Activities of Bernd LUCKE related to 2018/0171(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities PDF (248 KB) DOC (86 KB)
Amendments (47)
Amendment 63 #
(1) Sovereign Bond-Backed Securities (‘SBBSs’) canmight be able to address some vulnerabilities that have been exposed by or have resulted from the 2007-2008 financial crisis. More specifically, SBBSs canmight be able to help banks and other financial institutions better diversify their sovereign exposures, further weaken the bank- sovereign nexus and enhance the supply of low-risk euro denominated assets. SBBSs could in addition render bonds issued in small and less liquid national markets more attractive for international investors, which can foster private sector risk sharing and risk reduction and promote a more efficient allocation of risks among financial operators.
Amendment 67 #
Proposal for a regulation
Recital 2
Recital 2
(2) Under the existing legal framework, SBBSs would be treated as securitisations and thus be subject to additional charges and discounts relative to the charges and discounts faced by the euro area sovereign bonds in the underlying portfolio. Those additional charges and discounts would hinder the production and use of SBBSs by the private sector, despite the fact that SBBSs do not carry the risks associated with securitisations that justify such charges and discountscarry lesser risks than those associated with other types of securitisations. However, some risks such as warehouse risks or fraudulent behaviour by SPE staff prevail. SBBS should therefore be subject to a regulatory framework that better takes into account the unique features and properties of SBBSs to enable that product to emerge on the market. To that end, the removal of regulatory obstacles is necessary.
Amendment 68 #
Proposal for a regulation
Recital 2 a (new)
Recital 2 a (new)
(2a) A sufficiently large first-loss tranche outside the banking system will be key to reducing the bank-sovereign nexus. Accordingly, only the senior tranche of SBBSs should enjoy the full removal of regulatory restrictions for securitisation provided for in this Regulation.
Amendment 72 #
Proposal for a regulation
Recital 5
Recital 5
(5) To achieve the objectives of geographic risk diversification within the Banking Union and the internal market, the underlying portfolio of SBBSs should be composed of sovereign bonds of Member States whose currency is the euro. To avoid currency risks only euro- denominated sovereign bonds issued by Member States whose currency is the euro should be allowed for inclusion in the SBBSs underlying portfolio. To ensure that sovereign bonds of each euro-area Member State contribute to the production of SBBSs in line with each Member State's stake in the stability of the overall euro area, the relative weight of the national sovereign bonds in the SBBSs’ underlying portfolio should be very close to the relative weight of the respective Member States in the key for subscription by the national central banks of Member States of the European Central Bank's capital.
Amendment 74 #
Proposal for a regulation
Recital 5 a (new)
Recital 5 a (new)
(5a) Issuers of SBBS should be free to determine the relative weights of the national sovereign bonds in the SBBSs’ underlying portfolio. This is beneficial because it increases product diversity and allows issuers to tailor SBBS supply to market demand. As such it increases the likelihood that a viable market for SBBS will develop. Implementing powers should be conferred on the Commission to decide whether the size of the senior tranche of an SBBS issue whose relative weights differ significantly from Member States’ shares in the capital of the ECB should be set to a level lower than seventy percent.
Amendment 76 #
Proposal for a regulation
Recital 6
Recital 6
(6) To provide for a high quality low- risk asset and at the same time cater for investors' different levels of risk appetite, an SBBS issue should be composed of both a senior tranche and one or more subordinated tranches. The senior tranche, corresponding to at most seventy percent of the nominal value of an SBBS issue, should keep the SBBS issue expected loss rate in line with that of the safest euro area sovereign bonds, taking into account the risk and correlation of the sovereign bonds in the SBBSs underlying portfolio of sovereign bonds. The subordinated tranches should provide for protection to the senior tranche. The seniority of the tranches should determine the order in which losses on the underlying portfolio of sovereign bonds should be borne by investors. To limit the risk of the junior tranche (the tranche bearing losses before any other tranche), the nominal value of the junior tranche should however be at least 210 percent of the outstanding nominal value of the entire SBBSs issue.
