treated in an equitable manner;

(e) the CCP’s shareholders, clearing members and other creditors should not incur greater losses than they would have incurred in the circumstances referred to in Article 60;

(f) the board and senior management of the CCP under resolution are replaced, except where the resolution authority considers that the retention of the board and senior management, in whole or in part, is necessary for the achievement of the resolution objectives;

(g) resolution authorities inform and consult employee representatives in accordance with their national laws, collective agreements or practice;

(h) resolution tools are applied and resolution powers are exercised without prejudice to provisions on the representation of employees in management bodies as provided for in national laws, collective agreements or practice; and

(i) where a CCP is part of a group, resolution authorities take account of the impact on other group entities, in particular where such group comprises other FMIs, and on the group as a whole.

Resolution authorities may take a resolution action which deviates from the principles set out in points (d) or (e) of paragraph 1 of this Article where it is justified in the public interest to achieve the resolution objectives and is proportionate to the risk addressed. However, where that deviation results in a shareholder, a clearing member or any other creditor incurring greater losses than it would have incurred in the circumstances referred to in Article 60, the entitlement to payment of the difference under Article 62 shall apply.

The board and senior management of a CCP under resolution shall provide the resolution authority with all necessary assistance for the achievement of the resolution objectives.

CHAPTER II

Valuation

Article 24

Objectives of valuation

Resolution authorities shall ensure that any resolution action is taken on the basis of a valuation ensuring a fair, prudent and realistic assessment of the assets, liabilities, rights and obligations of the CCP.

Before the resolution authority places a CCP under resolution, it shall ensure that a first valuation is carried out to determine whether the conditions for resolution under Article 22(1) are met.

After the resolution authority has decided to place a CCP under resolution, it shall ensure that a second valuation is carried out to:

(a) inform the decision on the appropriate resolution action to be taken;

(b) ensure that any losses on the assets and rights of the CCP are fully recognised at the moment the resolution tools are applied;

(c) inform the decision on the extent of the cancellation or dilution of instruments of ownership and the decision on the value and number of instruments of ownership issued or transferred as a result of the exercise of resolution powers;

(d) inform the decision on the extent of the write-down or conversion of any unsecured liabilities, including debt instruments;

(e) where the loss and position allocation tools are applied, inform the decision on the extent of losses to be applied against affected creditors’ claims, outstanding obligations or positions in relation to the CCP and on the extent and necessity of a resolution cash call;

(f) where the bridge CCP tool is applied, inform the decision on the assets, liabilities, rights and obligations or instruments of ownership that may be transferred to the bridge CCP and the decision on the value of any consideration that may be paid to the CCP under resolution or, where relevant, to the holders of the instruments of ownership;

(g) where the sale of business tool is applied, inform the decision on the assets, liabilities, rights and obligations or instruments of ownership that may be transferred to the third party purchaser and to inform the resolution authority’s understanding of what constitutes commercial terms for the purposes of Article 40.

For the purposes of point (d), the valuation shall take into account any losses that would be absorbed by the enforcement of any outstanding obligations of the clearing members or other third parties owed to the CCP and the level of conversion to be applied to debt instruments.

The valuations referred to in paragraphs 2 and 3 of this Article may be subject to an appeal in accordance with Article 74 only together with the decision to apply a resolution tool or to exercise a resolution power.

Article 25

Requirements for valuation

The resolution authority shall ensure that the valuations referred to in Article 24 are carried out:

(a) by a person independent from any public authority and from the CCP; or

(b) by the resolution authority, where those valuations cannot be carried out by a person as referred to in point (a).

The valuations referred to in Article 24 shall be considered definitive where they are carried out by the person referred to in point (a) of paragraph 1 of this Article and all the requirements laid down in this Article are fulfilled.

Without prejudice to the Union State aid framework, where applicable, a definitive valuation shall be based on prudent assumptions and shall not assume any potential provision of extraordinary public financial support, any central bank emergency liquidity assistance or any central bank liquidity assistance provided under non-standard collateralisation, tenor and interest rate terms to the CCP from the point in time at which resolution action is taken. The valuation shall also take account of the potential recovery of any reasonable expenses incurred by the CCP under resolution in accordance with Article 27(10).

A definitive valuation shall be supplemented by the following information held by the CCP:

(a) an updated balance sheet and a report on the financial position of the CCP, including the remaining available pre-funded resources and outstanding financial commitments;

(b) the records of cleared contracts referred to in Article 29 of Regulation (EU) No 648/2012; and

(c) any information on the market and accounting values of its assets, liabilities and positions, including relevant claims and outstanding obligations owed or due to the CCP.

A definitive valuation shall indicate the subdivision of the creditors in classes in accordance with their priority levels under the applicable insolvency law. It shall also include an estimate of the treatment that each class of shareholders and creditors would have been expected to receive in application of the principle specified in point (e) of Article 23(1).

The estimate referred to in the first subparagraph shall not prejudice the valuation referred to in Article 61.

ESMA, taking into account the regulatory technical standards developed in accordance with Article 36(14) and (15) of Directive 2014/59/EU and adopted pursuant to Article 36(16) thereof, shall develop draft regulatory technical standards to specify:

(a) the circumstances in which a person is deemed to be independent from both the resolution authority and from the CCP for the purposes of paragraph 1 of this Article;

(b) the methodology for assessing the value of the assets and liabilities of the CCP; and

ESMA shall submit those draft regulatory technical standards to the Commission by 12 February 2022.

The Commission is empowered to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 26

Provisional valuation

The valuations referred to in Article 24 that do not meet the requirements laid down in Article 25(2) shall be considered to be provisional valuations.

Provisional valuations shall include a buffer for additional losses and an appropriate justification for that buffer.

Where resolution authorities take resolution action on the basis of a provisional valuation, they shall ensure that a definitive valuation is carried out as soon as practicable.

The resolution authority shall ensure that the definitive valuation referred to in the first subparagraph:

(a) allows for full recognition of any losses of the CCP in its books;

(b) informs a decision to write back creditors’ claims or to increase the value of the consideration paid, in accordance with paragraph 3.

Where the definitive valuation’s estimate of the net asset value of the CCP is higher than the provisional valuation’s estimate of the net asset value of the CCP, the resolution authority may:

(a) increase the value of the claims of affected creditors which have been written down or restructured;

(b) require a bridge CCP to make a further payment of consideration in respect of the assets, liabilities, rights and obligations to the CCP under resolution or, as the case may be, in respect of the instruments of ownership to the owners of those instruments.

ESMA, taking into account the regulatory technical standards developed in accordance with Article 36(15) of Directive 2014/59/EU and adopted pursuant to Article 36(16) thereof, shall develop draft regulatory technical standards to specify, for the purposes of paragraph 1 of this Article, the methodology for calculating the buffer for additional losses to be included in provisional valuations.

ESMA shall submit those draft regulatory technical standards to the Commission by 12 February 2022.

CHAPTER III

Resolution tools

Section 1

General principles

Article 27

General provisions on resolution tools

Resolution authorities shall take resolution actions referred to in Article 21 by applying any of the following resolution tools individually or in any combination:

(a) the position and loss allocation tools;

(b) the write-down and conversion tool;

(d) the bridge CCP tool.

In the event of a systemic crisis, a Member State may as a last resort provide extraordinary public financial support by applying government stabilisation tools in accordance with Articles 45, 46 and 47 on the condition of prior and final approval under the Union State aid framework and where credible arrangements for the timely and comprehensive recovery of the funds in accordance with paragraph 10 of this Article are provided for.

