The Bank of England’s approach to using its requirements and permissions powers to facilitate mobilisation of new CCPs

1: Overview

1. This consultation paper (CP) seeks views on the Bank of England’s (Bank’s) proposal for a new statement of policy (SoP) that will establish the Bank’s approach to using its permissions and requirements powers to facilitate a discretionary mobilisation stage as part of the onboarding process of new central counterparties (CCPs). In particular, this draft SoP sets out how the Bank will use these powers to impose de minimis limits under which the CCP will operate throughout the duration of the agreed mobilisation period and, where appropriate, to give permission to modify or waive certain rules.

2. The Bank published its approach to onboarding new financial market infrastructure (FMI) firms (the new FMI onboarding approach) in July 2025. This approach clarified that new FMIs, including CCPs, could pursue the discretionary stage of mobilisation, which takes place after a firm has been authorised or recognised (Figure 1). The Bank’s approach to onboarding new firms supports innovation by prospective FMIs in a safe manner that minimises risks to financial stability. Innovation in the FMI landscape offers many benefits, which can allow for more effective and efficient services to households and businesses, supporting economic growth in the UK.

Figure 1: Different paths FMIs could take through the stages of the supervisory approach

3. During mobilisation, a CCP would operate under de minimis limits and be subject to proportionate regulatory oversight. Mobilisation can provide an efficient way for new CCPs to provide further assurance that they are able to meet their business-as-usual regulatory requirements, build out their capabilities, and facilitate live testing with de minimis amounts of business. Mobilisation is not the stage at which CCPs should commence the building out of strategies, processes, and systems, but instead provides additional time to deliver these elements while subject to de minimis limits. A CCP should anticipate that the levels of activity allowed during mobilisation would be correspondingly minimal, enabling live testing rather than the volume of risk or activity that a CCP might expect during a scaling phase or business-as-usual operations. The CCP will need to fully meet any outstanding regulatory requirements by the end of mobilisation to exit this stage.

4. The new FMI onboarding approach stated that the Bank would consult on using its permissions power to amend relevant regulatory requirements as part of the mobilisation process, if it deemed it appropriate to do so. This draft SoP (the Annex) sets out the Bank’s approach to using both its requirements and permissions powers, in light of the interlinked nature of the powers when delivering a mobilisation period for CCPs in practice.

5. The Bank was given requirements powers under section 55L of Financial Services and Markets Act 2000 (FSMA), as amended by the Financial Services and Markets Act 2023 (FSMA 2023) and as applied by paragraph 9B of Schedule 17A to FSMA. The requirements powers are a supervisory tool that allows the Bank to require an entity to take a specified action or refrain from taking a specified action. In the case of mobilisation, this requirement will take the form of the CCP operating under de minimis limits. The requirements powers can be voluntary in nature, where an entity makes an application (a VREQ) to the Bank for a requirement to be imposed. The Bank can also impose a requirement on its own initiative (an OIREQ).^{footnote [1]} In the case of mobilisation, prospective CCPs can submit a VREQ application setting out the de minimis limits that they propose to operate under during the mobilisation stage of the onboarding process.

6. The permissions power enables the Bank, under section 138BA of FSMA, as amended by FSMA 2023 and as applied by paragraph 10 of Schedule 17A to FSMA, to give a permission for the modification or waiver of a rule. Before the power can be used, HM Treasury (HMT) must first set out the scope of the rules the power can apply to, through regulations. HMT have published a draft policy statement noting that it intends to make regulations that set the scope of the Bank’s permissions power as applying to any Bank rules. The Bank recently completed a consultation on its approach to using this power. The Bank expects this power to apply to the full FMI Rulebook, including the rules for CCPs (hereon the Bank’s CCP Rulebook), and to follow the approach to specific permissions as set out within subject-specific SoPs, such as the one set out in this consultation.

7. This CP seeks views on how the Bank proposes to use its requirements and permissions powers to facilitate a discretionary mobilisation stage for new CCPs. This includes the types of de minimis limits that might be appropriate, the rules that would be in scope for permissions, how CCPs can apply for mobilisation, and the information that prospective CCPs should provide, along with details on how CCPs would exit mobilisation.

8. This CP is relevant to all prospective UK CCPs seeking recognition by the Bank.

9. The Bank considers that its proposed approach advances the Bank’s primary financial stability objective to protect and enhance the stability of the financial system in the UK^{footnote [2]} by providing greater transparency regarding the mobilisation process and setting de minimis limits on the amount of activity a new CCP can conduct during mobilisation. These limits would restrict activity to minimal levels to support live testing, rather than the volume of risk or activity that a new CCP might expect in scaling or business-as-usual operations. De minimis limits mitigate the risks a new CCP might pose, particularly when operating with modifications to or waivers of certain rules.

10. Furthermore, the Bank considers that the proposals advance the Bank’s secondary innovation objective^{footnote [3]} by supporting market entry and fostering innovation in the sector. By providing the ability for CCPs to complete the final build out of their operations or to modify or waive certain rules, if necessary, during mobilisation, the Bank intends to remove potential barriers to entry and to support innovation in the FMI sector. In addition, providing clarity on our approach will support prospective CCPs’ ability to plan ahead and innovate.

11. As producing general policy on how the Bank proposes to perform functions under FSMA is an ‘FMI function’ within the meaning of section 30D(3) of the Bank of England Act 1998 (‘BoE Act’), the Bank is required to have regard to specified matters^{footnote [4]} known as ‘have regards’ in developing its policy.

12. The Bank considers that the following ‘have regards’ under section 30E of the BoE Act are the most significant to the development of this SoP:

• The principle that a burden or restriction which is imposed on a person, or on the carrying on of an activity, should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction.
• The principle that the Bank should exercise its FMI functions as transparently as possible.
• The need to use the resources of the Bank in the most efficient and economic way.
• The desirability where appropriate of the Bank exercising its FMI functions in a way that recognises differences in the nature of, and objectives of, businesses carried on by different persons.

13. The Bank considers that the following recommendations in the remit letter from the Chancellor of the Exchequer to which the Financial Market Infrastructure Committee (FMIC) should have regard are the most significant to the development of this SoP:

• The vital role UK FMIs play in protecting and upholding the financial stability of the UK, as well as other global markets.
• The importance of actively facilitating innovation in FMIs so that incumbents and new entrants are able to innovate responsibly and scale up new technology and processes in the UK.
• The role of proportionate regulation in facilitating growth.
• Streamlining administrative burdens and processes for FMIs to offer new products and services where possible, while maintaining high regulatory standards.

