The business reorganisation plan shall fulfil all of the following viability performance criteria:
(a)
the CCP shall be able, in accordance with its internal rules and regulations, to undertake the measures set out in the business reorganisation plan;
(b)
the CCP, by implementing the business reorganisation plan, shall be able, within a reasonable timeframe, to restore the long-term viability and to continue to provide clearing services in accordance with Regulation (EU) No 648/2012 in the following manner:
(i)
the CCP does not pose a significant risk to the financial system, considering in particular an assessment of the concentration of the pool of clearing participants;
(ii)
the CCP provides a clearing service which is stable and viable, considering in particular:
(1)
the estimated flow of transactions that will be submitted for clearing to the CCP;
(2)
the estimated number of clearing members at the CCP;
(3)
the CCP’s ability to ensure liquidity in the instruments cleared;
(4)
the material contractual agreements that will be maintained, and the extent to which such contracts contain contractual resilience clauses, resolution-proof clauses and limitations of termination rights in a business reorganisation;
(5)
the internal agreements that will be maintained during the application of the business reorganisation plan, including descriptions of any arms’ length pricing structures and planned continued access to operational assets;
(6)
the envisaged continuation of services to the CCP following the application of the business reorganisation plan, evidenced by letters of commitment of the service providers and where no such letters have been received, the CCP’s assessment that the termination of such service will not be detrimental to the CCP’s operational or financial viability;
(c)
the business reorganisation plan shall include a description of the method for determining the value and marketability of the critical functions and assets of the CCP, focusing on aspects that could have an impact on the valuation, including volatility in the market, inaccessibility or uncertainty of the market prices, time constraints and legal aspects;
(d)
the valuations under the business reorganisation plan shall cover both the assets and business lines of the CCP that are to be wound up or sold, and the assets and business lines that are to remain within the CCP;
(e)
any proceeds from the divestment of assets or business lines envisaged by the business reorganisation plan shall be calculated prudently and with reference either to a reliable benchmark or to a valuation, including an expert valuation, a market sounding exercise or the value of similar assets or business lines;
(f)
the CCP, by implementing the business reorganisation plan, shall be able to fulfil all the applicable prudential and other regulatory requirements on a forward-looking basis, in particular:
(i)
the CCP will no longer be breaching any requirement or will prevent a likely infringement of those requirements from materialising;
(ii)
the CCP ensures the continuous functioning of its operational processes as referred to in Article 12(7), point (m), of Regulation (EU) 2021/23;
(g)
where the resolution is to be accompanied by the replacement of the management and where such restructuring is to be achieved through the implementation of a business reorganisation plan, the business reorganisation plan shall address a restructuring that includes the replacement of management;
(h)
to the best knowledge of the CCP, the implementation of the measures set out in the business reorganisation shall have no material negative effect on market and financial stability;
(i)
the CCP has not identified issues relating to Union or national competition law that could arise from the implementation of the business reorganisation plan.
The business reorganisation plan shall fulfil all of the following financial performance criteria:
(a)
the CCP shall have identified the funding requirements under the business reorganisation plan and secured the sources of such funding, ensuring, in particular, that the parties agreeing to provide committed financial resources, including the parent undertaking, clearing members, shareholders or liquidity providers of the CCP, will be able to transfer the committed amounts to the CCP within the timeframe required in accordance with the terms and conditions agreed by such parties;
(b)
the CCP shall have identified and included in the business reorganisation plan ways to maintain its financial resilience;
(c)
the CCP shall be able to operate and cover all of its financial positions, as demonstrated by a post-reorganisation balance sheet providing details on the new debt and capital structure and on the effects of the write-down and conversion tools based on the valuation carried out pursuant to Article 24(3) and Article 61(1) of Regulation (EU) 2021/23 to the extent that such a valuation has been finalised at the time of the establishment of the business reorganisation plan;
(d)
the CCP shall have identified and mitigated any financial impediments, including where the CCP is party to an ongoing litigation or a dispute which could negatively affect its financial position.
The business reorganisation plan shall fulfil all of the following awareness and commitment criteria:
(a)
the senior management and the members of the board of the CCP shall acknowledge in writing that they are aware of and committed to the following:
(i)
the implementation of the business reorganisation plan;
(ii)
the appointment of one or more persons responsible for carrying out the business reorganisation plan and the identification of the individuals assigned to senior management roles of such departments;
(b)
the awareness, commitment, cooperation and support of the following key internal and external stakeholders to the business reorganisation plan shall be evidenced in writing:
(i)
the risk committee;
(ii)
the clearing members and their direct and indirect clients where possible to identify;
(iii)
the interoperable CCPs and critical service providers.
1. The business reorganisation plan shall apply assumptions that are credible, that range from best-case to worst-case, and that ensure that the reorganisation strategy set out in the business reorganisation plan is realistic, appropriate, and takes into account the opportunities and threats to the CCP in the relevant market.
2. The assumptions in the business reorganisation plan shall be based on the relevant markets where the CCP provides clearing services and the clearing offerings by relevant peer CCPs, and shall be compared with appropriate sector-wide benchmarks relevant for CCPs.
3. All assumptions shall result in plausible scenarios. The changes applied to determine worst-case or best-case assumptions shall focus, in particular, on aspects that are relevant for the CCP under the business reorganisation plan to ensure proportionality and efficiency.
4. The business reorganisation plan shall not, even under the worst-case or best-case scenarios, include resolution tools beyond the scope of the resolution scheme under implementation.
Appropriateness of the business reorganisation plan
1. The business reorganisation plan shall be consistent, to the extent possible, with the assessments carried out by the resolution authority and the competent authority in the period leading up to the establishment of that plan and with the valuations used to determine whether the conditions for resolution set out in Article 22(1) of the Regulation (EU) 2021/23 were met.
2. The business reorganisation plan shall link the measures therein to the outcome of the analysis of the factors and circumstances that caused the CCP to fail or to be likely to fail, and to the event that caused the resolution plan to be triggered, separating between default events, non-default events and a combination of both, depending on the circumstances of the situation.
3. The analysis of the external operating environment included in the business reorganisation plan shall be consistent, to the extent possible, with the analysis of opportunities and threats in the relevant markets, as determined by the resolution authority and competent authority when carrying out their tasks.
4. The business reorganisation plan shall not adversely affect the critical functions or core business lines of the CCP or the functioning of the financial system and overall financial stability.
5. The business reorganisation plan shall be feasible and shall ensure the following:
(a)
mitigation of any potential implementation impediments, such as labour law or other contractual arrangements;
(b)
that the planned measures, the timetable for their implementation and the assessment of the performance criteria have taken into account the specific characteristics of the CCP, including business organisation and clearing services, the links with clearing members, and to the extent the information is available, the direct clients and indirect clients of the CCP, trading venues, creditors and critical service providers and any material interdependencies of the CCP with other entities relevant to the CCP or interoperability arrangements with other FMIs;
(c)
that the situation in the relevant markets where the CCP provides clearing services is taken into account;
(d)
that the valuation used to calculate any expected proceeds from the selling of assets or business lines envisaged by the business reorganisation plan is prudent, reliable and realistic.
1. The CCP shall align the business reorganisation plan with previous business plans that it has prepared, where suitable, or the CCP shall explain in the business reorganisation plan why that plan materially deviates from the previous business plans.
2. The business reorganisation plan shall respect the resolution objectives laid down in Article 21 of the Regulation (EU) 2021/23.