Prior to the application of the tools referred to in paragraph 1, the resolution authority shall enforce:

(a) any existing and outstanding rights of the CCP, including any contractual obligations by clearing members to meet recovery cash calls, to provide additional resources to the CCP, or to take on positions of defaulting clearing members, whether through an auction or other agreed means in the CCP’s operating rules;

(b) any existing and outstanding contractual obligation committing parties other than clearing members to any forms of financial support.

The resolution authority may partially enforce the contractual obligations referred to in points (a) and (b) where it is not possible to enforce those contractual obligations in full within a reasonable timeframe.

By way of derogation from paragraph 3, the resolution authority may refrain from enforcing the relevant existing and outstanding obligations either partially or in full to avoid significant adverse effects on the financial system or widespread contagion, or where the application of the tools referred to in paragraph 1 is more appropriate in order to achieve the resolution objectives in a timely manner.

In the event that the resolution authority refrains partially or fully from enforcing existing and outstanding obligations as set out in the second subparagraph of paragraph 3 or in paragraph 4 of this Article, the resolution authority may enforce the remaining obligations within 18 months after the CCP is considered to be failing or likely to fail in accordance with Article 22, provided that the reasons for refraining from enforcing those obligations no longer exist. The resolution authority shall notify the clearing member and other party three to six months before enforcing the remaining obligation. The proceeds from the enforced remaining obligations shall be used to recover the use of public funds.

The resolution authority shall, after consultation with the competent authorities and resolution authorities of the affected clearing members and any other parties committed by existing and outstanding obligations, determine whether the reasons for refraining from enforcing the existing and outstanding obligations have ceased to exist and whether to enforce remaining obligations. Where the resolution authority deviates from the views expressed by the authorities consulted, it shall provide duly justified reasons, in writing, for doing so.

The requirement to meet the remaining obligations in the circumstances referred to in this paragraph shall be included in the CCP’s rules and other contractual arrangements.

The resolution authority may require the CCP to compensate non-defaulting clearing members for their losses stemming from the application of loss allocation tools, where those losses are in excess of the losses that the non-defaulting clearing member would have borne under their obligations under the CCP’s operating rules, provided that the non-defaulting clearing member would have been entitled to the payment of the difference referred to in Article 62.

The compensation referred to in the first subparagraph may take the form of instruments of ownership, debt instruments or instruments recognising a claim on the CCP’s future profits.

The amount of instruments issued to each affected non-defaulting clearing member shall be proportionate to the excess loss referred to in the first subparagraph. It shall take account of any outstanding contractual obligations of the clearing members toward the CCP and be deducted from any entitlement to the payment of the difference referred to in Article 62.

The amount of instruments shall be based on the valuation conducted in accordance with Article 24(3).

Where one of the government stabilisation tools is applied, the resolution authority shall exercise the power to write down and convert any instruments of ownership and debt instruments or other unsecured liabilities before or together with the application of the government stabilisation tool.

Where the application of a resolution tool other than the write-down and conversion tool results in financial losses being borne by clearing members, the resolution authority shall exercise the power to write down and convert any instruments of ownership and debt instruments or other unsecured liabilities immediately before or together with the application of the resolution tool, unless applying a different sequence would minimise deviations from the ‘no creditor worse off’ principle set out in Article 60 and better achieve the resolution objectives.

Where only the resolution tools referred to in points (c) and (d) of paragraph 1 of this Article are applied, and only part of the assets, rights, obligations or liabilities of the CCP under resolution are transferred in accordance with Articles 40 and 42, the residual part of that CCP shall be wound up in accordance with normal insolvency proceedings.

National insolvency law rules relating to the voidability or unenforceability of legal acts detrimental to creditors shall not apply to transfers of assets, rights, obligations or liabilities from a CCP in relation to which resolution tools or government financial stabilisation tools are applied.

10.

Member States shall recover over an appropriate period any public funds used as government financial stabilisation tools as referred to in Section 7 of this Chapter and resolution authorities shall recover any reasonable expenses incurred by them in connection with the application of the resolution tools or powers. Such recovery shall, inter alia, come from:

(a) the CCP under resolution, as a preferred creditor, including any of its claims against defaulting clearing members;

(b) any consideration paid by the purchaser to the CCP, as a preferred creditor prior to the application of Article 40(4), where the sale of business tool has been applied;

(c) any proceeds generated as a result of the termination of the bridge CCP, as a preferred creditor prior to the application of Article 42(5);

(d) any proceeds generated by the application of the public equity support tool referred to in Article 46 and the temporary public ownership tool referred to in Article 47, including the proceeds generated from their sale.

11.

When applying the resolution tools, resolution authorities shall ensure, on the basis of a valuation that complies with Article 25, the restoration of a matched book, the full allocation of losses, the replenishment of the pre-funded resources of the CCP or the bridge CCP, and the recapitalisation of the CCP or the bridge CCP.

Resolution authorities shall ensure the replenishment of the pre-funded resources and the recapitalisation of the CCP or the bridge CCP as referred to in the first subparagraph, to an extent sufficient to restore the ability of the CCP or the bridge CCP to comply with the conditions for authorisation and to continue to carry out the critical functions of the CCP or the bridge CCP, taking into account the operating rules of the CCP or the bridge CCP.

Notwithstanding the application of other resolution tools, resolution authorities may apply the tools referred to in Articles 30 and 31 to recapitalise the CCP.

Section 2

Position allocation and loss allocation tools

Article 28

Objective and scope of the position and loss allocation tools

Resolution authorities shall apply the position allocation tool in accordance with Article 29 and the loss allocation tools in accordance with Articles 30 and 31.

Resolution authorities shall apply the tools referred to in paragraph 1 in respect of contracts relating to clearing services and the collateral related to those services posted to the CCP.

Resolution authorities shall apply the position allocation tool referred to in Article 29 in order to rematch the book of the CCP or bridge CCP where relevant.

Resolution authorities shall apply the loss allocation tools referred to in Articles 30 and 31 for any of the following purposes:

(a) to cover the losses of the CCP assessed in accordance with Article 25;

(b) to restore the ability of the CCP to meet payment obligations as they fall due;

(d) to support the transfer of the CCP’s business by way of the sale of business tool to a solvent third party.

The loss allocation tool referred to in Article 30 may be applied by the resolution authorities in relation to losses arising from a default event and in relation to losses arising from a non-default event. If the loss allocation tool referred to in Article 30 is applied in relation to losses arising from a non-default event, it shall only be applied up to a cumulative amount equivalent to the non-defaulting clearing members’ contribution to the CCP’s default funds and distributed among clearing members proportionally to their contributions to the default funds.

Resolution authorities shall not apply the loss allocation tools referred to in Articles 30 and 31 of this Regulation with regard to the entities referred to in Articles 1(4) and 1(5) of Regulation (EU) No 648/2012.

Article 29

Termination of contracts – partial or full

The resolution authority may terminate some or all of the following contracts of the CCP under resolution:

(a) the contracts with the clearing member in default;

(b) the contracts of the affected clearing service or asset class;

The resolution authority shall terminate the contracts referred to in point (a) of the first subparagraph of this paragraph only where the transfer of the assets and positions resulting from those contracts has not taken place within the meaning of Article 48(5) and (6) of Regulation (EU) No 648/2012.