14. FSMA requires the Bank to undertake cost benefit analysis (CBA) when using certain rule-making powers.^{footnote [5]} Although these proposals do not involve rule-making, the Bank has also included a non-statutory CBA, as a matter of best practice.

Background

15. The Bank’s approach to onboarding new FMI firms sets out the process for onboarding new FMIs. For new CCPs, this includes up to four stages: a risk assessment prior to recognition, recognition, mobilisation, and scaling. Mobilisation and scaling are both discretionary stages. These stages could support new or start-up firms in completing aspects of their operational set-up (such as those that depend on securing further investment) that would have otherwise been difficult to achieve before recognition. The Bank set out in the new FMI onboarding approach that, as part of the process of moving to a UK rulebook for CCPs as provided for in the Bank’s consultation on Ensuring the resilience of CCPs, it would consider whether it would be appropriate to use its permissions power to amend any regulatory requirements to support new CCPs. The Bank said it would consult on an SoP setting out those areas in due course.

16. FSMA 2023^{footnote [6]} amended FSMA to give the Bank the power to impose requirements on recognised CCPs. The requirements powers allow the Bank to require a CCP to take, or refrain from taking, a specified action. The Bank may use this power to impose a new requirement, vary a requirement, or cancel an existing requirement, either on application by a CCP or the Bank’s own initiative.

17. FSMA 2023 also amended FSMA to introduce a new power for the Bank to allow a recognised CCP to modify or waive a rule, by granting a permission under the ‘permissions power’. In particular, this power allows the Bank, on application by or with the consent of a CCP that is subject to Bank rules, to give a permission that enables the firm to not apply the rules, or to apply the rules with a modification specified in the permission. The permissions power is distinct to the existing general modification and waiver power also found in FSMA.^{footnote [7]} In particular, this is because, unlike the permissions power, the general modification and waiver power has statutory conditions for use.

18. This consultation sets out the Bank’s general approach to the imposition of voluntary requirements to operate under de minimis limits and to the granting of rule permissions during mobilisation, as well as the application process for entering into mobilisation.

19. This consultation is being published following the Bank’s consultation on Ensuring the resilience of CCPs, which set out the Bank’s proposed approach to replacing the firm-facing elements of the UK European Market Infrastructure Regulation (UK EMIR) and the related legally binding technical standards (BTS) with Bank rules. The Bank expects that the permissions power will be applicable to these rules, hereon the CCP rules, once they are finalised post consultation, alongside other rules sitting within the Bank’s FMI Rulebook.

20. As such, the references to specific rules in the draft SoP under this consultation should not be taken to reflect a final stance on any particular rule and, if relevant, final rules may be updated as part of the Bank’s wider response to the feedback received during the consultation. In addition, the draft SoP also draws on recent consultations on The Bank of England's approach to rule permissions and waivers and on Operational resilience: operational incident and outsourcing and third-party reporting for financial market infrastructures. The draft SoP may be updated to reflect any relevant changes in those final rules or statements of policies.

Implementation

21. The final SoP will be published (and take effect) following consideration of feedback received as a result of this consultation. The SoP will also contain interlinkages with other policies or currently draft rules that the Bank has recently consulted on. As set out above, the final SoP will reflect and link to the final versions of those policies and rules. The Bank notes that the point at which this policy comes into effect has two key dependencies.

22. First, the timing depends on the publication date of the final CCP rules and IOREP reporting rules in the Bank’s FMI Rulebook, which will need to take into account the feedback received during the Bank’s consultations on Ensuring the resilience of CCPs and Operational resilience: operational incident and outsourcing and third-party reporting for financial market infrastructures. Publication of the final CCP rules will occur no earlier than the end of the first half of 2026 and there will then be a transitional implementation period for most rules. The Bank proposes that the final mobilisation SoP will enter into effect at the same time as the final CCP rules.

23. Second, before the permissions power can be used, HMT must first make regulations setting out the scope of the rules to which the power applies. Although these regulations have not yet been made, HMT have published a policy statement noting that it intends to make regulations that set the scope of Bank’s permissions power as applying to any Bank rules, similar to the approach taken for the Prudential Regulation Authority.

Consultation questions, responses, and next steps

24. This consultation closes on 4 June 2026.

25. The Bank invites feedback on the proposals set out in this consultation through the questions listed below. Responses can be submitted via email at CCP_mobilisation_CP@bankofengland.co.uk or by using the consultation response form.

• Do you have any comments on the Bank’s proposed approach to using its requirements powers to impose de minimis limits during mobilisation via a VREQ application as set out in this CP and draft SoP?
• Do you have any comments on the Bank’s proposed approach to using its permissions power to give permission to modify or waive certain rules during mobilisation as set out in this CP and draft SoP?
• Do you have any comments on the mobilisation application process or form, including the section for voluntary requirements (VREQ application form) sought under s55L(5) of FSMA, as set out in the Appendix of the draft SoP?
• Do you have any other comments on the proposals set out in this CP or the draft SoP?

26. Please indicate in your response if you believe any of the proposals in this CP are likely to impact persons who share protected characteristics under the Equality Act 2010, and if so, please explain which groups and what the impact on such groups might be.

2: The Bank’s proposals

27. The Bank proposes a new subject-specific SoP setting out the Bank’s approach to granting permissions under s138BA of FSMA and to applications by CCPs for a VREQ under s55L(5) of FSMA to operate under de minimis limits during a discretionary mobilisation period. As noted earlier in this consultation, the Bank has recently consulted on a range of subject-specific statements of policy as part of its consultation on Ensuring the resilience of CCPs relating to rule-specific permissions in the CCP rules. The Bank considers that setting out its approach to using its permissions and requirements powers to facilitate mobilisation for new CCPs in the draft SoP (Annex) will help to improve clarity and transparency over the process the Bank will use to assess mobilisation applications, including the assessment criteria. This in turn should make the process more efficient and reduce unnecessary costs for both the Bank and industry by reducing the need to clarify relevant requirements.

The Bank’s proposed approach to imposing de minimis limits during mobilisation

28. The key elements of the Bank’s approach to using its requirements powers to set de minimis limits during mobilisation are that:

• the application for imposition of a requirement by a firm is voluntary, but is an important element of the discretionary mobilisation stage;
• as VREQ applications can only be legally made by recognised CCPs, a prospective CCP should submit a ‘provisional’ VREQ application containing its de minimis limits proposal;
• the Bank will provisionally assess it, and will make a decision at the point of recognition on whether to grant the application;
• the precise type of de minimis limits that will be imposed will be determined on a case-by-case basis, and the Bank’s views and decision on appropriate limits will depend on the effectiveness of the limit (or limits) in minimising activity to live testing levels; and
• to exit mobilisation, CCPs will need to notify the Bank prior to the end of the mobilisation period (three months in advance for a 12-month mobilisation period).

