Financial Services and Markets Act 2023

Overview U.K.

1 (1) The purpose of the special resolution regime for CCPs (see Part 5 of this Schedule) is to address the situation where all or part of the business of a CCP has encountered, or is likely to encounter, financial difficulties.

(2) The special resolution regime consists of the eight stabilisation options.

(3) The eight stabilisation options are—

(a) transfer to a private sector purchaser (paragraph 27),

(b) transfer to a bridge central counterparty (paragraph 29),

(c) transfer of ownership (paragraph 30),

(d) terminating clearing member contracts (paragraph 31),

(e) making a cash call (paragraph 32),

(f) reducing variation margin payments (paragraph 33),

(g) writing down liabilities (paragraphs 34 and 35), and

(h) taking control of the CCP (paragraph 38).

(4) The stabilisation options are achieved through the exercise of one or more of the “stabilisation powers” which are—

(a) the share transfer powers (paragraphs 41 and 49 to 53),

(b) the property transfer powers (paragraphs 54 and 67 to 74), and

(c) the other resolution powers (paragraphs 31 to 35 and 38).

(5) Each of the following has a role in the operation of the special resolution regime—

(a) the Bank,

(b) the Treasury,

(c) the PRA, and

(d) the FCA.

(6) Other Parts of this Schedule deal with the following matters—

(a) powers and requirements in relation to CCPs which are exercisable by the Bank in advance of reliance on the special resolution regime (see Parts 2 to 4);

(b) powers relating to information, investigation and enforcement in relation to requirements under this Schedule (see Part 6);

(c) third-country resolution action (see Part 7);

(d) other general provision, financial provision and consequential amendments (see Parts 8 to 10).

Commencement Information

I1 Sch. 11 para. 1 not in force at Royal Assent, see s. 86(3)

I2 Sch. 11 para. 1 in force at 31.12.2023 by S.I. 2023/1382, reg. 8(b)