When using the power under the first subparagraph, the resolution authority shall terminate contracts referred to under each of points (a), (b) and (c) of the first subparagraph in a similar way, without discriminating between counterparties to those contracts, with the exception of those contractual obligations that cannot be enforced in a reasonable timeframe.

The resolution authority shall give notice to all relevant clearing members of the date on which any contract referred to in paragraph 1 is terminated.

Prior to the termination of any of the contracts referred to in paragraph 1, the resolution authority shall take the following steps:

(a) require the CCP under resolution to value each contract, and update the account balances of each clearing member;

(b) determine the net amount payable by or to each clearing member, taking account of any due but unpaid variation margin, including variation margin due as a result of the contract valuations referred to in point (a); and

The clearing members shall, without undue delay, communicate the application of such tool to their clients and the way in which such application affects them.

The valuation referred in point (a) of paragraph 3 shall be based, as far as possible, on a fair market price determined on the basis of the CCP’s own rules and arrangements, unless the resolution authority deems necessary the use of another appropriate price discovery method.

Where a non-defaulting clearing member is unable to pay the net amount determined in accordance with paragraph 3 of this Article, the resolution authority may, having regard to Article 21 of this Regulation, require the CCP to place the non-defaulting clearing member in default and use its initial margin and default fund contribution in accordance with Article 45 of Regulation (EU) No 648/2012.

Where the resolution authority has terminated one or more contracts of the types referred to in paragraph 1, it may temporarily prevent the CCP from clearing any new contract of the same type as the one terminated.

The resolution authority may allow the CCP to resume the clearing of those types of contracts only where the following conditions are met:

(a) the CCP complies with the requirements of Regulation (EU) No 648/2012; and

(b) the resolution authority issues and publishes a notice to that effect using the means referred to in Article 72(3).

ESMA shall by 12 February 2022 issue guidelines in accordance with Article 16 of Regulation (EU) No 1095/2010 further specifying the methodology to be used by the resolution authority for determining the valuation referred in point (a) of paragraph 3 of this Article.

Article 30

Reduction of the value of any gains payable by the CCP to non-defaulting clearing members

The resolution authority may reduce the amount of the CCP’s payment obligations to non-defaulting clearing members where those obligations arise from gains due in accordance with the CCP’s processes for paying variation margin or a payment that has the same economic effect.

The resolution authority shall calculate any reduction in payment obligations referred to in paragraph 1 of this Article using an equitable allocation mechanism determined in the valuation conducted in accordance with Article 24(3) and communicated to the clearing members as soon as the resolution tool is applied. The clearing members shall, without undue delay, communicate the application of such tool to their clients and the way in which such application affects them. The total net gains to be reduced for each clearing member shall be proportional to the amounts due from the CCP.

The reduction in the value of gains payable shall take effect and shall be immediately binding on the CCP and affected clearing members from the moment at which the resolution authority takes the resolution action.

A non-defaulting clearing member shall not have any claim in any subsequent proceedings against the CCP, or its successor entity, arising from the reduction in payment obligations referred to in paragraph 1.

The first subparagraph of this paragraph shall not prevent resolution authorities from requiring the CCP to reimburse clearing members, where the level of reduction based on the provisional valuation referred to in Article 26(1) is found to exceed the level of reduction required based on the definitive valuation referred to in Article 26(2).

Where a resolution authority reduces only in part the value of gains payable, the residual outstanding payable amount shall still be owed to the non-defaulting clearing member.

The CCP shall include in its operating rules reference to the power to reduce payment obligations referred to in paragraph 1 in addition to any similar arrangements provided for in those operating rules at the recovery stage and shall ensure that contractual arrangements are concluded to allow the resolution authority to exercise its powers under this Article.

Article 31

Resolution cash call

The resolution authority may require non-defaulting clearing members to make a contribution in cash to the CCP up to twice the amount equivalent to their contribution to the CCP’s default fund. This obligation to make a contribution in cash shall also be included in the CCP’s rules and other contractual arrangements as a resolution cash call reserved to the resolution authority taking resolution action. Where the resolution authority calls for an amount in excess of the contribution to the default fund, it shall do so after assessing the impact of this tool on non-defaulting clearing members and the financial stability of Member States, in cooperation with the resolution authorities of non-defaulting clearing members.

Where the CCP operates multiple default funds and the tool is applied to address a default event, the amount of the contribution in cash referred to in the first subparagraph shall refer to the contribution of the clearing member to the default fund of the affected clearing service or asset class.

Where the CCP operates multiple default funds and the tool is applied to address a non-default event, the amount of the contribution in cash referred to in the first subparagraph shall refer to the sum of the contributions of the clearing member to all default funds of the CCP.

The resolution authority may exercise the resolution cash call regardless of whether all contractual obligations requiring cash contributions from non-defaulting clearing members have been exhausted.

The resolution authority shall determine the amount of the cash contribution of each non-defaulting clearing member in proportion to its contribution to the default fund up to the limit referred in the first subparagraph.

The resolution authority may require the CCP to reimburse clearing members the possible excess amount of a resolution cash call where the level of the resolution cash call applied based on a provisional valuation according to Article 26(1) is found to exceed the required level based on the definitive valuation referred to in Article 26(2).

If a non-defaulting clearing member does not pay the required amount, the resolution authority may require the CCP to place that clearing member in default and use its initial margin and default fund contribution in accordance with Article 45 of Regulation (EU) No 648/2012 up to the required amount.

Section 3

Write-down and conversion of instruments of ownership and debt instruments or other unsecured liabilities

Article 32

Requirement to write down and convert instruments of ownership and debt instruments or other unsecured liabilities

The resolution authority shall apply the write-down and conversion tool in accordance with Article 33 in respect of instruments of ownership and debt instruments issued by the CCP under resolution or other unsecured liabilities in order to absorb losses, recapitalise that CCP or a bridge CCP, or to support the application of the sale of business tool.

Based on the valuation carried out in accordance with Article 24(3), the resolution authority shall determine the following:

(a) the amount by which the instruments of ownership and debt instruments or other unsecured liabilities must be written down taking into account any losses that are to be absorbed by the enforcement of any outstanding obligations of the clearing members or other third parties owed to the CCP; and

(b) the amount by which debt instruments or other unsecured liabilities must be converted into instruments of ownership in order to restore the capital requirements of the CCP or the bridge CCP.

Article 33

Provisions governing the write-down or conversion of instruments of ownership and debt instruments or other unsecured liabilities

The resolution authority shall apply the write-down and conversion tool in accordance with the priority of claims applicable under normal insolvency proceedings.

Prior to reducing or converting the principal amount of debt instruments or other unsecured liabilities, the resolution authority shall reduce the nominal amount of instruments of ownership in proportion to the losses and up to their full value, where necessary.

Where, in accordance with the valuation carried out pursuant to Article 24(3), the CCP maintains a positive net value after the reduction of the nominal amount of instruments of ownership, the resolution authority shall cancel or dilute, as the case may be, those instruments of ownership.

The resolution authority shall reduce, convert, or both, the principal amount of debt instruments or other unsecured liabilities to the extent required to achieve the resolution objectives, and up to the full value of those instruments or liabilities, where necessary.

