Does EU Regulation Adequately Address the Tension between CCPs Shareholders’ and Clearing Members’ Incentives?

IF 1.3 Q1 LAW

European Company and Financial Law Review Pub Date : 2024-02-26 DOI:10.1515/ecfr-2023-0038

Anastasia Sotiropoulou

{"title":"Does EU Regulation Adequately Address the Tension between CCPs Shareholders’ and Clearing Members’ Incentives?","authors":"Anastasia Sotiropoulou","doi":"10.1515/ecfr-2023-0038","DOIUrl":null,"url":null,"abstract":"964The current EU regulatory regime of Central Counterparties (CCPs) falls short of addressing adequately the potential misalignment of incentives of CCPs’ shareholders on the one hand and clearing members on the other hand.Thus, according to the European Market Infrastructure Regulation (EMIR), while clearing members contribute substantially to the default waterfall of a CCP, they do not enjoy substantial governance rights: they merely participate in the risk committee of the CCP, whose role is only advisory.By contrast, although shareholders are vested with substantial governance rights, such as the right to appoint the members of the board which sets the CCP’s risk profile, they do not bear final losses first, as in ordinary companies: the shareholders’ contribution to a CCP’s default waterfall is limited and, in case the CCP enters resolution, they only bear losses, in principle, after the clearing members.It is however clear that when the owners of a firm are not the ones bearing the risks first, the firm may be inclined to excessive risk-taking. The objective of this article is therefore to discuss a number of ways to improve the corporate governance of CCPs, in particular the incentive setting for shareholders.965","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":1.3000,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"European Company and Financial Law Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1515/ecfr-2023-0038","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"LAW","Score":null,"Total":0}

引用次数: 0

Abstract

964The current EU regulatory regime of Central Counterparties (CCPs) falls short of addressing adequately the potential misalignment of incentives of CCPs’ shareholders on the one hand and clearing members on the other hand.Thus, according to the European Market Infrastructure Regulation (EMIR), while clearing members contribute substantially to the default waterfall of a CCP, they do not enjoy substantial governance rights: they merely participate in the risk committee of the CCP, whose role is only advisory.By contrast, although shareholders are vested with substantial governance rights, such as the right to appoint the members of the board which sets the CCP’s risk profile, they do not bear final losses first, as in ordinary companies: the shareholders’ contribution to a CCP’s default waterfall is limited and, in case the CCP enters resolution, they only bear losses, in principle, after the clearing members.It is however clear that when the owners of a firm are not the ones bearing the risks first, the firm may be inclined to excessive risk-taking. The objective of this article is therefore to discuss a number of ways to improve the corporate governance of CCPs, in particular the incentive setting for shareholders.965

查看原文本刊更多论文

欧盟法规是否充分解决了 CCP 股东与清算会员激励之间的矛盾？

因此，根据《欧洲市场基础设施条例》（EMIR），虽然清算会员对中央交易对手（CCP）的违约瀑布有很大贡献，但他们并不享有实质性的治理权利：他们只是参与中央交易对手（CCP）的风险委员会，而该委员会的作用只是咨询。相比之下，虽然股东享有实质性治理权，例如有权任命董事会成员，以制定中央交易对手系统的风险状况，但他们并不像普通公司那样首先承担最终损失：股东对中央交易对手系统违约瀑布的贡献有限，如果中央交易对手系统进入决议程序，原则上他们只在清算成员之后承担损失。因此，本文旨在讨论改善中央交易对手系统公司治理的若干方法，尤其是股东激励机制。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

European Company and Financial Law Review LAW-

CiteScore

1.00

自引率

16.70%

发文量

期刊介绍： In legislation and in case law, European law has become a steadily more dominant factor in determining national European company laws. The “European Company”, the forthcoming “European Private Company” as well as the Regulation on the Application of International Financial Reporting Standards (“IFRS Regulation”) have accelerated this development even more. The discussion, however, is still mired in individual nations. This is true for the academic field and – even still – for many practitioners. The journal intends to overcome this handicap by sparking a debate across Europe on drafting and application of European company law. It integrates the European company law component previously published as part of the Zeitschrift für Unternehmens- und Gesellschaftsrecht (ZGR), on of the leading German law reviews specialized in the field of company and capital market law. It aims at universities, law makers on both the European and national levels, courts, lawyers, banks and other financial service institutions, in house counsels, accountants and notaries who draft or work with European company law. The journal focuses on all areas of European company law and the financing of companies and business entities. This includes the law of capital markets as well as the law of accounting and auditing and company law related issues of insolvency law. Finally it serves as a platform for the discussion of theoretical questions such as the economic analysis of company law. It consists of articles and case notes on both decisions of the European courts as well as of national courts insofar as they have implications on European company law.