Decision (EU) 2025/1734 of the European Central Bank of 31 July 2025 on safeguards in relation to access by central counterparties to Eurosystem overnight credit in TARGET (ECB/2025/29)
Definitions
For the purposes of this Decision, the following definitions apply:
(1)
‘central counterparty’ or ‘CCP’ means a central counterparty that is authorised under Regulation (EU) No 648/2012;
(2)
‘eligible CCP’ means an eligible CCP as defined in Article 2, point (26a), of Guideline (EU) 2022/912 (ECB/2022/8);
(3)
‘CCP credit facility’ means the CCP credit facility as defined in Article 2, point (18a), of Guideline (EU) 2022/912 (ECB/2022/8);
(4)
‘euro area NCB’ means euro area NCB as defined in Article 2, point (27), of Guideline (EU) 2022/912 (ECB/2022/8);
(5)
‘Eurosystem central bank’ means the European Central Bank (ECB) or a euro area NCB;
(6)
‘private funding arrangement’ means a funding arrangement other than a borrowing facility that may be accessible through a euro area NCB;
(7)
‘private liquidity provider’ means a liquidity provider other than a euro area NCB.
Requirements relating to safeguards on financial soundness
1. In order to safeguard their financial soundness, eligible CCPs shall meet the following requirements on an ongoing basis:
(a)
the capital requirements pursuant to Article 16 of Regulation (EU) No 648/2012;
(b)
the margin requirements pursuant to Article 41 of Regulation (EU) No 648/2012;
(c)
the requirements in relation to pre-funded financial resources pursuant to Articles 42 and 43 of Regulation (EU) No 648/2012.
2. In the event of a default of a clearing member of a CCP where the CCP conducts its default management process in accordance with Articles 45 and 48 of Regulation (EU) No 648/2012 and as a result uses the margins posted by the defaulted clearing member and the pre-funded financial resources referred to in Articles 42 and 43 of Regulation (EU) No 648/2012, the following shall apply:
(a)
the CCP shall have sufficient pre-funded financial resources, including the margins posted by the defaulted clearing member and the pre-funded financial resources, as set out in Articles 42 and 43 of Regulation (EU) No 648/2012, to cover credit losses incurred as a result of the default management process;
(b)
on the basis of the assessment conducted in accordance with Article 4, the Eurosystem central banks may decide to temporarily waive the requirement set out in paragraph 1, point (c), where the CCP presents a plan to replenish pre-funded financial resources as set out in Articles 42 and 43 of Regulation (EU) No 648/2012 in a credible and timely manner.
3. No CCP deemed to be failing or likely to fail as determined under Article 22 of Regulation (EU) 2021/23 of the European Parliament and of the Council ( 4 ) shall be considered financially sound.
Requirements relating to safeguards on sound liquidity risk management
1. In order to safeguard their sound liquidity risk management with respect to the euro, eligible CCPs shall meet the following requirements on an ongoing basis:
(a)
have liquidity risk controls in place to ensure that access to the CCP credit facility or – where such access is available to CCPs authorised as credit institutions under Regulation (EU) No 575/2013 – to Eurosystem monetary policy operations, shall:
(i)
be a last resort;
(ii)
be limited to scenarios which due to their severity may present considerable challenges for the liquidity management of the CCP (‘crisis scenarios’);
(iii)
constitute a temporary funding source on the basis of a credible plan to reimburse the amount used under the CCP credit facility or – where such access is available to CCPs authorised as credit institutions under Regulation (EU) No 575/2013 – under Eurosystem monetary policy operations as soon as possible;
(iv)
not be for the purpose of meeting payment obligations in relation to currencies other than the euro;
(b)
meet the requirements in relation to liquidity risk controls in accordance with Article 44 of Regulation (EU) No 648/2012.
2. In the event of the default of a clearing member where the CCP conducts its default management process in accordance with Articles 45 and 48 of Regulation (EU) No 648/2012 and as a result uses the liquid resources referred to in Article 44 of Regulation (EU) No 648/2012, the following shall apply:
(a)
with respect to the requirement set out in paragraph 1, point (a), the assessment conducted in accordance with Article 4 may be conducted after the CCP has completed the default management process;
(b)
on the basis of the assessment conducted in accordance with Article 4, the Eurosystem central banks may decide to temporarily waive the requirement set out in paragraph 1, point (b), where the CCP presents a plan to replenish the liquid resources as referred to in Article 44 of Regulation (EU) No 648/2012 in a credible and timely manner.
3. For the purpose of assessing a CCP’s compliance with paragraph 1, point (a), the following may be taken into account:
(a)
the liquidity risk due to overreliance on a single type of private funding arrangement;
(b)
the liquidity risk due to overreliance on too few private liquidity providers;
(c)
the liquidity risk due to the low number of private liquidity providers of the CCP that have access to the Eurosystem’s monetary policy operations.
4. With respect to paragraph 1, point (b), the Eurosystem central banks may take the following into account for the purpose of assessing the extent to which the private funding arrangements are pre-arranged and highly reliable, including under stressed market conditions:
(a)
the scope and degree of the due diligence to which private funding arrangements are subjected by the CCP;
(b)
the comprehensiveness and frequency of the testing of access to private funding arrangements, and the methodology and stress scenario context utilised for this purpose;
(c)
the validation of the test results, in particular in relation to the estimated amounts of liquidity provision on the basis of the private funding arrangements.
