EC legislation proposal on CCP recovery and resolution: ESMA issues advises
Context
- ESMA gives advises on the European Commission’s Proposal for the EU Regulation on CCP Recovery and Resolution, which has been submitted to the European Parliament and Council for approval and adoption
- The EC Proposal envisages that the supervisory colleges, which are currently responsible for the supervision of CCPs under the European Market Infrastructure Regulation (EMIR), will also have to reach joint decisions on recovery issues. In addition, specific resolution colleges made up of NRAs will have to be established.
- ESMA will have a mediation role within both supervisory and resolution colleges or decide when no joint opinion is reached. Moreover, the EC Proposal also amends EMIR to allow for the suspension of the clearing obligation in case a CCP enters into resolution.
ESMA opinion
The ESMA has issued an opinion on this draft EC proposal and proposes:
- to introduce additional requirements regarding NRAs’ recovery plans in order to ensure a higher level of convergence, while providing the necessary flexibility to CCPs to select those recovery tools which best fit their business situation;
- to consider a more effective mediation mechanism; and
- to consider the implications ESMA’s role has on its budget – e.g. to include a provision in the CCP Recovery and Resolution Regulation for ESMA to provide a budgetary impact assessment.
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