Schedule 11: Central counterparties Part 5 – Special resolution action Power to reduce variation margin payments
Paragraph 33 sets out the sixth stabilisation option (power to cancel or reduce variation margin payments). This power allows the Bank to cancel or reduce a variation margin payment (as defined in sub-paragraph (5)) that a CCP would have otherwise paid to a clearing member.
	Sub-paragraph (3) specifies that this power can only be used to recover losses incurred as a result of a clearing member defaulting and will not apply to the clearing members outlined in sub-paragraph (4).