# Commission Delegated Regulation (EU) No 153/2013 of 19 December 2012 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on requirements for central counterparties (Text with EEA relevance), Division SECTION 1: Financial instruments

Extent: E+W+S+N.I.

For the purposes of Article 46(1) of Regulation (EU) No 648/2012, highly liquid collateral in the form of financial instruments shall be financial instruments meeting the conditions provided for in point 1 of Annex II to this Regulation or transferable securities and money-market instruments which meet each of the following conditions:
(a) the CCP can demonstrate to the competent authority that the financial instruments have been issued by an issuer that has low credit risk based upon an adequate internal assessment by the CCP. In performing such an assessment, the CCP shall employ a defined and objective methodology that shall not fully rely on external opinions and that takes into consideration the risk arising from the establishment of the issuer in a particular country;
(b) the CCP can demonstrate to the competent authority that the financial instruments have a low market risk based upon an adequate internal assessment by the CCP. In performing such an assessment, the CCP shall employ a defined and objective methodology that shall not fully rely on external opinions;
(c) they are denominated in one of the following currencies:
(i) a currency the risk of which the CCP can demonstrate to the competent authorities that it is able to manage;
(ii) a currency in which the CCP clears contracts, in the limit of the collateral required to cover the CCP’s exposures in that currency;
(d) they are freely transferable and without any regulatory or legal constraint or third party claims that impair liquidation;
(e) they have an active outright sale or repurchase agreement market, with a diverse group of buyers and sellers, to which the CCP can demonstrate reliable access, including in stressed conditions;
(f) they have reliable price data published on a regular basis;
(g) they are not issued by:
(i) the clearing member providing the collateral, or an entity that is part of the same group as the clearing member, except in the case of a covered bond and only where the assets backing that bond are appropriately segregated within a robust legal framework and satisfy the requirements set out in this section;
(ii) a CCP or an entity that is part of the same group as a CCP;
(iii) an entity whose business involves providing services critical to the functioning of the CCP, unless that entity is an EEA central bank or a central bank of issue of a currency in which the CCP has exposures;
(h) they are not otherwise subject to significant wrong-way risk.

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Source: https://www.legislation.gov.uk/eur/2013/153/annex/I/section/1 (the official version)
Page: https://openlegislation.uk/eu-regulation-2013-153/annex-I/section-1
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.