rec_57

(57) The position and loss allocation tools should be exercised with a view to re-matching the CCP’s book, stemming any further losses and obtaining additional resources to help recapitalise the CCP and replenish its pre-funded resources. In order to ensure that they are effective and achieve their objective, they should be able to apply to as wide a range of contracts giving rise to unsecured liabilities or creating an unmatched book for the failing CCP as possible. They should provide for the possibility to auction defaulters’ positions among remaining clearing members or to forcibly allocate them to the extent that voluntary arrangements established as part of recovery plan are not exhausted upon entry into resolution, to partially or fully terminate the contracts of defaulted clearing members, of an affected clearing service or asset class and other contracts of the CCP, to further haircut outgoing variation margin payments to such members and, where applicable, their clients, to exercise any outstanding recovery cash calls set out in recovery plans, and to exercise additional resolution cash calls and write-down of capital and debt instruments issued by the CCP or other unsecured liabilities and a conversion of any debt instruments into shares. This includes the possibility to apply the loss allocation tools to contribute to the restoration of a matched book by providing the CCP with funds to accept an auction bid, enabling the CCP to allocate the defaulter’s positions or to make payments on the terminated contracts.

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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.