The resolution authority shall not apply the write-down and conversion tool in respect of the following liabilities:

(a) liabilities to employees, in relation to accrued salary, pension benefits or other fixed remuneration, except for any variable component of remuneration that is not regulated by a collective bargaining agreement;

(b) liabilities to commercial or trade creditors arising from the provision to the CCP of goods or services that are critical to the daily functioning of its operations, including IT services, utilities and the rental, servicing and upkeep of premises;

(c) liabilities to tax and social security authorities, provided that those liabilities are preferred liabilities under the applicable insolvency law;

(d) liabilities owed to systems or operators of systems designated according to Directive 98/26/EC, to participants to the extent that the liabilities result from their participation in such systems, to other CCPs, and to central banks;

(e) initial margins.

Where the nominal amount of an instrument of ownership or the principal amount of a debt instrument or other unsecured liabilities is reduced, the following conditions shall apply:

(a) that reduction shall be permanent;

(b) the holder of the instrument shall have no claim in connection with that reduction, except for any liability already accrued, any liability for damages that may arise as a result of an appeal challenging the legality of that reduction, any claim based on instruments of ownership issued or transferred pursuant to paragraph 6 of this Article, or any claim for payment in accordance with Article 62; and

(c) where that reduction is only partial, the agreement that created the original liability shall continue to apply in respect of the residual amount subject to any necessary amendments of the terms of that agreement due to the reduction.

Point (a) of the first subparagraph shall not prevent resolution authorities from applying a write-up mechanism to reimburse holders of debt instruments or other unsecured liabilities and then holders of instruments of ownership, where the level of write-down applied based on the provisional valuation referred to in Article 26(1) is found to exceed the amounts required based on the definitive valuation referred to in Article 26(2).

Where converting debt instruments or other unsecured liabilities pursuant to paragraph 3, the resolution authority may require the CCP to issue or to transfer instruments of ownership to the holders of the debt instruments or other unsecured liabilities.

The resolution authority shall only convert debt instruments or other unsecured liabilities pursuant to paragraph 3 where the following conditions are met:

(a) the instruments of ownership are issued prior to any issuance of instruments of ownership by the CCP for the purposes of provision of own funds by the State or a government entity; and

(b) the conversion rate represents appropriate compensation to the affected debt holders for any loss incurred as a result of the exercise of the write-down and conversion powers, in line with their treatment under normal insolvency proceedings.

Following any conversion of debt instruments or other unsecured liabilities to instruments of ownership, the latter shall be subscribed or transferred without delay after the conversion.

For the purposes of paragraph 7, the resolution authority shall ensure, in the context of drawing up and maintaining the CCP’s resolution plan and as part of the powers to remove impediments to the resolvability of the CCP, that the CCP is at all times able to issue the necessary number of instruments of ownership.

Article 34

Effect of write-down and conversion

The resolution authority shall complete or require the completion of all the administrative and procedural tasks necessary to give effect to the application of the write-down and conversion tool, including:

(a) the amendment of all relevant registers;

(b) the delisting or removal from trading of instruments of ownership or debt instruments;

(d) the relisting or readmission of any debt instruments which have been written down, without the requirement for the issuing of a prospectus in accordance with Regulation (EU) 2017/1129 of the European Parliament and of the Council (24).

Article 35

Removal of procedural obstacles for write-down and conversion

Where Article 32(1) is applied, the competent authority shall require the CCP to maintain at all times a sufficient amount of instruments of ownership to ensure that the CCP may issue sufficient new instruments of ownership and that the issuance of or conversion into instruments of ownership could be carried out effectively.

The resolution authority shall apply the write-down and conversion tool regardless of any provisions in the CCP’s instruments of incorporation or statutes, including with respect to pre-emption rights for shareholders or requirements for the consent of shareholders to an increase of capital.

Article 36

Submission of a business reorganisation plan

CCPs shall, within one month after the application of the tools referred to in Article 32, conduct a review of the causes of its failure and submit it to the resolution authority alongside a business reorganisation plan in accordance with Article 37. Where the Union State aid framework is applicable, that plan, including following any amendments in accordance with Article 38 and as implemented in accordance with Article 39, shall be compatible with the restructuring plan that the CCP is required to submit to the Commission in accordance with that framework.

Where necessary for achieving the resolution objectives, the resolution authority may extend the period referred to in the first subparagraph up to a maximum of two months.

Where a restructuring plan is required to be notified under the Union State aid framework, the submission of the business reorganisation plan shall be without prejudice to the deadline laid down by that framework for the submission of that restructuring plan.

The resolution authority shall submit the review and the business reorganisation plan, and any revised plan in accordance with Article 38, to the competent authority and to the resolution college.

Article 37

Content of the business reorganisation plan

The business reorganisation plan referred to in Article 36 shall set out measures aiming to restore the long-term viability of the CCP or parts of its business within a reasonable timeframe. Those measures shall be based on realistic assumptions as to the economic and financial market conditions under which the CCP will operate.

The business reorganisation plan shall take account of the current and potential states of the financial markets and reflect best-case and worst-case assumptions, including a combination of events to identify the CCP’s main vulnerabilities. Assumptions shall be compared with appropriate sector-wide benchmarks.

The business reorganisation plan shall include at least the following elements:

(a) a detailed analysis of the factors and circumstances that caused the CCP to fail or to be likely to fail;

(b) a description of the measures to be adopted to restore the CCP’s long-term viability; and

Measures aiming to restore the long-term viability of a CCP may include:

(a) the reorganisation and restructuring of the activities of the CCP;

(b) changes to the CCP’s operational systems and infrastructure;

(d) changes to the CCP’s risk management.

ESMA shall by 12 February 2023 develop draft regulatory technical standards to specify further the minimum elements that should be included in a business reorganisation plan pursuant to paragraph 2.

Article 38

Assessment and adoption of the business reorganisation plan

Within one month of the submission of the business reorganisation plan by the CCP pursuant to Article 36(1), the resolution authority and the competent authority shall assess whether the measures provided for in that plan would reliably restore the long-term viability of the CCP.

Where the resolution authority and the competent authority are satisfied that the plan would restore the CCP’s long-term viability, the resolution authority shall approve the plan.

Where the resolution authority or the competent authority are not satisfied that the measures provided for in the plan would restore the CCP’s long-term viability, the resolution authority shall notify the CCP of their concerns and require it to resubmit an amended plan addressing those concerns within two weeks of the notification.

The resolution authority and the competent authority shall assess the resubmitted plan and the resolution authority shall notify the CCP within one week of the reception of that plan whether the concerns are appropriately addressed or whether further amendments are required.

ESMA shall by 12 February 2023 develop draft regulatory technical standards to specify the criteria that a business reorganisation plan is to fulfil for approval by the resolution authority pursuant to paragraph 1.

Article 39

Implementation and monitoring of the business reorganisation plan

The CCP shall implement the business reorganisation plan and shall submit a report to the resolution authority and the competent authority as requested and, at least, every six months on its progress in implementing that plan.

The resolution authority, in agreement with the competent authority, may require the CCP to revise the plan where necessary to achieve the aim referred to in Article 37(1).

Section 4

Sale of business tool

Article 40

Sale of business tool

The resolution authority may transfer the following to a purchaser that is not a bridge CCP:

(a) instruments of ownership issued by a CCP under resolution;

(b) any assets, rights, obligations or liabilities of a CCP under resolution.

The transfer referred to in the first subparagraph shall take place without obtaining the consent of the shareholders of the CCP, or any third party other than the purchaser and without complying with any procedural requirements under company or securities law other than those provided for in Article 41.

