Paragraph 33 Power to reduce variation margin paymentsI1I2
United Kingdom
The sixth stabilisation option is to make one or more variation instruments.
A variation instrument is an instrument that makes provision to reduce or cancel a variation margin payment that a CCP would have otherwise paid to a clearing member of the CCP.
The power under this paragraph may be exercised only for the purpose of recovering losses arising as a result of a clearing member defaulting on the member’s obligations to the CCP.
The power under sub-paragraph (1) does not apply to a clearing member—
which falls within Article 1(4) or (5) of EMIR, or
in relation to which a direction under regulation 3(1)(f) of the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019 (S.I. 2019/541) is in force.
In this paragraph, a “variation margin payment” means a payment reflecting an increase in the market value of a clearing member’s position in the market.
Annotations
Commencement
- I1
Sch. 11 para. 33 not in force at Royal Assent, see s. 86(3)
- I2
Sch. 11 para. 33 in force at 31.12.2023 by S.I. 2023/1382, reg. 8(b)