29. The Bank considers that de minimis limits could include, non-exhaustively, limits on different aspects of the prospective CCP’s business, such as the scope and volume of clearing activity, CCP membership, and loss and/or risk metrics. Effective de minimis limits should minimise activity to levels that allow for live testing but would not allow for the kind of volume of risk or activity that a new CCP might expect to experience during scaling or business-as-usual operations.

30. The Bank encourages prospective CCPs to engage with the Bank prior to submission of their proposed de minimis limits so that the Bank can provide early engagement on what might be appropriate. However, the Bank will retain its discretion to reject VREQ applications, in particular where these do not fulfil the desired purpose of de minimis limits, are arbitrary, or otherwise do not meet the criteria set out in the SoP. A decision will only be taken after the VREQ application is legally made, and views expressed by the Bank during engagement should not be taken as an indication of the Bank’s decision.

31. The new CCP will need to complete its operational build out and fully meet any outstanding rules for which it receives a waiver or modification by the end of the mobilisation period. When notified of the new CCP’s intent to exit mobilisation, the Bank would review the de minimis limits and could lift these at the end of mobilisation, subject to the CCP proceeding to scaling or business-as-usual operations.

The Bank’s proposed approach to giving rule permissions during mobilisation

32. The key elements of the Bank’s proposed approach to using its permissions power to, modify or waive rules during mobilisation, where appropriate, are that:

• all rules in the Bank’s CCP Rulebook besides the Fundamental Rules are potentially in scope to be modified or waived;
• the giving of permissions is subject to the expectation that new CCPs will be finalising and not starting the building out of their strategies, processes, and systems during mobilisation; with that in mind, we anticipate certain rules in the Bank’s CCP Rulebook may be of most relevance;
• permissions for the purposes of mobilisation will only be given for the duration of mobilisation, which the Bank expects to last up to 12 months;
• the Bank does not expect that it is likely to give a permission where the firm has not also applied for an appropriate de minimis limit (VREQ);
• as permissions applications can only be legally made by recognised CCPs, prospective CCP should submit a ‘provisional’ permissions application containing its de minimis limits proposal;
• the Bank will provisionally assess it, and will make a decision at the point of recognition on whether to grant the application; and
• to exit mobilisation, CCPs will need to notify the Bank prior to the end of the mobilisation period and demonstrate that they have completed the build out of their capabilities and are able to comply with the unmodified version of any modified or waived rules for which they had been given permission.

33. The Bank encourages prospective CCPs to engage with the Bank prior to submission of their provisional permissions power application so that the Bank can provide early engagement on what might be appropriate The Bank expects that prospective CCPs will be advanced in their progress towards meeting their regulatory requirements at the time at which they submit their mobilisation application. All CCP rules within the Bank’s FMI Rulebook excluding the Fundamental Rules are potentially in scope for modification or waiver. The exclusion of the Fundamental Rules reflects that the Fundamental Rules are high-level and outcomes-based, and the Bank would expect to take a proportionate supervisory approach to their application during mobilisation. The Bank expects permissions applications to reflect that mobilisation is meant to provide further assurance that firms are able to meet their business-as-usual regulatory requirements, finish the build out of their capabilities, and conduct live testing. The Bank will assess permissions applications on a case-by-case basis.

34. When considering how many and what type of permissions to seek, the prospective CCP should keep in mind that it will need to be able to demonstrate that it can fully meet all rules for which it is given permission for a modification or waiver by the end of mobilisation. The prospective CCP should also bear in mind that it will need to be able to demonstrate this at the point of notifying the Bank of its intent to exit mobilisation. For example, the Bank would expect a CCP to notify the Bank at least three months in advance when mobilisation is set for 12 months.

35. One requirement for which prospective CCPs may consider seeking a modification during mobilisation is the minimum capital that they are required to hold under rule 2.1 of the Capital Part of the CCP rules.^{footnote [8]} The mobilisation period is intended to enable live testing, rather than the volume of risk or activity that a new CCP might expect during a scaling phase or business-as-usual operations and for which the regulatory minimum capital level is intended to cover. As such, the Bank expects that in most cases new CCPs should hold at least £1 million in capital during mobilisation. The Bank would take into account the prospective CCP’s winding down requirements, potential losses, and risks posed during mobilisation, which could indicate that a higher minimum capital amount is appropriate for that firm. The prospective CCP’s mobilisation plan would need to be able to demonstrate a credible plan to meet the minimum capital requirement as set out in the CCP rules by the end of mobilisation.

36. For completeness, at the point of recognition the prospective CCP will need to meet all of its regulatory requirements as set out in FSMA and the Bank’s Fundamental Rules. The prospective CCP will also need to meet its other regulatory requirements as set out in the Bank’s CCP Rulebook, except where permission has been given to the firm for a rule modification or waiver.

The Bank’s proposed approach to the mobilisation application process

37. The key elements of the mobilisation application process are that:

• the completed mobilisation application should contain sections covering the overarching mobilisation process, its provisional VREQ application and, where relevant, its provisional permissions application, as well as all supporting evidence set out in the draft SoP;
• where the prospective CCP submits an attestation of intent to apply for a VREQ to operate under de minimis limits at the time of its mobilisation application, the firm should continue to engage with the Bank and submit a provisional VREQ application detailing its de minimis limit proposal within 60 working days of the date of submission of its mobilisation application;
• the prospective CCP should submit its mobilisation application at the same time as its recognition application; and
• only recognised CCPs can legally make VREQ and permissions applications; as such, these applications will only be legally made at the point of recognition and will be considered ‘provisional’ prior to that point.

38. The mobilisation application provides a singular, streamlined application process for prospective CCPs seeking to apply for both a VREQ to operate under de minimis limits during mobilisation and permission to modify or waive particular rules. The application form, provided in the Appendix of the draft SoP, includes an introductory section on the overarching mobilisation process to ensure all pertinent information is submitted in one place, as well as sections containing the VREQ and permissions applications.

39. The Bank encourages prospective CCPs to submit their mobilisation application at the same time as their recognition application. This will enable the Bank to provisionally assess the mobilisation application alongside its assessment of the prospective CCP’s recognition application. However, as a prospective CCP cannot legally submit requirements and permissions applications pre-recognition, these applications will only be legally made at the point of recognition and will be considered ‘provisional’ prior to that point.

