Section 2

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: to cover the losses of the CCP assessed in accordance with Article 25; to restore the ability of the CCP to meet payment obligations as they fall due; to achieve the outcome referred to in points (a) and (b) in relation to a bridge CCP; 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. The resolution authority may terminate some or all of the following contracts of the CCP under resolution: the contracts with the clearing member in default; the contracts of the affected clearing service or asset class; the other contracts of the CCP under resolution. 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: require the CCP under resolution to value each contract, and update the account balances of each clearing member; 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 notify each clearing member of the determined net amounts and require the CCP to pay or collect them accordingly. 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: the CCP complies with the requirements of Regulation (EU) No 648/2012; and 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. 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. 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.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-12 · Text as adopted (Official Journal); later amendments are not incorporated in this text.