Prudential Regulation Authority Rulebook

16.1

This Chapter applies if a ring-fenced body accesses the services of:

1. (1) a central counterparty whether as a clearing member or otherwise; or
2. (2) a central securities depository whether as a participant or otherwise.

16.2

In this Chapter:

1. (1) the definitions of central counterparty and clearing member apply for the purposes of this Chapter whether or not the central counterparty or clearing member is regulated by Regulation (EU) No. 648/2012, or is established in an EEA state or elsewhere; and
2. (2) the definitions of central securities depository and participant apply for the purposes of this Chapter whether or not the central securities depository or participant is regulated by Regulation (EU) No. 909/2014, or is established in an EEA state or elsewhere.

16.3

For the purposes of this Chapter, if a ring-fenced body accesses the services of a central counterparty or a central securities depository not established in an EEA state or any part of whose operations are not subject to the law of an EEA state, the ring-fenced body will be considered to comply with the rules in this Chapter if it has taken necessary steps to ensure that its positions, if applicable, and assets are identifiable separately from the positions, if applicable, and assets of any other person by measures that deliver outcomes comparable to those set out in the rules in this Chapter.

16.4

If a ring-fenced body accesses the services of a central counterparty as a clearing member, it must ensure the positions and assets held for its account are distinguished in accounts at the central counterparty from the positions and assets held for the account of any other clearing member and of the central counterparty.

16.5

If a ring-fenced body accesses the services of a central counterparty through a clearing member, it must ensure the positions and assets held for its account are distinguished:

1. (1) in accounts at the central counterparty from the positions and assets held for the account of the clearing member and either:
1. (a) the positions and assets held for the account of the ring-fenced body are distinguished in accounts at the central counterparty from the positions and assets held for the account of all other clients of that clearing member; or
2. (b) the value of assets required by the central counterparty as margin to cover the positions held for the account of all clients of that clearing member including the ring-fenced body within the account at the central counterparty is calculated on a gross basis, such that the value is at least equal to the sum of the margin amounts that would be required by the central counterparty for each individual client within that account if each individual client were a clearing member; and
2. (2) in accounts at the clearing member from the positions and assets held for the account of the clearing member’s other clients and of the clearing member.

16.6

If a ring-fenced body accesses the services of a central securities depository as a participant, it must ensure any assets held for its account at the central securities depository are distinguished in accounts at the central securities depository from the assets held for the account of any other participant and of the central securities depository.

16.7

If a ring-fenced body accesses the services of a central securities depository through a participant, it must ensure any assets held for its account are distinguished:

1. (1) in accounts at the central securities depository from the assets held for the account of the participant and of all other clients of that participant; and
2. (2) in accounts at the participant from the assets held for the account of the participant’s other clients and of the participant.