Amendment 78 #
Proposal for a regulation
Recital 9
Recital 9
Amendment 80 #
Proposal for a regulation
Recital 10
Recital 10
(10) The fixedmaximum size of the senior tranche of each SBBS issue may be reduced for future SBBSs issuances where, due to adverse market developments that severely disrupt the functioning of sovereign debt markets in a Member State or in the Union, a smaller size is required to ensure continued high credit quality and low risk for the senior tranche. When such adverse market developments end, the size of the senior tranche for future SBBSs issuances should be brought back to its initial value of at most seventy percent. To ensure that SBBSs are standardised, the variation of the senior tranche should be allowed only following a decision of the Commission, ensuring that all senior tranches of SBBSs issues issued at the same time have the same size.
Amendment 81 #
Proposal for a regulation
Recital 11
Recital 11
(11) Investors should be protected as much as possible from the risk of insolvency of the institution that acquires the sovereign bonds ('original purchaser') for the purposes of assembling the SBBSs underlying portfolio. For that reason, only special purpose entities (‘SPEs’) that are exclusively devoted to the issuance and management of SBBSs and that do not undertake any other activities, such as providing credit, should be allowed to issue SBBSs. For the same reason, SPEs should be subject to strict asset segregation requirements.
Amendment 82 #
Proposal for a regulation
Recital 13
Recital 13
(13) Only the senior tranches from products that fulfil the requirements regarding the composition and maturity of the underlying portfolio as well as the size of the senior and the subordinated tranches as provided for in this Regulation should enjoy the same regulatory treatment as the regulatory treatment granted to sovereign exposures in terms of capital requirements, concentration limits, and liquidity.
Amendment 85 #
Proposal for a regulation
Recital 14
Recital 14
(14) A system of self-attestcertification by SPEsESMA should ensure that an SBBS issue complies with the requirements of this Regulation. ESMA should therefore keep a list of SBBSs issued, enabling investors to verify whether a product that is offered for sale as an SBBS is indeed an SBBS. For the same reason, ESMA should indicate in that list whether any sanction in relation to a SBBS has been imposed and remove from that list those products that are found to be in violation of this Regulation.
Amendment 87 #
Proposal for a regulation
Recital 15
Recital 15
(15) Investors should be able to rely on the nocertification of SBBSs by SPEs to ESMA and on the information provided by SPEs. Information on SBBSs and the sovereign bonds in the SBBSs underlying portfolio should empower investors to understand, assess and compare SBBSs transactions and not to rely solely on third parties, including credit rating agencies. That possibility should enable investors to act prudently and to carry out their due diligence efficiently. Information on SBBSs should therefore be freely available to investors, via standardised templates, on a website that ensures continuous accessibility.
Amendment 93 #
Proposal for a regulation
Recital 17
Recital 17
(17) Investors in different financial sectors should be able to invest in the senior tranches of SBBSs under the same conditions as they invest in the underlying euro area sovereign bonds. Directive 2009/65/EC of the European Parliament and of the Council15 , Regulation (EU) No 575/2013 of the European Parliament and of the Council16 , Directive 2009/138/EC of the European Parliament and of the Council17 and Directive (EU) 2016/2341 of the European Parliament and of the Council18 should therefore be amended to ensure that the senior tranches of SBBS are granted the same regulatory treatment as their underlying assets across the various regulated financial sectors. _________________ 15 Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32). 16 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (CRR) (OJ L 176, 27.6.2013, p.1). 17 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335 17.12.2009, p. 1). 18 Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (OJ L 354, 23.12.2016, p.37).
Amendment 101 #
Proposal for a regulation
Article 4 – paragraph 2 – subparagraph 1
Article 4 – paragraph 2 – subparagraph 1
2. The relative weight of sovereign bonds of every Member State within an SBBSs' underlying portfolio (‘baseline weight’) shall be equal to the relative weight of the contribution to the European Central Bank (ECB) by that Member State in accordance with the key for subscription, by the national central banks of Members States, of the ECB's paid-in capital as laid down in Article 29 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Unionshall be determined by the SPE in response to market demand.