40. The mobilisation application should nevertheless be considered a formal application and be as near-final as possible at the point of submission. Delays to the mobilisation application process cannot extend the statutory assessment period of the recognition application (120 working days and an additional 30 working days plus any pause in the day-count if additional information is requested by the Bank) and could risk the rejection of the recognition application. The prospective CCP should confirm to the Bank when its mobilisation application is final and it expects no further revisions. This should be as early as feasible and no more than 30 working days prior to the end of the recognition application assessment window. Once recognition is granted, the mobilisation application is then legally made and will be immediately assessed. The Bank will give its decision on the recognition and mobilisation applications to the firm concurrently.

41. The prospective CCP is expected to set out any desired permissions to modify or waive particular rules, as specified above and in the draft SoP (Annex), at the time the firm submits its mobilisation and recognition applications. Where the prospective CCP is prepared to submit its de minimis limit proposal at the time of submission of its mobilisation and recognition applications, it should also submit a provisional VREQ application.

42. A prospective CCP may require additional time to determine a suitable proposal for a de minimis limit or limits after the firm has submitted the supporting evidence for its recognition and mobilisation applications and engaged with the Bank on this basis. In that case, a prospective CCP should submit an initial attestation of its intent to submit a VREQ application as part of its mobilisation application and a provisional VREQ application with a detailed de minimis limit proposal within 60 working days from that date, or earlier if feasible.

Statutory objective analysis

43. The Bank has a primary objective to protect and enhance the stability of the financial system of the UK (the Financial Stability Objective or FSO). The proposals in this SoP support the FSO by requiring the CCP to operate under de minimis limits during mobilisation, which will mitigate the risk that a new CCP might pose to financial stability during this stage by limiting the amount of activity that a new CCP can conduct while certain regulatory requirements are temporarily modified or waived. The proposals also advance the Bank’s primary financial stability objective by providing greater transparency regarding the mobilisation process, supporting the safe and efficient onboarding of new firms.

44. In addition, when considering whether to give the sought rule permission(s), the Bank will consider the impact of the proposed modification(s) or waiver(s) on the safety of the new CCP, alongside the effectiveness of the proposed de minimis limits in minimising potential activity and therefore risks. This approach advances the Bank’s financial stability objective by preventing modifications or waivers that would adversely affect the financial stability of the UK.

45. The Bank considers that its proposals advance its Secondary Innovation Objective by supporting market entry and fostering innovation in the sector. Meeting certain regulatory requirements prior to recognition without the credibility provided by a recognition decision, finishing the building out of capabilities, or conducting live testing may pose barriers to entry for new firms. By introducing a process to modify or waive certain rules where more time is required to meet these requirements, the Bank will, if necessary, be able to remove or mitigate potential barriers to entry for new firms. Removing barriers to entry can foster innovation in the sector. In addition, providing greater clarity on the Bank’s approach will make it more efficient for CCPs to plan and apply for mobilisation as part of the onboarding process for new CCPs seeking recognition.

‘Have regards’ and recommendations analysis

46. In developing these proposals, the Bank has had regard to all the matters it is required to have regard to, including the ‘have regards’ set out under the BoE Act and the recommendations to which the Financial Market Infrastructure Committee should have regard as set out in the remit letter from the Chancellor of the Exchequer to the Bank on 1 July 2025. The following factors, to which the Bank is required to have regard, were most significant in the Bank’s analysis of the proposal:

‘Have regards’

47. Proportionate costs and benefits: Mobilisation is a discretionary stage and there is no obligation on the prospective CCP to apply to enter mobilisation. As such, a new CCP that is able to fully meet all of its regulatory requirements prior to recognition and does not wish to undertake live testing may choose not to apply for mobilisation. The ability to give permissions to modify or waive certain rules during mobilisation facilitates the Bank taking a proportionate approach to regulation during this stage. Potential benefits of being able to secure a positive recognition decision include unlocking additional funding required to meet minimum capital requirements, as well as providing further assurance of the CCP’s ability to fully meet other regulatory requirements, finishing the building out of IT systems and the CCP’s capabilities, and conducting live testing. The Bank considers that these potential benefits may equal or outweigh the costs to the CCP of operating under de minimis limits during mobilisation, which does not support the volume of risk or activity that might be expected in scaling or business-as-usual operations.

48. Transparency: The proposed SoP provides transparency on the Bank’s approach to its use of its requirements and permissions powers, the types of de minimis limits it expects to consider appropriate, the types of rule permissions it might give, and the evidence and factors it will take into consideration when assessing prospective CCPs’ mobilisation applications.

49. Efficient and economic use of resources: This policy reflects an efficient use of the Bank’s resources by providing a framework within which the Bank can apply its discretion when imposing de minimis limits or giving rule permissions, while the impetus will be on CCPs to submit a compelling business case and mobilisation plan for its desired permissions and to discuss an appropriate de minimis limit with the Bank. The draft mobilisation application draws on the standard 138BA FSMA permissions application form and the Bank will concurrently be reviewing the prospective CCP’s recognition application materials.

50. Recognition of business differences: Retaining a substantial degree of flexibility in what the Bank considers to be an appropriate de minimis limit. This enables the Bank to take into account the particular business model of the prospective CCP and to impose appropriate de minimis limits as applied for by the firm based on its particular business model, its potential scale, the market in which it would operate, and any potential specific risks. In turn, prospective CCPs will have the ability to apply for one or more rule permissions that are pertinent to their particular business requirements.

HMT remit letter recommendations

51. Protecting and upholding financial stability both in the UK and globally: The proposals require CCPs to operate under de minimis limits that constrain economic activity to levels that support live testing during mobilisation. This constraint would mitigate any potential financial stability risks posed by the firm during mobilisation, particularly in cases where prospective CCPs seek permission for the time-limited modification or waiver of one or more regulatory requirements.

52. Active facilitation of responsible innovation: The proposed approach to using the Bank’s powers to facilitate mobilisation actively supports innovation by helping to mitigate or remove potential barriers to entry for new CCPs. In particular, innovation is supported by the Bank’s proposed use of the permissions power to give certain rule modifications or waivers (for the duration of the mobilisation period and while the firm is operating under de minimis limits) for requirements that the prospective CCP might otherwise struggle to meet without the credibility of a recognition decision. Doing so supports the prospective CCP in providing further assurance that it is able to meet its business-as-usual regulatory requirements at the point of exiting mobilisation, as well as build out its capabilities and conduct live testing.

53. Role of proportionate regulation in facilitating growth: By taking a proportionate approach to regulatory requirements during mobilisation (on a temporary basis and while the CCP is operating under de minimis limits), these proposals have potential to facilitate growth by supporting the market entry of new CCPs.

54. Streamlining administrative burdens and processes: The Bank considers that providing transparency regarding its use of the requirements and permissions powers to deliver mobilisation and that offering a singular application form for both powers under the mobilisation application will help make the process of applying for mobilisation clearer and more efficient for both prospective CCPs and the Bank. In addition, metrics regarding applications will be published in line with the statutory requirements set out in the Bank’s policies on the requirements and permissions powers, supporting transparency and therefore high regulatory standards.

