12.6.2023
1.3.
EN
Official Journal of the European Union
C 204/7
Cooperation within the CCP Supervisory Committee
1.3.1.
Involvement of central banks of issue
Currently, the involvement of central banks of issue in Union-level discussions regarding EU CCPs is highly asymmetrical to their respective role for Tier 2 third-country CCPs, even though EU CCPs account for the majority of clearing in Union currencies and the resulting risk implications.
Within the Eurosystem, this applies even in the field of over-the-counter (OTC) derivatives, where the reliance of Union clearing members on UK CCPs is most pronounced: EU CCPs account for around 60 % of the initial margin posted by Union clearing members to EU and UK CCPs (14).
However, while central banks of issue may participate in meetings of the CCP Supervisory Committee on a wide range of issues in relation to Tier 2 third-country CCPs, their respective involvement for EU CCPs is currently limited to the discussions concerning Union-wide CCP stress tests and relevant market developments (15).
Against this background, the ECB strongly welcomes the proposal to invite central banks of issue as non-voting members to all discussions of the EU CCP Supervisory Committee on EU CCPs (16).
This will enable central banks of issue to participate, for example, also in discussions of peer review analyses, regular information-sharing on relevant supervisory activities and decisions and all colleges’ opinions and recommendations.
1.3.2.
Involvement of prudential supervisors
The risk profile of a CCP can have an impact on the risk profile of the undertakings acting as clearing members of that CCP.
Such undertakings are mainly credit institutions and investment firms (17).
The resulting exposure has been steadily increasing since the global financial crisis of 2008 and the implementation of the G20 regulatory reform agenda incentivising central clearing.
The institutions acting as clearing members not only implement the clearing obligation for their own trades but also act as intermediary between CCPs and other market participants, being required, or choosing, to centrally clear those trades.
Thus, the interlinkage between institutions that act as clearing members and CCPs is vital and is expected to remain so in the future.
Considering this interlinkage, it is not only crucial for the competent authorities responsible for the supervision of such institutions to be fully informed and in a timely manner about the risks managed by CCPs but also that they are in a position to offer their supervisory expertise and perspectives.
Cooperation with the prudential supervisors can be better enhanced at the level of the CCP Supervisory Committee.
The tasks of the CCP Supervisory Committee, in particular the preparation of draft decisions on validation of significant changes to risk models or tiering, or the coordination of stress testing exercises, provide valuable insights on CCPs’ risk profiles and allow for a comprehensive understanding of CCPs.
By extension, given the aforementioned interlinkages between institutions acting as clearing members and CCPs, such discussions are also relevant for the risks these institutions may incur due to their exposures to CCPs.
Thus, the prudential supervisors of the institutions with the three largest contributions to the default fund of EU CCPs should participate within the CCP Supervisory Committee meetings as non-voting members.
In this way, supervisors will be informed in a timely manner on possible risks affecting individual institutions, and are able to address them, if and as needed, within ongoing supervision.
Such membership should be made permanent, rather than subject to an ad hoc invitation.
(14) (15) (16) (17)
ECB staff calculations for the period from December 2021 to August 2022, based on DTTC Data Warehouse data.
See paragraph 6 and 7 of Opinion CON/2017/39.
See Article 1, point (20)(a), of the proposed regulation, which amends Article 24a(2), point(d)(ii), of EMIR.
See Article 4, points (1) and (2), of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).