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Recital 35

Recital 35

(35)In such exceptional situations, central banks of issue might need to impose, to the extent allowed under their respective institutional frameworks, temporary requirements relating to liquidity risks, settlement arrangements, margin requirements, collateral or interoperability arrangements. Non-compliance with such temporary requirements might trigger the withdrawal by ESMA of the recognition of the Tier 2 CCP. Those requirements could include, in particular, temporary enhancements to the liquidity risk management of a Tier 2 CCP, such as increase in liquidity buffer, increase in the frequency of the collection of intraday margins, and limits to cross-currency exposures, or specific arrangements for depositing cash and settling payments in the currency of the central bank. The requirements should not extend to other areas of prudential supervision or amount automatically to withdrawal of recognition. Furthermore, the application of those requirements should only be a condition for recognition for a limited period of time of up to six months with a potential extension once to an additional period not exceeding six months. After expiration of this additional period, the application of those requirements should cease to be a condition for the recognition of a Tier 2 CCP. Nevertheless, in the context of a new or different exceptional situation, central banks of issue should not be prevented from imposing temporary requirements, the application of which would be a condition for the recognition of a Tier 2 CCP under Regulation (EU) No 648/2012.

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