# Financial Services and Markets Act 2023, Paragraph 33: Power to reduce variation margin payments

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

(1) The sixth stabilisation option is to make one or more variation instruments.
(2) 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.
(3) 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.
(4) The power under sub-paragraph (1) does not apply to a clearing member—
(a) which falls within Article 1(4) or (5) of EMIR, or
(b) 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.
(5) 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.

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Source: https://www.legislation.gov.uk/ukpga/2023/29/schedule/11/paragraph/33 (the official version)
Page: https://openlegislation.uk/financial-services-and-markets-act-2023/schedule-11/paragraph-33
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.