Assessment of safeguards
1. The Eurosystem central banks shall carry out assessments of compliance by eligible CCPs with the requirements relating to safeguards on financial soundness and sound liquidity risk management provided for in Articles 2 and 3 on a quarterly basis and in a forward-looking manner.
2. If an event occurs between the quarterly assessments provided for in paragraph 1 that could raise concerns in relation to an eligible CCP’s financial soundness and liquidity risk management, the Eurosystem central banks shall also carry out occasional assessments of the compliance by an eligible CCP with the requirements on financial soundness and sound liquidity risk management provided for in Articles 2 and 3, including by way of ad hoc intensified monitoring and in a forward-looking manner.
3. For the purpose of the assessments provided for in paragraphs 1 and 2, the following information may be taken into account:
(a)
quantitative information on capital, margin, default fund, other financial resources and liquidity risk controls reported within the context of Regulation (EU) No 648/2012;
(b)
any additional information on capital, margin, default fund, other financial resources and liquidity risk controls;
(c)
information on elements listed in Article 3(1), point (a), with respect to a CCP’s liquidity risk controls regarding stress situations;
(d)
any other information that is considered relevant, in particular if it raises substantial concerns about a CCP’s financial soundness, sound liquidity risk management, general risk management framework and governance.
4. The eligible CCP shall provide the information referred to in paragraph 3, if requested to do so by the relevant euro area NCB.
Discretionary measures
1. The Governing Council may decide to adopt, revise or remove discretionary measures with respect to the CCP credit facility on the grounds of prudence. These measures shall be applied by the respective euro area NCB and shall include:
(a)
rejecting, limiting the use of or applying supplementary valuation haircuts to the assets mobilised as collateral for the purposes of the CCP credit facility;
(b)
limiting, suspending or terminating access to the CCP credit facility as further specified in paragraphs 3 to 7.
2. The Governing Council shall ensure that the measures referred to in paragraph 1 are taken in a proportionate and non-discriminatory manner and are duly justified.
3. Unless decided otherwise by the Governing Council, a CCP which does not comply with the requirements set out in Articles 2 and 3 shall have its access to the CCP credit facility automatically limited on the grounds of prudence. If compliance has not been restored through adequate and timely measures at the latest within 16 weeks from the date of the determination of non-compliance with the requirements set out in Articles 2 and 3 on the basis of the assessments provided for in Article 4, the CCP’s access to the CCP credit facility shall be suspended on the grounds of prudence. Such measures shall be applied by the respective euro area NCB.
4. Without prejudice to the measures referred to under paragraph 3, access to the CCP credit facility may be limited or suspended on the grounds of prudence for an eligible CCP for which information necessary for the purpose of the assessments provided for under Article 4 is incomplete or is not made available to the Eurosystem central banks. Access shall be restored once the relevant information becomes available to the Eurosystem central banks and the CCP has been assessed as meeting the requirements of Articles 2 and 3.
5. Upon the limitation of access to the CCP credit facility provided for in this Article, the relevant eligible CCP may maintain a restricted level of access to the CCP credit facility. Unless decided otherwise by the Governing Council, that restricted level of access shall correspond to the level of the usage of the CCP credit facility at the time when the Eurosystem central banks become aware of:
(a)
in the case set out in paragraph 3, the relevant eligible CCP’s non-compliance with the requirements set out in Articles 2 and 3;
(b)
in the case set out in paragraph 4, the incompleteness or unavailability of information necessary for the purpose of the assessments provided for under Article 4.
6. In the event of a suspension of access to the CCP credit facility provided for in this Article, any outstanding credit shall immediately become repayable in full.
7. In the event of a termination of access to the CCP credit facility provided for in this Article, any outstanding credit shall immediately become repayable in full and the CCP subject to such termination shall immediately cease to be eligible for access to the CCP credit facility.
Penalties in relation to safeguards and discretionary measures
1. Unless decided otherwise by the Governing Council, the respective euro area NCB shall apply penalties in the following cases:
(a)
where a CCP’s access to the CCP credit facility is limited in accordance with Article 5 and the CCP exceeds the restricted level of access; or
(b)
where a CCP resorts to the CCP credit facility in breach of Article 3(1), point (a).
2. The penalties referred to in paragraph 1 shall take the form of penalty interest rates, which shall be calculated in line with:
(a)
Annex I, Part II, Article 12a(3), point (a), to Guideline (EU) 2022/912 (ECB/2022/8), if the case set out in paragraph 1, point (a) or point (b), occurs for the first time within any 12-month period;
(b)
Annex I, Part II, Article 12a(3), point (b), to Guideline (EU) 2022/912 (ECB/2022/8), if the case set out in paragraph 1, point (a) or point (b), occurs for at least the second time within the same 12-month period.
3. The penalty interest rates referred to in paragraph 2 shall be applied to:
(a)
in the case set out in paragraph 1, point (a), the amount used under the CCP credit facility in excess of the restricted level of access set as a permitted limit; or
(b)
in the case set out in paragraph 1, point (b), the full amount used under the CCP credit facility.
Implementation through contractual arrangements
Euro area NCBs shall take the necessary measures to implement Articles 2 to 6 through contractual arrangements with eligible CCPs where relevant, by the date referred to in Article 8(2).
Entry into force
1. This Decision shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union .
2. It shall apply from 6 October 2025.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