Amendment 102 #
Proposal for a regulation
Article 4 – paragraph 2 – subparagraph 2
Article 4 – paragraph 2 – subparagraph 2
Amendment 103 #
Proposal for a regulation
Article 4 – paragraph 3
Article 4 – paragraph 3
Amendment 109 #
Proposal for a regulation
Article 4 – paragraph 4
Article 4 – paragraph 4
Amendment 110 #
Proposal for a regulation
Article 4 – paragraph 5
Article 4 – paragraph 5
Amendment 115 #
Proposal for a regulation
Article 6 – paragraph 1
Article 6 – paragraph 1
1. An SBBSs issue shall be composed of one senior tranche and one or more subordinated tranches. The outstanding nominal value of the senior tranche shall be at most seventy percent of the outstanding nominal value of the entire SBBSs issue and shall be determined by the SPE in response to market demand. The number and the outstanding nominal values of the subordinated tranches shall be determined by the SPE, subject to the limitation that the nominal value of the junior tranche shall be at least two percent of the outstanding nominal value of the entire SBBSs issue.
Amendment 118 #
Proposal for a regulation
Article 6 – paragraph 2 – subparagraph 1
Article 6 – paragraph 2 – subparagraph 1
2. Where adverse developments severely disrupt the functioning of sovereign debt markets in a Member State or in the Union, and where that disruption has been confirmed by the Commission in accordance with paragraph 4, SPEs shall lower the outstanding nominal value of the senior tranche to sixty percentby at least ten percentage points for any SBBSs issue issued after that confirmation.
Amendment 121 #
Proposal for a regulation
Article 9 – paragraph 1 – point b
Article 9 – paragraph 1 – point b
(b) ESMA has been nocertified of that financial product in accordance with Article 10(1) and the financial product has been included in the list referred to in Article 10(2).
Amendment 124 #
Proposal for a regulation
Article 10 – paragraph 1
Article 10 – paragraph 1
1. An SPE shall submit an application for certification of an SBBS issue by notifying ESMA at least one week before issuance of an SBBSs issue by means of the template referred to in paragraph 5 of this Article that an SBBSs issue meets the requirements of Articles 4, 5 and 6. ESMA shall inform the SPE's competent authority thereof without undue delay.
Amendment 129 #
Proposal for a regulation
Article 10 – paragraph 2
Article 10 – paragraph 2
2. ESMA shall maintain on its official website a list of all SBBSs issues that have been nocertified by SPEsESMA. ESMA shall update that list instantly and remove any SBBSs issue that is no longer considered to be an SBBSs issue following a decision of competent authoritiesESMA in accordance with Article 15.
Amendment 138 #
Proposal for a regulation
Article 13 – paragraph 1 – subparagraph 1
Article 13 – paragraph 1 – subparagraph 1
1. Member States shall designate one or morESMA shall be the competent authoritiesy to supervise the compliance of SPEs with this Regulation. Member States shall inform the Commission and ESMA about those competent authorities and, where relevant, about how their functions and duties are divided.
Amendment 140 #
Proposal for a regulation
Article 13 – paragraph 1 – subparagraph 2
Article 13 – paragraph 1 – subparagraph 2
Amendment 142 #
Proposal for a regulation
Article 13 – paragraph 2 – subparagraph 1
Article 13 – paragraph 2 – subparagraph 1
Amendment 145 #
Proposal for a regulation
Article 13 – paragraph 2 – subparagraph 2 – introductory part
Article 13 – paragraph 2 – subparagraph 2 – introductory part
Amendment 149 #
Proposal for a regulation
Article 14 – paragraph 2
Article 14 – paragraph 2
2. A competent authority that has clear and demonstrable grounds that an SPE is in breach of this Regulation shall promptly inform ESMA in a detailed manner the competent authority of the Member State where the SPE is established. The competent authority of the Member State where the SPE is established. ESMA shall take appropriate measures, including the decision referred to in Article 15.
Amendment 151 #
Proposal for a regulation
Article 14 – paragraph 3
Article 14 – paragraph 3
3. Where the SPE persists in acting in a manner that is clearly in breach of this Regulation despite measures taken by the competent authority of the Member State where it is established, or because that competent authority has failed to take measures within a reasonable time, the competent authority that has detected a breach of this Regulation may, after informing the competent authority of the Member State where the SPE is established andESMA, ESMA, may take all appropriate measures to protect investors, including prohibiting the SPE from carrying out any further marketing of SBBSs within its territory and taking the decision referred to in Article 15.