55. The Bank has had regard to all ‘have regards’ as required. Where analysis has not been provided against a ‘have regard’, it is because the Bank considers that ‘have regard’ is a less significant factor for these proposals.

Non-statutory CBA

56. The Bank has considered the costs and benefits of this proposal. The Bank considers that, where a prospective CCP chooses to apply for mobilisation, on balance, the benefits of supporting innovation, facilitating market access for new firms, and mitigating the potential financial stability risks during the onboarding process outweigh the potential opportunity costs to the new CCP of operating under de minimis limits for a temporary period (mobilisation) after receiving a recognition decision.

57. Furthermore, there is no requirement for the CCP to enter into mobilisation. If a prospective CCP does not need to conduct live testing, is able to fully build out its capabilities, and is able to fully meet its regulatory requirements as set out in the Bank’s CCP rulebook or via a proportionate supervisory approach, it may prefer to apply directly and only for recognition. Given the likely varied nature of prospective CCPs’ potential business models and potential growth rates, and CCPs’ desired duration of mobilisation, the opportunity costs would vary from CCP to CCP. Likewise, compliance costs for a prospective CCP will vary based on the number and type of permissions sought.

Equality and diversity

58. The Bank considers that the proposals do not have equality and diversity implications.

Annex: Draft statement of policy

• Annex: Draft statement of policy: the Bank of England’s approach to using its requirements and permissions powers to facilitate mobilisation of new CCPs

  1: Introduction

  1.1 This statement of policy (SoP) sets out the Bank of England’s (Bank’s) approach to using its requirements powers to set de minimis limits on new central counterparties’ (CCPs’) operations during mobilisation and its permissions power to give permission to waive or modify certain rules, reflecting the interlinked nature of the powers in facilitating the mobilisation of new CCPs in practice. This SoP follows on from the publication of the Bank of England’s supervisory approach to onboarding new financial market infrastructure firms (hereon the new FMI onboarding approach), which stated that the Bank would consult on and set out its approach to using the permissions power in the context of mobilisation. It is advised that any prospective CCP engage with the new FMI onboarding approach in the first instance.

  1.2 Mobilisation is a discretionary stage for a prospective CCP that occurs after recognition. During mobilisation, a new CCP would operate under de minimis limits and be subject to proportionate regulatory oversight. Mobilisation can provide an efficient way for prospective CCPs to provide further assurance that they are able to meet their business-as-usual regulatory requirements, build out their capabilities, and facilitate live testing with de minimis amounts of business. Mobilisation is not the stage at which prospective CCPs should commence the building out of their business strategies, processes, and systems, but instead provides firms additional time to deliver these elements while being subject to de minimis limits.

  1.3 A prospective CCP should anticipate that the levels of activity allowed during mobilisation would be correspondingly minimal, enabling live testing rather than the volume of activity or risk that the firm might expect during a scaling stage or business-as-usual operations. The prospective CCP will need to complete its operational build out and fully meet any outstanding rules for which it receives a modification or waiver by the end of the mobilisation period. At that point, the Bank would review and could lift the de minimis limits, subject to the CCP proceeding to scaling or business-as-usual operations.

  1.4 The precise form of any de minimis limits will be determined on a case-by-case basis and will reflect engagement between the prospective CCP and the Bank. As an example, the Bank expects that these de minimis limits could include, non-exhaustively, limits on different aspects of the prospective CCP’s business, such as the scope and volume of clearing activity, CCP membership, and loss and/or risk metrics.^{footnote [9]} For example, a prospective CCP might consider applying for limits on initial margin or notional, taking into account the size of relevant contracts, per a set number of clearing members. A prospective CCP should engage with the Bank as early as possible to discuss the appropriate size and types of de minimis limits for its particular firm.

  1.5 This SoP is relevant to all prospective UK CCPs seeking recognition by the Bank.

  1.6 Entities seeking recognition as a CCP in the UK should engage with the new FMI onboarding approach and make contact with the Bank^{footnote [10]} in the first instance. The nature of this engagement will depend on the complexity and scale of the proposed application, and the firm’s readiness to submit a formal application. The Bank encourages early engagement by prospective CCPs that are considering submitting an application to enter a mobilisation period, particularly if the firm is seeking to modify or waive any rules as part of its application. The permissions power would be used where an amendment to a specific rule or rules is sought, but in general the Bank would expect to take a proportionate approach to supervisory expectations during mobilisation.

  1.7 To enter mobilisation, a prospective CCP should submit a mobilisation application. This should include the prospective CCP’s provisional application for a voluntary requirement (VREQ) to operate under de minimis limits and, where appropriate, a provisional permissions application to modify or waive certain specified rules. In practice, the Bank expects this to be done as part of one mobilisation application to be submitted alongside the prospective CCP’s recognition application (Sections 2 and 3). The Bank expects that it would likely not give any mobilisation-related permissions to a prospective CCP where that firm has not also applied for a VREQ requiring the firm to conduct activity under appropriate de minimis limits.

  1.8 Under the Financial Services and Markets Act 2000 (FSMA), only recognised CCPs may apply for a VREQ or permission to modify or waive rules. As such, the VREQ and permissions applications will only be legally made once recognition is granted. While the Bank will consider VREQ and permissions applications to be ‘provisional’ between being submitted to the Bank and being legally submitted at the point of recognition, the Bank expects mobilisation applications to be final or near-final at the point of submission. There may be scope to revise the provisional VREQ or permissions applications prior to their being legally made if required during the Bank’s assessment or by a change in the prospective CCP’s circumstances. The Bank will provisionally assess the mobilisation application materials in conjunction with the prospective CCP’s recognition application in order to give a decision on the mobilisation application immediately upon recognition.

  1.9 The Bank’s approach to assessing applications to operate under de minimis limits reflects the SoP on The Bank of England’s approach to statutory notice decisions for use of its requirements powers. The requirements powers are a supervisory tool that allow the Bank to require an entity to take an action or refrain from taking a specified action. The requirements powers can be voluntary in nature, where an entity makes an application (a VREQ) to the Bank for a requirement to be imposed, varied or cancelled. The Bank can also impose, vary, or cancel a requirement on its own initiative (an OIREQ). When imposing, varying, or cancelling requirements on the basis of an application by the CCP, the Bank would exercise its powers under section 55L(5) (s55L(5)) of FSMA, as applied by paragraph 9B(7) of Schedule 17A to that Act.

