ESMA provides guidance on a key tool for CCP resolution
The European Securities and Markets Authority (ESMA) has published its first CCP resolution briefing to support National Resolution Authorities (NRAs) in operationalizing the cash call mechanism. The briefing provides a methodology for NRAs to consider when including the resolution cash call in CCP resolution plans. The methodology involves defining relevant data to be collected by the CCP to calibrate available resources through a cash call. NRAs should consider the impact on stakeholders such as clearing members, financial markets, and financial market infrastructures. They should also ensure appropriate processes are in place for executing cash calls and test their effectiveness through dry-runs. The briefing aims to enhance NRAs' preparedness for implementing a resolution cash call. By promoting consistent practices across jurisdictions, it fosters effective financial markets and financial stability, a strategic priority for ESMA. The CCP Resolution Committee developed the briefing. ESMA is the EU's financial markets regulator and supervisor. The briefing supports ESMA's goal of promoting financial stability. The publication of the briefing is a key step in ESMA's efforts to support CCP resolution. The briefing is available on ESMA's website.