AI Summary of Article 311 Own funds requirements for exposures to CCPs that cease to meet certain conditions
The provisions outlined mandate that institutions must respond promptly when they become aware, through public announcements or notifications from competent authorities or the CCP itself, that the CCP is no longer meeting the required conditions for authorisation or recognition.
Upon such awareness, institutions are required to take specific actions within three months. This includes applying certain regulatory treatments to their trade exposures, pre-funded contributions to the default fund, and any other exposures, which must then be treated as corporate exposures under the Standardised Approach for credit risk.
Article 311 Own funds requirements for exposures to CCPs that cease to meet certain conditions
1. Institutions shall apply the treatment set out in this Article where it has become known to them, following a public announcement or notification from the competent authority of a CCP used by those institutions or from that CCP itself, that the CCP will no longer comply with the conditions for authorisation or recognition, as applicable.
2. Where the condition set out in paragraph 1 is met, institutions shall, within three months of becoming aware of the circumstance referred to therein, or at an earlier time if the competent authorities of those institutions so require, do the following with respect to their exposures to that CCP:
(a) apply the treatment set out in point (b) of Article 306(1) to their trade exposures to that CCP;
(b) apply the treatment set out in Article 309 to their pre-funded contributions to the default fund of that CCP and to its unfunded contributions to that CCP;