# Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Text with EEA relevance), Article 497: Own funds requirements for exposures to CCPs

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

1. Where a third-country CCP applies for recognition in accordance with Article 25 of Regulation (EU) No 648/2012, institutions may consider that CCP as a QCCP from the date on which it submitted its application for recognition to the Bank and until one of the following dates:
(a) where the Treasury have made regulations under Article 25(6) of Regulation (EU) No 648/2012 in relation to the third country in which the CCP is established and that implementing act has entered into force, two years after the date of submission of the application;
(b) where the Treasury have not yet made regulations under Article 25(6) of Regulation (EU) No 648/2012 in relation to the third country in which the CCP is established or where that implementing act has not yet entered into force, the earlier of the following dates:
(i)two years after the date of entry into force of the regulations;
(ii)for CCPs that submitted the application after 27 June 2019, two years after the date of submission of the application;
(iii)for those CCPs that submitted the application before 27 June 2019, 28 June 2021.
2. Until the expiration of the deadline referred to in paragraph 1 of this Article, where a CCP referred to in that paragraph does not have a default fund and does not have in place a binding arrangement with its clearing members that allows it to use all or part of the initial margin received from its clearing members as if they were pre-funded contributions, the institution shall substitute the formula for calculating the own funds requirement in Article 308(2) with the following one:
KCMi=maxKCCP×IMiDFCCP+IM ; 8 %×2 %×IMi
where:
KCMi the own funds requirement;
K CCP the hypothetical capital of the QCCP communicated to the institution by the QCCP in accordance with Article 50c of Regulation (EU) No 648/2012;
DF CCP the pre-funded financial resources of the CCP communicated to the institution by the CCP in accordance with Article 50c of Regulation (EU) No 648/2012;
i the index denoting the clearing member;
IM i the initial margin posted with the CCP by clearing member i; and
IM the total amount of initial margin communicated to the institution by the CCP in accordance with Article 89(5a) of Regulation (EU) No 648/2012.
3. In exceptional circumstances, where it is necessary and proportionate in order to avoid disruption to international financial markets, the Treasury may by regulations extend by 12 months on each occasion the transitional provisions set out in paragraph 1 of this Article.

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Source: https://www.legislation.gov.uk/eur/2013/575/article/497 (the official version)
Page: https://openlegislation.uk/eu-regulation-2013-575/article-497
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.