  1.10 The Bank is required to publish details about Decision Notices relating to a VREQ application refusal as it considers appropriate, unless the Bank considers it would be unfair to the entities concerned or detrimental to the stability of the UK financial system to do so. In addition, subject to restrictions on the disclosure of confidential information, the Bank retains its discretion to publish information about a VREQ application that it has accepted. The Bank would consider the extent to which publication would advance its financial stability objective, the principle that the Bank should exercise its functions as transparently as possible, and the impact on the entity concerned.

  1.11 The Bank’s approach to giving permission to modify or waive certain rules reflects the draft SoP on The Bank of England’s approach to rule permissions and waivers. The permissions power applies to the Bank’s rules, which for CCPs are set out in the Bank of England’s FMI Rulebook (hereon the Bank’s CCP Rulebook). This SoP on the Bank’s approach to using its powers to facilitate CCP mobilisation is a subject-specific SoP for the purposes set out in the Bank’s approach to rule permissions and waivers. This means the Bank expects to follow the assessment criteria set out in this subject-specific SoP.

  1.12 The Bank expects all rules set out within the Bank’s CCP Rulebook to fall within the scope of eligible rule permissions during mobilisation for CCPs, excluding the Fundamental Rules, which are high-level, outcomes-based principles that the Bank expects to apply proportionately during mobilisation. Should a CCP wish to modify or waive a rule outside the scope of this subject-specific SoP, the general approach to rule permissions would apply. In that case, applications would be assessed against the statutory criteria under the general modification and waiver power (section 138A of FSMA, as applied and modified by paragraph 10(1)(b) of Schedule 17A to FSMA).

  1.13 Where relevant, this SoP also sets out the Bank’s approach for variations to those permissions, and circumstances in which the Bank may take the decision to revoke a permission. When giving, varying or revoking these permissions, the Bank would exercise its powers under section 138BA (s138BA) of FSMA, as applied by paragraph 10 of Schedule 17A to that Act.

  1.14 The Bank is required to publish details of permissions that have been approved, unless it considers that it would be inappropriate or unnecessary to do so. In addition, in line with the SoP on the Bank’s approach to rule permissions and waivers, the Bank will publish information on how long it takes to make decisions on permissions applications.

  1.15 This SoP should also be read in conjunction with Chapter 3 of the SoP on the Bank of England’s approach to supervisory processes (model changes, recognition orders and variations of recognition orders) and margin permissions, for further detail on the Bank’s approach to recognition applications.

  2: Application for mobilisation, including for voluntary requirements to operate under de minimis limits and permission to modify or waive certain rules

  2.1 A prospective CCP that wishes to take advantage of a mobilisation period should submit a mobilisation application to the Bank and should submit this alongside their formal application for recognition. The mobilisation application (Appendix) should include a provisional VREQ application to operate under de minimis limits and, where appropriate, a provisional permissions application to modify or waive certain rules during the mobilisation period. This must be in writing and consist of a completed application form (as set out in the Appendix) and supporting evidence.

  2.2 The prospective CCP should engage with the Bank as early as possible ahead of submitting its mobilisation application to discuss appropriate de minimis limits. Where the prospective CCP has identified a suitable, detailed de minimis limit(s) ahead of submission, it should include this proposal in the provisional VREQ application section of its mobilisation application. Otherwise, the prospective CCP should select the checkbox indicating that, within 60 working days of the date on which the mobilisation application is submitted, the firm will submit a provisional VREQ application containing a suitable, detailed de minimis limit(s) proposal that reflects any further engagement with the Bank.

  2.3 When submitting its provisional VREQ application, the prospective CCP should include the details of its desired ‘requirement’, namely its de minimis limit(s) proposal. The proposal should set out how the de minimis limit(s) would constrain the volume of risk or activity to a minimal level that the new CCP would be able to undertake to levels suitable for live testing purposes. The application should also indicate whether the prospective CCP has engaged with the Bank regarding the proposed de minimis limit(s) and briefly summarise any engagement. Prospective CCPs should bear in mind that, while the Bank will engage with the firm on potentially appropriate de minimis limits, the Bank will take a final decision on the proposed limits based on the merits of the application and will retain its discretion to reject unsuitable applications.

  2.4 If the prospective CCP is seeking permission to modify or waive any rules, it should engage with the Bank as early as possible ahead of submitting its mobilisation application. Discussing the appropriateness of the desired rule permission(s) with the Bank in advance will help make the application process as efficient as possible for both the prospective CCP and the Bank. The provisional permissions application in the relevant section of the mobilisation application should identify the specific rules for which the prospective CCP is seeking a modification or waiver. When deciding how many and what type of rule permission(s) it might require, the prospective CCP should take into consideration the purpose of mobilisation, including to provide further assurance that it is able to meet its business-as-usual regulatory requirements, build out its capabilities, and conduct live testing with de minimis amounts of business.

  2.5 In practice, the Bank expects that prospective CCPs might seek to modify or waive one or more of the following rules within the CCP rules in the Bank’s CCP Rulebook during mobilisation:

  • Minimum capital requirements, as set out in rule 2.1 of the Capital Part.
  • Skin in the game and second skin in the game requirements, as set out in rule 2.4 of the Default Waterfall Part.
  • Independent board member appointments, as set out in rule 12.2 of the Management and Governance Part.
  • External risk committee appointments, as set out in rule 13.1(1) of the Management and Governance Part.
  • Recovery time objective (RTO) for all critical functions of less than or equal to two hours, as set out in rule 3.2(4) of the Business Continuity Part.
  • Secondary processing site with identical capacity, as set out in rule 5.2 of the Business Continuity Part.
  • Full-scale disaster-recovery (DR) tests including external parties and live site switchover, as set out in rule 6.2 of the Business Continuity Part.

  2.6 In addition to the specific rules set out in paragraph 2.5, the Bank acknowledges that rules within other Parts of the Bank’s CCP Rulebook might be relevant to a prospective CCP’s particular business model and application. The Bank anticipates that these might in particular include certain rules within the Operational Resilience Part, Business Continuity Part, Margin Requirements Part, and the Notification of Third-Party Arrangements and Operational Incident Reporting Rules (hereon IOREP reporting rules).

  2.7 The Bank does not consider the Fundamental Rules to fall within the scope of this policy but, as part of its general supervisory approach, the Bank expects to take a proportionate approach to the application of these rules during mobilisation.

  2.8 When deciding which rule permission(s) to seek, prospective CCPs should take into account the desired duration of the mobilisation period and that the firm should be able to demonstrate that it can fully meet the unmodified version of any modified or waived rules by the end of the agreed mobilisation period. The mobilisation application includes an attestation that the prospective CCP understands the purpose of mobilisation.

