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In this act Article 7 of 62

Article 7 — Organisational structure and separation of the reporting lines

Financial servicesLevel 2RTSEMIRIn forceVerifiedOfficial source

7(1)

1.A CCP shall define the composition, role and responsibilities of the board and senior management and any board committees. These arrangements shall be clearly specified and well-documented. The board shall establish, at a minimum an audit committee and a remuneration committee. The risk committee established in accordance with Article 28 of Regulation (EU) No 648/2012 shall be an advisory committee to the board.

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7(2)

2.The board shall assume at least the following responsibilities:

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7(2)(a)
(a)the establishment of clear objectives and strategies for the CCP;
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7(2)(b)
(b)the effective monitoring of senior management;
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7(2)(c)
(c)the establishment of appropriate remuneration policies,
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7(2)(d)
(d)the establishment and oversight of the risk management function;
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7(2)(e)
(e)the oversight of the compliance function and internal control function;
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7(2)(f)
(f)the oversight of outsourcing arrangements;
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7(2)(g)
(g)the oversight of compliance with all provisions of this Regulation, Regulation (EU) No 648/2012, Implementing Regulation (EU) No 1249/2012 and all other regulatory and supervisory requirements;
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7(2)(h)
(h)the provision of accountability to the shareholders or owners and employees, clearing members and their customers and other relevant stakeholders.
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7(3)

3.Senior management shall have at least the following responsibilities:

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7(3)(a)
(a)ensuring consistency of the CCP’s activities with the objectives and strategy of the CCP as determined by the board;
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7(3)(b)
(b)designing and establishing compliance and internal control procedures that promote the CCP’s objectives;
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7(3)(c)
(c)subjecting the internal control procedures to regular review and testing;
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7(3)(d)
(d)ensuring that sufficient resources are devoted to risk management and compliance;
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7(3)(e)
(e)be actively involved in the risk control process;
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7(3)(f)
(f)ensuring that risks posed to the CCP by its clearing and activities linked to clearing are duly addressed.
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7(4)

4.Where the board delegates tasks to committees or sub-committees, it shall retain the approval of decisions that could have a significant impact on the risk profile of the CCP.

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7(5)

5.The arrangements by which the board and senior management operate shall include processes to identify, address and manage potential conflicts of interest of members of the board and senior management.

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7(6)

6.A CCP shall have clear and direct reporting lines between its board and senior management in order to ensure that the senior management is accountable for its performance. The reporting lines for risk management, compliance and internal audit shall be clear and separate from those for the other operations of the CCP. The chief risk officer shall report to the board either directly or through the chair of the risk committee. The chief compliance officer and the internal audit function shall report directly to the board.

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