NBB Circular 2024_14 / ESMA Guidelines on the resolution of central counterparties

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Circular Brussels, 4 October 2024 Reference: Your contact: Cedric Fobe Tel. +32 2 221 32 83 Cedric.fobe@nbb.be NBB 2024 14 ESMA Guidelines on the resolution of central counterparties

Scope The approved and recognized Belgian central counterparties as referred to in Article 2(1) of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories.

Summary and objective This circular implements various guidelines from the European Securities and Markets Authority (ESMA) regarding the resolution of central counterparties.

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Dear Sir, Dear Madam,

By this circular, the National Bank of Belgium, in its capacity as the resolution authority for central counterparties (hereinafter, the "CCP") pursuant to Article 12ter, §1/1 of the Law of 22 February 1998 fixing the organic statute of the National Bank of Belgium (hereinafter, the "Bank"), intends to communicate that the following guidelines from the European Securities and Markets Authority (hereinafter, the "ESMA") regarding the resolution of CCPs are integrated into its practice. The Bank intends to apply the following guidelines if a CCP is established in Belgium.

The circular contains a brief explanation of the various ESMA guidelines, accompanied by a link to the relevant documents. The ESMA guidelines included herein are all addressed to the Bank as the resolution authority for CCPs.

ESMA Guidelines on the resolution of CCPs

a. Guidelines on the type and content of provisions relating to cooperation agreements (Article 79 of the CCP Recovery and Resolution Regulation) These Guidelines indicate the type and content of the provisions of cooperation agreements to be concluded with relevant third-country authorities as provided for in Article 79 of Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020 laying out a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365, as well as Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 (hereinafter, the "CCP Recovery and Resolution Regulation").

These Guidelines are available via the following link: https://www.esma.europa.eu/sites/default/files/2024-02/ESMA91-372-1791 Guidelines on Cooperation Arrangements_ Article 79 of CCPRRR FR.pdf

b. Guidelines concerning the written arrangements and procedures for the functioning of resolution colleges These Guidelines specify the content of the written arrangements and procedures for the functioning of resolution colleges referred to in Article 4(1) of the CCP Recovery and Resolution Regulation, regarding the tasks mentioned in Articles 12 (Resolution Planning), 15 (Resolvability Assessment) and 16 (Removal or mitigation of obstacles to resolvability) of the same regulation, as well as those mentioned in Commission Delegated Regulation (EU) 2023/1192.

These Guidelines are available via the following link: https://www.esma.europa.eu/sites/default/files/2024-02/ESMA91-372-1958 GLs on written arrangements and procedures for the resolution colleges FR.pdf

c. Guidelines on the method that the resolution authority must use to determine the valuation of contracts prior to their termination referred to in Article 29(1) of the CCP Recovery and Resolution Regulation These Guidelines specify the method that the resolution authority must use to determine the valuation of contracts prior to their termination referred to in Article 29(1) of the CCP Recovery and Resolution Regulation.

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These Guidelines are available via the following link: https://www.esma.europa.eu/sites/default/files/2023-06/ESMA91-372-206_Guidelines on Valuation prior to Termination FR.pdf

d. Guidelines on the application of circumstances in which the failure of a CCP is deemed to be occurring or likely to occur (Article 22(6) of the CCP Recovery and Resolution Regulation) These Guidelines specify the various circumstances in which the failure of a CCP is deemed to be occurring or likely to occur. This is one of the three cumulative conditions set out in Article 22(1) of the CCP Recovery and Resolution Regulation justifying the adoption of a resolution measure. In particular, these Guidelines draw up a list of objective elements that should contribute to determining whether the failure of a CCP is occurring or likely to occur, in accordance with the situations set out in Article 22(3) of the CCP Recovery and Resolution Regulation.

Furthermore, these Guidelines contain guidelines on consultation and the exchange of information between the competent authority (in Belgium, the National Bank of Belgium) and the resolution authority for the purpose of determining whether the failure of a CCP is occurring or likely to occur.

These Guidelines are available via the following link: https://www.esma.europa.eu/sites/default/files/2023-06/ESMA91-372-2070 Guidelines FoLTF Art.22 6 CCPRRR FR.pdf

e. Guidelines concerning the assessment of resolvability (Article 15(5) of the CCP Recovery and Resolution Regulation) These Guidelines establish a common set of aspects that resolution authorities must examine when applying the 26 questions provided for in Annex to the CCP Recovery and Resolution Regulation, Section C, during the assessment of the resolvability of a CCP.

These Guidelines are available via the following link: https://www.esma.europa.eu/sites/default/files/2024-02/ESMA91-372-2346_Guidelines_on_the assessment of resolvability Article 15 5 of CCPRRR FR.pdf

f. Guidelines on the summary of resolution plans Pursuant to Article 12(7)(a) of the CCP Recovery and Resolution Regulation, the resolution plan must contain a summary of the key elements of the plan. This information must, according to Article 12(8) of the same regulation, be communicated to the CCP concerned. These Guidelines:

• clarify the key elements that should be included in the summary mentioned above; and
• contain a template that resolution authorities should use for the preparation of the resolution plan summary.

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These Guidelines are available via the following link: http://www.esma.europa.eu/sites/default/files/2024-02/ESMA91-372-2345 Guidelines on the summary of resolution plans FR.pdf

Please accept, Sir, Madam, the expression of my distinguished consideration.

Pierre Wurtsch Governor • President of the Resolution College

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