  2.9 The mobilisation application should set out the duration of the mobilisation period desired by the prospective CCP. The Bank expects that the mobilisation period would likely last for up to 12 months. As such, a prospective CCP should only submit a mobilisation application once it has developed near-final processes and reasonably expects that it will be able to fully meet any modified or waived rules by the time it intends to exit mobilisation. A prospective CCP may request a shorter mobilisation period, provided that it will be able to demonstrate that it will complete its build out and fully meet any modified or waived rules by the end of that period.

  3: Supporting evidence regarding the criteria for permissions and voluntary requirements

  3.1 Where a prospective CCP seeks permission to modify or waive one or more of the rules set out under this SoP, the supporting evidence should be sufficiently detailed. This should allow the Bank to confirm the prospective CCP could operate during the mobilisation period without posing a risk to financial stability and to assess whether the prospective CCP’s mobilisation plan will enable it to fully meet these regulatory requirements by the end of the mobilisation period.

  3.2 The supporting evidence should, at a minimum, include the following:

  • General mobilisation application supporting evidence:
    • A mobilisation plan setting out how the prospective CCP plans to finish the build out of its capabilities and fully comply with any modified or waived rules by the end of its desired mobilisation period, including target dates and key dependencies.
    • Key governance documents demonstrating board sign-off on the mobilisation plan.
  • VREQ application supporting evidence:
    • Rationale for the proposed de minimis limit’s (or limits’) ability to constrain volumes of risk or activity to a minimal level that would support live testing, taking into account the particular business model of and risks posed by the prospective CCP.
  • Permissions application supporting evidence:
    • A business case setting out the justification for the proposed rule modifications or waivers, taking into consideration the purpose of mobilisation as set out in the new FMI onboarding approach and setting out why the prospective CCP cannot meet these requirements at the point of recognition without a modification or waiver.
    • Where relevant, a self-assessment by the prospective CCP setting out the extent to which it has already complied with or made progress towards compliance with the rules for which it is seeking a modification or waiver. This self-assessment should include reasoning and evidence necessary to demonstrate compliance (ie not just an assertion of compliance).

  3.3 The Bank may subsequently request additional evidence to inform its assessment of a prospective CCP’s application.

  4: Assessment of the mobilisation application

  4.1 The Bank will provisionally assess the appropriateness of the de minimis limits proposed under the provisional VREQ application section of the mobilisation application. If the Bank finds the proposed de minimis limits to be inappropriate or insufficient, the Bank may reject the VREQ application and the prospective CCP will need to resubmit. The Bank expects that it would likely not grant any mobilisation-related modifications or waivers (permissions) to a prospective CCP where that firm has not also successfully applied for a VREQ requiring the firm to operate under appropriate de minimis limits. The Bank therefore encourages prospective CCPs to engage with the Bank on appropriate de minimis limits as early as possible, including in advance of submitting its mobilisation application.

  4.2 Where the Bank receives an application for permission to modify or waive one or more of the rules set out in paragraphs 2.5 and 2.6, and it decides to give permission, the Bank will, depending on the application received, permit the arrangement, which may be subject to conditions.

  4.3 Such conditions may include setting a defined timeline (aligning with the desired duration of the mobilisation period, usually 12 months or less) and the process through which the transition to full compliance with the relevant regulatory requirements takes place, which may include intermediate steps and checkpoints.

  4.4 Where the Bank gives permission for the modification or waiver of one or more of the rules set out in paragraph 2.5, the decision of the Bank will specify whether the permission given is that sought by the prospective CCP or whether a different permission has been given, such as a rule modification in lieu of a requested rule waiver, or a different rule modification than the one sought.

  Factors the Bank will consider

  4.5 The Bank will consider whether the levels of activity allowed by the proposed de minimis limit or limits is sufficient to allow live testing but would not allow the volume of risk or activity that a CCP might expect during scaling or business-as-usual operations. As relevant, the Bank will take into account the particular business model of and risks posed by the prospective CCP in its assessment.

  4.6 The Bank will consider whether the prospective CCP has viable plans to complete the build out of its capabilities. The Bank will also consider whether the firm has sufficient capital to meet its operational funding needs throughout the duration of its mobilisation period.

  4.7 Where rule permissions are sought, the Bank will base its decision on whether to give a permission or variation of permission on an assessment of the information provided. This includes whether the evidence demonstrates that the prospective CCP can reasonably expect to fully comply with the unmodified version of any modified or waived rules by the end of the mobilisation period. The Bank will also consider whether any concerns regarding particular regulatory requirements could instead be addressed within the Bank’s proportionate supervisory approach.

  4.8 The Bank expects that mobilisation would last up to 12 months. In its assessment, the Bank will take into account the number and types of rule permissions sought and the desired duration of mobilisation. The Bank will then consider the feasibility of the prospective CCP’s mobilisation plan to fully implement the unmodified version of any modified or waived rules by the end of the mobilisation period.

  4.9 Where permissions are sought, the Bank will consider whether the prospective CCP has concurrently applied for a VREQ to operate under de minimis limits. The Bank expects that it would likely not grant any mobilisation-related permissions to a firm where that firm has not also applied for a VREQ requiring the firm to operate under appropriate de minimis limits that allow for minimal amounts of economic activity in support of live testing.

  4.10 The Bank will consider the impact of the proposed rule modifications or waivers on the safety of the prospective CCP and on financial stability more broadly. This includes whether the de minimis limits proposed by the prospective CCP are sufficient to mitigate any potential risk that a rule modification or waiver might pose.

  4.11 In relation to the specific rule modifications or waivers for which the prospective CCP is seeking permission, the Bank will, in the cases set out in paragraph 2.5 above and as relevant, consider the following:

  • Whether the prospective CCP, in most cases, holds at least £1 million in capital at the time of its mobilisation application, and whether it has a viable plan to fully meet its minimum capital requirement of £6.1 million by the end of mobilisation (rule 2.1 of the Capital Part).
  • Whether the prospective CCP has a viable plan in place to meet its skin in the game (SITG) and second skin in the game (SSITG) requirements by the end of mobilisation^{footnote [11]} (rule 2.4 of the Default Waterfall Part).
  • Whether the prospective CCP has set out in its mobilisation plan credible plans to make independent board member appointments by the end of mobilisation (rule 12.2 of the Management and Governance Part).
  • Whether the prospective CCP has made, or has set out in its mobilisation plan, credible plans to make external risk committee appointments by the end of mobilisation (rule 13.1(1) of the Management and Governance Part).
  • Whether the prospective CCP has set out in its mobilisation plan how it will achieve a maximum RTO for all critical functions of less than or equal to two hours (rule 3.2(4) of the Business Continuity Part).
  • Whether the prospective CCP has set out in its mobilisation plan credible plans to increase the capacity at an existing secondary processing site or to have in place by the end of mobilisation a secondary processing site with identical capacity (rule 5.2 of the Business Continuity Part).
  • Whether the prospective CCP has set out in its mobilisation plan how its DR tests will include external parties and live site switchover by the end of mobilisation (rule 6.2 of the Business Continuity Part).

