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<p>UK legislation requires central counterparties (CCPs) to develop recovery plans
and to have ‘loss allocation’ rules, in order to allocate any losses sustained by
the CCP either following the default of a clearing member or due to certain non-default
events, so that the CCP can continue to provide its critical functions.</p><p> </p><p>The
Government has also broadened the scope of the UK’s Special Resolution Regime to cover
CCPs. When certain conditions are met, this allows the Bank of England to intervene
by transferring all or some of the business of a CCP to either a private sector purchaser
or to a bridge CCP owned by the Bank of England, or to transfer ownership of the CCP
to any person.</p><p> </p><p>Qualifying changes of control of CCPs are assessed by
the Bank of England and I refer the noble Lord to my written answer <a href="http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2016-03-17/HL7153/"
target="_blank">HL7153</a> of 1 April 2016.</p><p> </p>
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