European Securities and Markets Authority launches sixth CCP stress test covering 16 central counterparties and adds first recovery and resolution component

The European Securities and Markets Authority has launched its sixth stress test exercise for central counterparties under the European Market Infrastructure Regulation, using an adverse market scenario provided by the European Systemic Risk Board. The exercise is intended to test the resilience of CCPs to adverse market developments, identify potential shortcomings and assess the aggregate effect of CCP recovery and resolution arrangements on Union financial stability. It covers 16 CCPs, including all authorised EU CCPs and two UK-based Tier 2 CCPs. This year’s framework expands the analytical scope through four components: a credit stress test, concentration risk analysis, reverse stress testing and, for the first time, a recovery and resolution component. ESMA has paused the liquidity risk assessment for this round. The new recovery and resolution workstream will examine the aggregate impact on stakeholders from the activation of CCP recovery and resolution tools, while the broader exercise also includes methodological enhancements such as additional theoretical market stress scenarios and exploratory analysis of sponsored clearing arrangements and client account porting. ESMA will launch the data request at the beginning of May, followed by joint validation with National Competent Authorities, analysis and computation of results, and preparation of the final report. Final outcomes are planned for the first quarter of 2027.