A transfer made pursuant to paragraph 1 shall be made on commercial terms, having regard to the circumstances, and in accordance with the Union State aid framework.

For the purposes of the first subparagraph of this paragraph, the resolution authority shall take all reasonable steps to obtain commercial terms that conform to the valuation conducted under Article 24(3).

Subject to Article 27(10), any consideration paid by the purchaser shall benefit:

(a) the owners of the instruments of ownership where the sale of business has been effected by transferring instruments of ownership issued by the CCP under resolution from the holders of those instruments to the purchaser;

(b) the CCP under resolution, where the sale of business has been effected by transferring some or all of the assets or liabilities of the CCP to the purchaser;

(c) any non-defaulting clearing members that have suffered losses resulting from the application of the resolution tools in resolution, proportionate to their losses in resolution.

The allocation of any consideration paid by the purchaser in accordance with paragraph 3 of this Article shall be carried out as follows:

(a) upon the occurrence of an event covered by the CCP’s default waterfall as set out in Articles 43 and 45 of Regulation (EU) No 648/2012, in a reversal of the order in which the losses have been imposed by the CCP’s default waterfall; or

(b) upon the occurrence of an event not covered by the CCP’s default waterfall as set out in Articles 43 and 45 of Regulation (EU) No 648/2012, in a reversal of the order in which the losses were allocated in accordance with any applicable rules of the CCP.

The allocation of any remaining consideration shall then be carried out in accordance with the priority of claims under normal insolvency proceedings.

The resolution authority may exercise the transfer power referred to in paragraph 1 more than once in order to make supplemental transfers of instruments of ownership issued by the CCP or, as the case may be, the CCP’s assets, rights, obligations, or liabilities.

The resolution authority may, with the consent of the purchaser, transfer the assets, rights, obligations or liabilities that had been transferred to the purchaser back to the CCP under resolution, or the instruments of ownership back to their original owners.

Where the resolution authority uses the transfer power referred to in the first subparagraph, the CCP under resolution or original owners shall be obliged to take back any such assets, rights, obligations or liabilities, or instruments of ownership.

Any transfer made pursuant to paragraph 1 shall take place irrespective of whether the purchaser is authorised to provide the services and carry out the activities resulting from the acquisition.

Where the purchaser is not authorised to provide the services and carry out the activities resulting from the acquisition, the resolution authority, in consultation with the competent authority, shall conduct an appropriate due diligence assessment of the purchaser and ensure that the purchaser has the professional and technical capacity to perform the functions of the purchased CCP and that it applies for authorisation as soon as practicable and, at the latest, within one month of the application of the sale of business tool. The competent authority shall ensure that any such application for authorisation is considered in an expedited manner.

Where the transfer of instruments of ownership referred to in paragraph 1 of this Article results in the acquisition of or increase in a qualifying holding referred to in Article 31(2) of Regulation (EU) No 648/2012, the competent authority shall carry out the assessment referred to in that Article within a period that neither delays the application of the sale of business tool nor prevents the resolution action from achieving the relevant resolution objectives.

Where the competent authority has not completed the assessment referred to in paragraph 8 by the date on which the transfer of instruments of ownership takes effect, the following shall apply:

(a) the transfer of instruments of ownership shall have immediate legal effect from the date on which they are transferred;

(b) during the assessment period and during any divestment period provided for in point (f) of this paragraph, the purchaser’s voting rights attached to those instruments of ownership shall be suspended and vested solely in the resolution authority, which shall have no obligation to exercise them and, unless the act or omission implies gross negligence or serious misconduct, shall not be liable for exercising or refraining from exercising them;

(c) during the assessment period and during any divestment period provided for in point (f) of this paragraph, any penalties provided for in Article 22(3) of Regulation (EU) No 648/2012 or measures for infringing the requirements for acquisitions or disposals of qualifying holdings provided for in Article 30 of Regulation (EU) No 648/2012 shall not apply to that transfer;

(d) the competent authority shall notify the resolution authority and the purchaser in writing of the result of its assessment in accordance with Article 32 of Regulation (EU) No 648/2012 promptly after completing its assessment;

(e) where the competent authority does not oppose the transfer, the voting rights attached to those instruments of ownership shall be deemed to be fully vested in the purchaser as from the notification referred to in point (d) of this paragraph;

(f) where the competent authority opposes the transfer of instruments of ownership, point (b) shall continue to apply and the resolution authority may, having taken into account market conditions, establish a divestment period within which the purchaser shall divest such instruments of ownership.

10.

For the purposes of exercising its right to provide services in accordance with Regulation (EU) No 648/2012, the purchaser shall be considered to be a continuation of the CCP under resolution, and may continue to exercise any such right that was exercised by the CCP under resolution in respect of the assets, rights, obligations or liabilities transferred.

11.

The purchaser referred to in paragraph 1 shall not be prevented from exercising the CCP’s rights of membership and accessing the payment and settlement systems and other linked FMIs and trading venues provided that the purchaser meets the criteria for membership or participation in those systems or infrastructures or trading venues.

Notwithstanding the first subparagraph, the purchaser shall not be denied access to payment and settlement systems, and other linked FMIs and trading venues, on the ground that the purchaser does not possess a rating from a credit rating agency, or that that rating is below the rating levels required to be granted access to those systems or infrastructures or trading venues.

Where the purchaser does not meet the criteria referred to in the first subparagraph, the purchaser may continue to exercise the CCP’s rights of membership and accessing those systems and other infrastructures and trading venues for the period specified by the resolution authority. That period shall not exceed 12 months.

12.

Unless otherwise provided for in this Regulation, shareholders, creditors, clearing members and clients of the CCP under resolution and other third parties whose assets, rights, obligations or liabilities are not transferred shall have no rights over, or in relation to, the assets, rights, obligations or liabilities transferred.

Article 41

Sale of business tool: procedural requirements

Where applying the sale of business tool in relation to a CCP, the resolution authority shall advertise the availability, or make arrangements for the marketing, of the assets, rights, obligations, liabilities, or the instruments of ownership intended to be transferred. Pools of rights, assets, obligations and liabilities may be marketed separately.

Without prejudice to the Union State aid framework, where applicable, the marketing referred to in paragraph 1 shall be carried out in accordance with the following criteria:

(a) it shall be as transparent as possible and not materially misrepresent the assets, rights, obligations, liabilities, or instruments of ownership of the CCP, having regard to the circumstances and in particular the need to maintain financial stability;

(b) it shall not unduly favour or discriminate between potential purchasers;

(d) it shall take account of the need to effect a rapid resolution action; and

(e) it shall aim to maximise, as far as possible, the sale price for the instruments of ownership, assets, rights, obligations or liabilities involved.

The criteria referred to in the first subparagraph shall not prevent the resolution authority from soliciting particular potential purchasers.

By way of derogation from paragraphs 1 and 2, the resolution authority may apply the sale of business tool without complying with the requirement to market, or may market the assets, rights, obligations, liabilities or the instruments of ownership where it determines that compliance with that requirement or with those criteria would be likely to undermine one or more of the resolution objectives, including by creating a material threat to financial stability.

Section 5

Bridge CCP tool

Article 42

Bridge CCP tool

The resolution authority may transfer to a bridge CCP the following:

(a) instruments of ownership issued by a CCP under resolution;

(b) any assets, rights, obligations or liabilities of the CCP under resolution.