  4.12 The Bank will assess the CCP’s mobilisation plan for rule permissions not specified above on an equivalent basis as in paragraph 4.11, eg, the prospective CCP’s plans to meet the unmodified version of the relevant rule(s) as set out in the Bank’s CCP Rulebook.

  Mobilisation application timelines

  4.13 The Bank will confirm receipt of the mobilisation application of the prospective CCP.

  4.14 The Bank will assess the completeness of the application and evaluate the information provided. An application will be considered complete by the Bank if the application covers all the matters set out in the sections ‘Application for mobilisation, including for voluntary requirements to operate under de minimis limits and permission to modify or waive certain rules’ and ‘Supporting evidence regarding the criteria for permissions and voluntary requirements’, and it contains sections setting out the provisional VREQ and permissions applications.

  4.15 While the mobilisation application should be as near-final as possible at the point of submission, prospective CCPs may be able to make further revisions, following engagement with the Bank or a change in the prospective CCP’s circumstances, prior to the application being legally made. Significant revisions should be limited, but if necessary should be made as early as possible as delays to the mobilisation assessment could impact the Bank’s assessment of the prospective CCP’s recognition application. Accordingly, the Bank expects that any revisions should be made at least 30 working days before the end of the recognition application assessment window. The prospective CCP should confirm when the application is final and no further changes will be made.

  4.16 Where a prospective CCP initially submits an attestation of its intent to subsequently submit a provisional VREQ application containing a detailed de minimis limit proposal, the prospective CCP should submit its provisional VREQ application containing the detailed de minimis limit proposal, reflecting interim discussions with the Bank, within no more than 60 working days from the date of submission of the mobilisation application.

  Figure 1: Possible paths through the CCP mobilisation application process

  

  4.17 The Bank will provisionally assess the mobilisation application materials in conjunction with the prospective CCP’s recognition application in order to give a decision on the mobilisation application immediately upon recognition. The Bank expects to determine the outcome of the recognition application within 120 working days, unless there are exceptional circumstances, which the Bank will aim to communicate in writing to the prospective CCP on a timely basis. The VREQ and permissions application sections of the mobilisation application will be legally made at the point of recognition and, having been provisionally assessed concurrently with the recognition application, a decision on these applications will then be taken immediately.

  4.18 Early engagement with the Bank to ensure the Bank has all the information it needs to assess the mobilisation applications is crucial. Following submission of the mobilisation application, the Bank may request additional information to determine the application. Should the Bank need further information, the Bank will specify the additional information requested and the reasons for the request. Failure to provide the requested information may result in the Bank being unable to grant the mobilisation application and, consequently, not granting the recognition application if the prospective CCP would otherwise be unable to fully comply with the Bank’s rules.

  4.19 If additional information is requested for the Bank’s assessment of the prospective CCP’s recognition application, the day-count will pause on the mobilisation application assessment as well until the requested information has been received, and an extra 30 working days will be added to the deadline for both assessments. Any subsequent requests for information will not affect the deadline.

  4.20 The Bank will publish information on how long it takes to make decisions on permissions applications.

  5: Decision on the application

  5.1 Upon the mobilisation application being legally made (ie, at the point of recognition, where the Bank has granted the recognition application), the Bank will take an immediate decision, having provisionally assessed the prospective CCP’s mobilisation application materials alongside its recognition application. When the Bank has reached a decision on a mobilisation application, it will communicate this in writing to the prospective CCP.

  5.2 Where the Bank approves an arrangement subject to certain conditions, or rejects an application for permission, it will state the reasons on which the decision is based. The Bank’s decision to give permission to modify or waive certain rules will likely be conditional on the prospective CCP’s having concurrently and successfully applied for a VREQ to operate under de minimis limits during the mobilisation period. A decision on these applications will be taken immediately upon recognition.

  5.3 The prospective CCP should not publicly disclose information on its mobilisation application prior to the outcome of the decision by the Bank.

  6: Varying or revoking a permission

  6.1 Where the rule modification or waiver no longer fulfils the conditions under which the permission for the arrangement was given, or the CCP does not expect to fully meet the rules for which it had received permission for a modification or waiver by the end of mobilisation, the CCP should notify the Bank. The Bank will decide on either of the following actions:

  • to introduce new conditions or amend any conditions that the permission is subject to; or
  • to revoke its permission for the rule modification or waiver.

  6.2 The Bank will notify the CCP immediately, stating the reasons, where it has decided in accordance with the previous paragraph. Where the CCP is aware of a change in circumstance whereby the rule modification or waiver, in accordance with the above, may no longer fulfil the conditions under which the permission for the arrangement was given, it should inform the Bank of this change in circumstance.

  7: Exiting mobilisation

  7.1 To exit mobilisation, the CCP will need to demonstrate that it has completed the build out of its capabilities and is able to comply with the unmodified version of any modified or waived rules as set out in the FMI Rulebook. The CCP should inform the Bank that it is ready to exit mobilisation as soon as possible and, where mobilisation is set for 12 months, at least three months in advance. To exit mobilisation, the CCP should apply to cancel its VREQ and revoke any permissions. In accordance with the new FMI onboarding approach, the CCP may then move into a discretionary scaling stage, with possible limits or restrictions, or into business-as-usual operations.

  7.2 If a CCP considers it might require an extension to mobilisation in order to fully meet one or more of the rules that had been waived or modified during mobilisation, it should engage with the Bank as early as possible during the mobilisation period and at least three months before the end of mobilisation. The Bank might consider an extension to mobilisation under exceptional circumstances. Any extension must be agreed in advance of the initial mobilisation deadline.

  7.3 If a CCP is unable to demonstrate that it has fully met the unmodified versions of all of the rules for which it had received permission by the end of the mobilisation period, the CCP may be unable to exit mobilisation and enter into scaling or business-as-usual operations. Failure by the CCP to fully meet any of its outstanding regulatory requirements by the end of the mobilisation period, including any extension, could result in the CCP failing to satisfy its regulatory requirements, in which case the Bank may revoke the CCP’s recognition order. As above, the CCP should engage with the Bank as early as possible regarding any concerns.

• Appendix: Draft mobilisation application form for CCPs

  Appendix: Draft mobilisation application form for CCPs