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upon a default of the clearing member, the assets would be exposed to losses connected to the
client account in which the assets were recorded and could no longer be used to meet any losses
on the defaulted clearing member’s house account(s).
(g) Article 39(2) of EMIR requires CCPs to offer to keep separate records and accounts (in the plural)
enabling each clearing member to distinguish in accounts (in the plural) with the CCP the assets
and positions of the clearing member from those held for the account of its clients (‘omnibus
client segregation’). Article 39(3) of EMIR requires that upon request CCPs shall offer clearing
members the possibility to open more accounts in their own name or for the account of their
clients. CCPs are therefore expected to offer clearing members the possibility to open more
than one omnibus client account, when requested to do so.
(h) Article 3(1) of RTS 149/2013 (RTS on OTC derivatives) requires a CCP to set up, on the request
of a clearing member, accounts to enable the assets and positions of the client to be recorded
separately from the assets and positions of the indirect clients of the client. Accordingly, at the
request of a clearing member, the CCP must, at a minimum, set up an omnibus segregated
account in which only the positions and assets of the indirect clients of a client may be recorded.
The CCP may also, at the request of a clearing member, set up individually segregated accounts
in which the positions and assets of indirect clients of a client may be recorded, but there is no
obligation to do so.
(i) Under Article 39(5), clearing members must offer their clients, at least, the choice between om-
nibus client segregation and individual client segregation and inform them of the costs and level
of protection associated with each option. The references to clearing members in Article 39 are
not limited to EU clearing members, so all clearing members of EU CCPs are required to com-
ply. Similarly, the references to clients in Article 39 are not limited to EU clients. CCPs are ex-
pected to require all clearing members to comply with the relevant EMIR provisions through their
rules.
In the case that a third country insolvency regime applicable to a clearing member could interfere
with the provision of omnibus client segregation or individual client segregation, including intrin-
sic client protections, in the manner set out in Articles 39 and 48, the clearing member should
offer its clients alternative possibilities that ensure those clients receive, at least, the choice of
omnibus client segregation and individual client segregation. Alternative possibilities may in-
clude clearing solutions provided by an affiliate or other clearing member of the CCP.
When, notwithstanding the alternatives offered, the client chooses to use the third country clear-
ing member and risks remain due to the third country insolvency regime, the clearing member
must disclose those risks in full to the client at the outset of the relationship, in accordance with
both Articles 39(5) and 39(7)).
(j) No but EU clearing members will only be allowed to be a clearing members of a non-EU CCP
which has been recognised as meeting equivalent requirements to EMIR under the process set
out in Article 25. This will include an assessment of the CCP’s segregation arrangements.
(k) Where a client that has opted for individual client segregation provides a clearing member with
additional margin which is not eligible collateral at the CCP, then the clearing member does not
have an obligation to transform such additional margin into eligible collateral. The CCP has no
obligation to accommodate this collateral however the clearing member should pass such addi-
tional margin to the CCP if the latter has the operational and technical means to receive it. How-
ever, under no circumstances would such additional margin be eligible to meet margin calls
made by the CCP.