The transfer referred to in the first subparagraph may take place without obtaining the consent of the shareholders of the CCP under resolution or any third party other than the bridge CCP and without complying with any procedural requirements under company or securities law other than those provided for in Article 43.

The bridge CCP shall be a legal person that:

(a) is controlled by the resolution authority and is wholly or partially owned by one or more public authorities which may include the resolution authority; and

(b) is established or used for the purpose of receiving and holding some or all of the instruments of ownership issued by a CCP under resolution or some or all of the assets, rights, obligations and liabilities of the CCP with a view to maintaining the critical functions of the CCP and subsequently selling the CCP.

When applying the bridge CCP tool, the resolution authority shall ensure that the total value of liabilities and obligations transferred to the bridge CCP does not exceed the total value of the rights and assets transferred from the CCP under resolution.

Subject to Article 27(10), any consideration paid by the bridge CCP shall benefit:

(a) the owners of the instruments of ownership, where the transfer to the bridge CCP has been effected by transferring instruments of ownership issued by the CCP under resolution from the holders of those instruments to the bridge CCP;

(b) the CCP under resolution, where the transfer to the bridge CCP has been effected by transferring some or all of the assets or liabilities of that CCP to the bridge CCP;

(c) any non-defaulting clearing members that have suffered losses following the application of the resolution tools in resolution, proportionate to their losses in resolution.

The allocation of any consideration paid by the bridge CCP in accordance with paragraph 4 of this Article shall be carried out as follows:

The allocation of any remaining consideration shall be carried out in accordance with the priority of claims under normal insolvency proceedings.

The resolution authority may exercise the transfer power referred to in paragraph 1 more than once in order to make supplemental transfers of instruments of ownership issued by a CCP or of its assets, rights, obligations or liabilities.

The resolution authority may transfer the rights, obligations, assets or liabilities that had been transferred to the bridge CCP back to the CCP under resolution, or the instruments of ownership back to their original owners where that transfer is expressly provided for in the instrument by which the transfer referred to in paragraph 1 is made.

Where the specific instruments of ownership, assets, rights, obligations or liabilities do not fall within the classes of, or meet the conditions for transfer of, instruments of ownership, assets, rights, obligations or liabilities specified in the instrument by which the transfer was made, the resolution authority may transfer them from the bridge CCP back to the CCP under resolution or the original owners.

A transfer referred to in paragraphs 7 and 8 may be made at any time, and shall comply with any other conditions stated in the instrument by which the transfer was made for the relevant purpose.

10.

The resolution authority may transfer instruments of ownership or assets, rights, obligations or liabilities from the bridge CCP to a third party.

11.

For the purposes of exercising its right to provide services in accordance with Regulation (EU) No 648/2012, a bridge CCP shall be considered to be a continuation of the CCP under resolution and may continue to exercise any such right that was exercised by the CCP under resolution in respect of the assets, rights, obligations or liabilities transferred.

For any other purposes, resolution authorities may require that a bridge CCP be considered to be a continuation of the CCP under resolution, and be able to continue to exercise any right that was exercised by the CCP under resolution in respect of the assets, rights, obligations or liabilities transferred.

12.

The bridge CCP shall not be prevented from exercising the CCP’s rights of membership and accessing payment and settlement systems and other linked FMIs and trading venues, provided that it meets the criteria for membership and participation in those systems or FMIs or trading venues.

Notwithstanding the first subparagraph, the bridge CCP shall not be denied access to payment and settlement systems and other FMIs and trading venues on the ground that the bridge CCP does not possess a rating from a credit rating agency, or that that rating is below the rating levels required to be granted access to those systems or infrastructures or trading venues.

Where the bridge CCP does not meet the criteria referred to in the first subparagraph, the bridge CCP may continue to exercise the CCP’s rights of membership and accessing those systems and other infrastructures and trading venues for a period specified by the resolution authority. That period shall not exceed 12 months.

13.

Shareholders, creditors, clearing members and clients of the CCP under resolution and other third parties whose assets, rights, obligations or liabilities are not transferred to the bridge CCP, shall have no rights over, or in relation to, the assets, rights, obligations or liabilities transferred to the bridge CCP, or against its board or senior management.

14.

The bridge CCP shall have no duty or responsibility to shareholders or creditors of the CCP under resolution, and the board or senior management of the bridge CCP shall have no liability to those shareholders or creditors for acts and omissions in the discharge of their duties, unless the act or omission is due to gross negligence or serious misconduct in accordance with applicable national law.

Article 43

Bridge CCP: procedural requirements

The bridge CCP shall comply with all of the following requirements:

Subject to any restrictions imposed in accordance with Union or national competition rules, the management of the bridge CCP shall operate the bridge CCP with the objective of maintaining continuity of the bridge CCP’s critical functions and selling the bridge CCP or any of its assets, rights, obligations and liabilities to one or more private sector purchasers. That sale shall take place when market conditions are appropriate, and within the period specified in paragraphs 5 and, where applicable, 6.

The resolution authority shall take a decision that the bridge CCP is no longer a bridge CCP within the meaning of Article 42(2) in any of the following cases:

(a) the resolution objectives are fulfilled;

(b) the bridge CCP merges with another entity;

(d) the bridge CCP or substantially all of its assets, rights, obligations or liabilities have been sold in accordance with paragraphs 2 and 4 of this Article;

(e) the period specified in paragraph 5 of this Article or, where applicable, paragraph 6 of this Article expires;

(f) the contracts cleared by the bridge CCP have been settled, have expired or have been closed out and the CCP’s rights and obligations relating to those contracts are thereby completely discharged.

Before selling the bridge CCP or its assets, rights, obligations or liabilities, the resolution authority shall advertise the availability of the elements intended to be sold, and shall ensure that they are marketed openly and transparently, and that they are not materially misrepresented.

The resolution authority shall carry out the sale referred to in the first subparagraph on commercial terms and shall not unduly favour or discriminate between potential purchasers.

The resolution authority shall terminate the operation of a bridge CCP two years after the date on which the last transfer from the CCP under resolution is made.

Where the resolution authority terminates the operation of a bridge CCP, it shall request the competent authority to withdraw the bridge CCP’s authorisation.

The resolution authority may extend the period referred to in paragraph 5 for one or more additional one-year periods where the extension is necessary to achieve the outcomes referred to in points (a) to (d) of paragraph 3.

The decision to extend the period referred to in paragraph 5 shall be reasoned and shall contain a detailed assessment of the bridge CCP’s situation in relation to relevant market conditions and market outlook.

Where the operations of a bridge CCP are terminated in the circumstances referred to in point (d) or (e) of paragraph 3, the bridge CCP shall be wound up under normal insolvency proceedings.

Unless otherwise provided for in this Regulation, any proceeds generated as a result of the termination of the bridge CCP shall benefit its shareholders.

Where a bridge CCP is used for the purpose of transferring assets and liabilities of more than one CCP under resolution, the proceeds referred to in the second subparagraph shall be attributed by reference to the assets and liabilities transferred from each of the CCPs under resolution.

Section 6

Additional financing arrangements

Article 44

Alternative funding means

The resolution authority may enter into contracts to borrow or obtain other forms of financial support, including from pre-funded resources available in any non-depleted default funds in the CCP under resolution, where necessary to meet temporary liquidity needs in order to ensure the effective application of the resolution tools.

