ESMA has published a CCP resolution briefing setting out how national resolution authorities should operationalise the write-down and conversion of instruments (WDCI) tool in CCP resolution planning.
The briefing, issued by ESMA’s CCP Resolution Committee, is non-binding and intended to provide a common methodology for incorporating WDCI into resolution plans. It states that authorities should consider the tool as part of a broader framework to allocate losses and, where relevant, recapitalise a CCP.
Access to data
The document places emphasis on access to CCP data and its use for calibration. It notes that resolution authorities should define the data required from CCPs and that information should be available “within a few hours” in crisis situations.
ESMA also sets out expectations on implementation processes, including assessment of impacts on clearing members and financial market infrastructures, as well as steps required after application of the tool, including reorganisation of the CCP.
The briefing follows earlier ESMA work on CCP resolution tools and is positioned as part of efforts towards a more consistent approach to CCP resolution planning across the EU.
