26 September 2012

The draft standards will now be sent to the European Commission for their adoption. The EBA also adopted an Opinion on the same topic.

Main features of the draft Regulatory Technical Standards (RTS)The draft regulatory technical standards (draft RTS) were developed by the EBA aim at specifying the requirements expressed in the EMIR Regulation (Regulation on OTC derivative transactions, central counterparties and trade repositories) regarding the capital of a CCP.

The draft RTS provide that a CCP should hold capital, including retained earnings and reserves, that is at all times at least equal to the sum of:

• The CCP’s gross operational expenses during an appropriate time span for winding down or restructuring its activities;
• The capital necessary to cover the overall operational and legal risks;
• The capital necessary to cover credit, counterparty credit and market risks not covered by specific financial resources; 
• The capital necessary to cover business risk. Since the level of business risk is highly dependent on the individual situation of each CCP, the capital requirement should be based on a CCP‟s own estimate subject to the approval of the competent authority.

Furthermore, a floor needs to be introduced in order to ensure a prudent level playing field for the capital requirements of a CCP. 

The EBA adopts draft technical standards on Capital Requirements for CCPs