Section 7

Government stabilisation tools

Article 45

Government financial stabilisation tools

In the very extraordinary situation of a systemic crisis, Member States may apply the government stabilisation tools in accordance with Articles 46 and 47 for the purpose of resolving a CCP only where the following conditions are met:

(a) the financial support is necessary to meet the resolution objectives referred to in Article 21;

(b) the financial support is used only as a last resort in accordance with paragraph 3 of this Article after having assessed and exploited all resolution tools to the maximum extent practicable whilst maintaining financial stability;

(d) the financial support complies with the Union State aid framework; and

(e) the Member State has, in advance, defined comprehensive and credible arrangements, in a manner consistent with the Union state aid framework, for recovering, over a suitable period, and in accordance with Article 27(10) the public funds deployed, to the extent not retrieved in full through the sale to private purchasers in accordance with Article 46(3) or 47(2).

The application of government stabilisation tools shall be carried out in accordance with national law either under the leadership of the competent ministry or government in close cooperation with the resolution authority or under the leadership of the resolution authority.

To give effect to the government financial stabilisation tools, competent ministries or governments shall have the relevant resolution powers specified in Articles 48 to 58, and shall ensure that Articles 52, 54 and 72 are complied with.

Government financial stabilisation tools shall be deemed to be applied as a last resort for the purposes of point (b) of paragraph 1 where at least one of the following conditions is met:

(a) the competent ministry or government and the resolution authority, after consulting the central bank and the competent authority, determine that the application of remaining resolution tools would not suffice to avoid a significant adverse effect on the financial system;

(b) the competent ministry or government and the resolution authority determine that the application of remaining resolution tools would not suffice to protect the public interest, where extraordinary liquidity assistance from the central bank has previously been given to the CCP;

(c) in respect of the temporary public ownership tool, the competent ministry or government, after consulting the competent authority and the resolution authority, determines that the application of remaining resolution tools would not suffice to protect the public interest, where public equity support through the equity support tool has previously been given to the CCP.

Article 46

Public equity support tool

Public financial support may be provided for the recapitalisation of a CCP in exchange for instruments of ownership.

CCPs subject to the public equity support tool shall be managed on a commercial and professional basis.

The instruments of ownership referred to in paragraph 1 shall be sold to a private purchaser as soon as commercial and financial circumstances allow.

Article 47

Temporary public ownership tool

A CCP may be taken into temporary public ownership by means of one or more transfer orders of instruments of ownership executed by a Member State to a transferee which is either of the following:

(a) a nominee of the Member State; or

(b) a company wholly owned by the Member State.

CCPs subject to the temporary public ownership tool shall be managed on a commercial and professional basis and, having regard to the possibility of recovering the cost of resolution, shall be sold to a private purchaser as soon as commercial and financial circumstances allow. In determining the timing of the sale of the CCP, the financial situation and relevant market conditions shall be taken into account.

CHAPTER IV

Resolution powers

Article 48

General powers

The resolution authority shall have all the powers necessary to apply the resolution tools effectively, including all the following powers:

(a) to require any person to provide the resolution authority with any information it requires to decide upon and prepare a resolution action, including updates and additional information to that provided in the resolution plan or required through on-site inspections;

(b) to take control of a CCP under resolution and exercise all the rights and powers conferred upon holders of instruments of ownership and the CCP’s board including the rights and powers under the operating rules of the CCP;

(d) to transfer to another entity, with its consent, the CCP’s rights, assets, obligations or liabilities;

(e) to reduce, including to reduce to zero, the principal amount of or outstanding amount due in respect of debt instruments or other unsecured liabilities of a CCP under resolution;

(f) to convert debt instruments or other unsecured liabilities of a CCP under resolution into instruments of ownership of that CCP or of a bridge CCP to which assets, rights, obligations or liabilities of the CCP under resolution have been transferred;

(g) to cancel debt instruments issued by a CCP under resolution;

(h) to reduce, including to reduce to zero, the nominal amount of instruments of ownership of a CCP under resolution and to cancel such instruments of ownership;

(i) to require a CCP under resolution to issue new instruments of ownership, including preference shares and contingent convertible instruments;

(j) with regards to debt instruments and other liabilities of the CCP, to amend or alter their maturity, amend the amount of interest payable, or amend the date on which interest becomes payable, including by suspending payment for a temporary period;

(k) to close out and terminate financial contracts;

(l) to remove or replace the board and senior management of a CCP under resolution;

(m) to require the competent authority to assess the buyer of a qualifying holding in a timely manner by way of derogation from the time-limits laid down in Article 31 of Regulation (EU) No 648/2012;

(n) to reduce, including to reduce to zero, the amount of variation margin due to a clearing member of a CCP under resolution;

(o) to transfer open positions and any related assets, including relevant title transfer and security financial collateral arrangements, set-off arrangements, and netting arrangements, from the account of a defaulting clearing member to a non-defaulting clearing member in a manner consistent with Article 48 of Regulation (EU) No 648/2012;

(p) to enforce any existing and outstanding contractual obligations of the clearing members of the CCP under resolution or, where necessary to achieve the resolution objectives, refrain from enforcing such contractual obligations or otherwise deviate from the CCP’s operating rules;

(q) to enforce any existing and outstanding obligations of the parent undertaking of the CCP under resolution including to provide the CCP with financial support by way of guarantees or credit lines; and

(r) to require clearing members to provide further contributions in cash subject to the limit referred to in Article 31.

Resolution authorities may exercise the powers referred to in the first subparagraph individually or in any combination.

Unless otherwise provided for in this Regulation and the Union State aid framework, the resolution authority shall not be subject to any of the following requirements where it exercises the powers referred to in paragraph 1:

(a) requirement to obtain approval or consent from any public or private person;

(b) requirements relating to the transfer of financial instruments, rights, obligations, assets or liabilities of a CCP under resolution or a bridge CCP;

(d) requirement to publish any notice or prospectus;

(e) requirement to file or register any document with any other authority.

Article 49

Ancillary powers

Where a power referred to in Article 48(1) of this Regulation is exercised, the resolution authority may also exercise any of the following ancillary powers:

(a) subject to Article 67, to provide for a transfer to take effect free from any liability or encumbrance affecting the financial instruments, rights, obligations, assets or liabilities transferred;

(b) to remove rights to acquire further instruments of ownership;

(c) to require the relevant authority to discontinue or suspend the admission to trading on a regulated market, or the official listing, of any financial instruments issued by the CCP pursuant to Directive 2001/34/EC of the European Parliament and of the Council (25);

(d) to provide for the purchaser or bridge CCP, pursuant to Articles 40 and 42 respectively, to be treated as if it were the CCP under resolution, for the purposes of any rights or obligations of, or actions taken by, the CCP under resolution, including any rights or obligations relating to participation in a market infrastructure;

(e) to require the CCP under resolution or the purchaser or bridge CCP, where relevant, to provide the other with information and assistance;

(f) to provide for the clearing member which is a recipient of any positions allocated to it by way of the powers in points (o) and (p) of Article 48(1) to assume any rights or obligations relating to participation in the CCP in relation to those positions;

(g) to cancel or modify the terms of a contract to which the CCP under resolution is a party or substitute the purchaser or bridge CCP, in place of the CCP under resolution, as a party;

(h) to modify or amend the operating rules of the CCP under resolution, including as regards its terms of access to clearing for its clearing members and other participants;

(i) to transfer the membership of a clearing member from the CCP under resolution to a purchaser of the CCP or a bridge CCP.

