Chapter IV, Article 25, Paragraph 1. · Commission Delegated Regulation (EU) 2017/589

Contents

1.A clearing firm shall make an initial assessment of a prospective clearing client, taking into account the nature, scale and complexity of the prospective clearing client's business. Each prospective clearing client shall be assessed against the following criteria:

(a)credit strength, including any guarantees given;

(b)internal risk control systems;

(c)intended trading strategy;

(d)payment systems and arrangements that enable the prospective clearing client to ensure a timely transfer of assets or cash as margin, as required by the clearing firm in relation to the clearing services it provides;

(e)systems settings and access to information that helps the prospective clearing client to respect any maximum trading limit agreed with the clearing firm;

(f)any collateral provided to the clearing firm by the prospective clearing client;

(g)operational resources, including technological interfaces and connectivity;

(h)any involvement of the prospective clearing client in a breach of the rules ensuring the integrity of the financial markets, including involvement in market abuse, financial crime or money laundering activities.