Introduction of an Additional Security Layer for Clearing Members
Under the new legal framework for CCP recovery and resolution planning, the Austrian CCP (CCP.A) is required to allocate additional funds to a pre-funded cash pool. These funds will contribute to the default fund and will be utilized in the event of a member default. These cash pool resources will be used before any request is made to clearing members to replenish the default fund.
This addition introduces an extra layer of security to the sequence of resources that CCP.A can employ in the event of a member default. Below is a diagram illustrating the order in which resources are utilized in CCP.A's default waterfall.
The recently added layer is entirely funded by CCP.A, as depicted in the chart above, and therefore does not entail any additional obligations for Clearing Members. In the chart, the CCP.A's 'Skin-in-the-game' comprises both the previously enhanced EMIR capital requirement and the new requirement outlined in CCPRRR.
The new framework has been included in the General Terms and Conditions of the CCP.A, which came into force on August 3, 2023.