Any right of compensation provided for in this Regulation shall not be considered to be a liability or an encumbrance for the purposes of point (a) of the first subparagraph.

The resolution authority may provide for continuity arrangements necessary to ensure that the resolution action is effective and that the business transferred may be operated by the purchaser or bridge CCP. Those continuity arrangements may include:

(a) the continuity of contracts entered into by the CCP under resolution, in order for the purchaser or bridge CCP to assume the rights and liabilities of the CCP under resolution relating to any financial instrument, right, obligation, asset or liability that has been transferred and to replace the CCP under resolution, expressly or implicitly, in all relevant contractual documents;

(b) the replacement of the CCP under resolution by the purchaser or bridge CCP in any legal proceedings relating to any financial instrument, right, obligation, asset or liability that has been transferred.

The powers provided for in point (d) of paragraph 1, and point (b) of paragraph 2, of this Article shall not affect:

(a) the right of an employee of the CCP to terminate a contract of employment; nor

(b) subject to Articles 55, 56 and 57, the exercise of contractual rights of a party to a contract, including the right to terminate, where provided for in the terms of the contract, due to an act or omission by the CCP prior to the transfer, or by the purchaser or bridge CCP after the transfer.

Article 50

Special management

The resolution authority may appoint one or more special managers to replace the board of a CCP under resolution. The special manager shall be of sufficiently good repute and shall have adequate expertise in financial services, risk management and clearing services in accordance with the second subparagraph of Article 27(2) of Regulation (EU) No 648/2012.

The special manager shall have all the powers of the shareholders and the board of the CCP. The special manager shall only exercise those powers under the control of the resolution authority. The resolution authority may limit the actions of the special manager or require prior consent for certain acts.

The resolution authority shall make public the appointment referred to in paragraph 1 and the terms and conditions attached to that appointment.

The special manager shall be appointed for no more than one year. The resolution authority may renew that period where necessary to achieve the resolution objectives.

The special manager shall take all the measures necessary to promote the resolution objectives and implement resolution actions taken by the resolution authority. In the event of inconsistency or conflict, that statutory duty shall override any other duty of management in accordance with the statutes of the CCP or national law.

The special manager shall draw up reports for the appointing resolution authority at regular intervals set by the resolution authority and at the beginning and the end of the mandate. Those reports shall describe in detail the financial situation of the CCP and state the reasons for the measures taken.

The resolution authority may remove the special manager at any time. It shall in any case remove the special manager in the following cases:

(a) where the special manager is failing to perform its duties in accordance with the terms and conditions set out by the resolution authority;

(b) where the objectives of resolution would be better achieved by removing or replacing that special manager; or

Article 51

Power to require the provision of services and facilities

The resolution authority may require a CCP under resolution, any entity belonging to the same group as the CCP or any of the CCP’s clearing members to provide any services or facilities that are necessary to enable a purchaser or bridge CCP to operate effectively the business transferred to it.

The first subparagraph shall apply regardless of whether an entity in the same group as the CCP or one of the CCP’s clearing members has entered into normal insolvency proceedings or is itself under resolution.

The resolution authority may enforce obligations imposed, pursuant to paragraph 1, by resolution authorities in other Member States where those powers are exercised in relation to entities belonging to the same group as the CCP under resolution, or in relation to the clearing members of that CCP.

The services and facilities referred to in paragraph 1 shall not include any form of financial support.

The services and facilities provided pursuant to paragraph 1 shall be provided:

(a) on the same commercial terms on which they were provided to the CCP immediately before the resolution action was taken, where an agreement for the purposes of providing those services and facilities exists; or

(b) on reasonable commercial terms, where there is no agreement for the purposes of providing those services and facilities or where that agreement has expired.

Article 52

Power to enforce crisis prevention measures or resolution actions by other Member States

Where instruments of ownership, assets, rights, obligations or liabilities of a CCP under resolution are located in, or governed by the law of a Member State other than the Member State of the resolution authority, any transfer or resolution action in respect of those instruments, assets, rights, obligations or liabilities shall have effect in accordance with the law of that other Member State.

The resolution authority of a Member State shall be provided with all necessary assistance by the authorities of other relevant Member States to ensure that any instruments of ownership, assets, rights, obligations or liabilities are transferred to the purchaser or bridge CCP or any other resolution action becomes effective in accordance with the applicable national law.

Shareholders, creditors and third parties that are affected by the transfer of instruments of ownership, assets, rights, obligations or liabilities referred to in paragraph 1 shall not be entitled to prevent, challenge, or set aside that transfer under the law of the Member State where the assets are located or that governs the transfer of the instruments of ownership, assets, rights, obligations or liabilities.

Where the resolution authority of a Member State applies the resolution tools referred to in Articles 28 to 32, and the contracts, liabilities, instruments of ownership or debt instruments of the CCP under resolution include instruments, contracts or liabilities that are governed by the law of another Member State, or liabilities owed to creditors and contracts in respect of clearing members and, where applicable, their clients located in that other Member State, the relevant authorities in that other Member State shall ensure that any action resulting from those resolution tools takes effect.

For the purposes of the first subparagraph, shareholders, creditors and clearing members and, where applicable, their clients affected by those resolution tools shall be entitled to challenge the reduction of the principal or payable amount of the instrument or liability or its conversion or restructuring, as the case may be, only under the law of the Member State of the resolution authority.

The following rights and safeguards shall be determined in accordance with the law of the Member State of the resolution authority:

(a) the right for shareholders, creditors and third parties to appeal pursuant to Article 74 against the transfer of instruments of ownership, assets, rights, obligations or liabilities referred to in paragraph 1 of this Article;

(b) the right for affected creditors to appeal pursuant to Article 74 against the reduction of the principal or payable amount or the conversion or restructuring of an instrument, liability or contract covered by paragraph 4 of this Article; and

(c) the safeguards for partial transfers, as referred to in Chapter V, in relation to assets, rights, obligations or liabilities referred to in paragraph 1.

Article 53

Power in respect of assets, contracts, rights, liabilities, obligations and instruments of ownership of persons located in or governed by the law of third countries

Where a resolution action concerns assets or contracts of persons located in a third country or instruments of ownership, rights, obligations or liabilities governed by the law of a third country, the resolution authority may require that:

(a) the CCP under resolution and the recipient of those assets, contracts, instruments of ownership, rights, obligations or liabilities take all necessary steps to ensure that the action becomes effective;

(b) the CCP under resolution holds the instruments of ownership, assets or rights or discharges the liabilities or obligations on behalf of the recipient until the action becomes effective;

(c) the reasonable expenses of the recipient properly incurred in carrying out any action required under points (a) and (b) of this paragraph are reimbursed in any of the ways referred to in Article 27(10).

For the purposes of paragraph 1 of this Article, the resolution authority shall require the CCP to ensure the inclusion of a provision in its contracts and other agreements with clearing members and holders of instruments of ownership and debt instruments located in or governed by the law of third countries by which they agree to be bound by any action in respect of their assets, contracts, rights, obligations and liabilities taken by the resolution authority, including the application of Articles 28, 32, 55, 56 and 57.

The resolution authority may require the CCP to ensure the inclusion of such a provision in its contracts and other agreements with holders of other liabilities located in or governed by the law of third countries. The resolution authority may require the CCP to provide it with a reasoned legal opinion by an independent legal expert confirming the legal enforceability and effectiveness of such provisions.

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