Amendment 156 #
Proposal for a regulation
Article 15 – paragraph 1
Article 15 – paragraph 1
1. Where there are reasons to believe that an SPE in infringement of Article 9 has used the designation ‘SBBS’ to market a product that fails to comply with the requirements set out in that Article, the competent authority of the Member State where the SPE is establishedESMA shall follow the procedure provided for in paragraph 2.
Amendment 158 #
Proposal for a regulation
Article 15 – paragraph 2 – subparagraph 1
Article 15 – paragraph 2 – subparagraph 1
2. Within 15 days after becoming aware of the possible infringement referred to in paragraph 1 the competent authority of the Member State where the SPE suspected of the infringement is establishedESMA shall decide whether Article 9 has been infringed and shall notify ESMA and the other relevant competent authorities thereof, including the competent authorities of the investors, when known. A competent authority that disagrees with the decision taken shall notify all other relevant competent authorities about its disagreement without undue delay. Where that disagreement is not resolved within three months of the date on which all relevant competent authorities have been notified, the matter shall be referred to ESMA in accordance with Article 19 and, where applicable, Article 20 of Regulation (EU) No 1095/2010. The conciliation period referred to in Article 19(2) of Regulation (EU) No 1095/2010 shall be one month.
Amendment 161 #
Proposal for a regulation
Article 15 – paragraph 2 – subparagraph 2
Article 15 – paragraph 2 – subparagraph 2
Amendment 163 #
Proposal for a regulation
Article 15 – paragraph 2 – subparagraph 3
Article 15 – paragraph 2 – subparagraph 3
Where the relevant competent authorities agreeESMA finds that the infringement by the SPE is related to non-compliance with Article 9 in good faith, ithey may decide to grant the SPE a period of maximum threone months to remedy the identified infringement, starting from the day the SPE was informed of the infringement by the competent authorityESMA. During that period, an SBBS appearing on the list maintained by ESMA pursuant to Article 10(2) shall continue to be considered an SBBS and shall be kept on that list.
Amendment 165 #
Proposal for a regulation
Article 16 – paragraph 1 – introductory part
Article 16 – paragraph 1 – introductory part
1. Without prejudice to the right for Member States to lay down criminal sanctions pursuant to Article 17, competent authoritiesESMA shall impose on the SPE or the natural person managing the SPE the appropriate remedial measures, including the decision referred to in Article 15, and the appropriate administrative sanctions set out in paragraph 3 where SPEs:
Amendment 168 #
Proposal for a regulation
Article 16 – paragraph 3 – introductory part
Article 16 – paragraph 3 – introductory part
3. Competent authoritiesESMA, when determining the type and level of administrative sanctions, shall take into account the extent to which the infringement was intentional or results from negligence and all other relevant circumstances, including, where appropriate:
Amendment 171 #
Proposal for a regulation
Article 16 – paragraph 4
Article 16 – paragraph 4
4. Member StatesESMA shall ensure that any decision imposing the remedial measures or administrative sanctions is properly reasoned and is subject to a right of appeal.
Amendment 173 #
Proposal for a regulation
Article 17 – paragraph 1
Article 17 – paragraph 1
Member States that have laid down criminal sanctions for the infringement referred to in Article 16(1) shall give their competent authorities all the necessary powersallow ESMA to liaise with judicial, prosecuting, or criminal justice authorities within their jurisdiction and to receive from, and to provide to, other competerelevant authorities and ESMA specific information about criminal investigations or proceedings commenced for the infringements referred to in Article 16(1).
Amendment 174 #
Proposal for a regulation
Article 18 – paragraph 1 – subparagraph 1
Article 18 – paragraph 1 – subparagraph 1
1. Competent authoritiesESMA shall publish on theirits website any decision imposing an administrative sanction in respect of which there is no longer a right of appeal and which is imposed for an infringement as referred to in Article 16(1) without undue delay and after the person concerned has been informed.
Amendment 177 #
Proposal for a regulation
Article 18 – paragraph 2 – subparagraph 1 – introductory part
Article 18 – paragraph 2 – subparagraph 1 – introductory part
2. Competent authoritiesESMA shall publish the administrative sanction on an anonymous basis, in accordance with national law, in any of the following circumstances:
Amendment 179 #
Proposal for a regulation
Article 18 – paragraph 3
Article 18 – paragraph 3
3. Competent authoritiesESMA shall ensure that information published under paragraph 1 or 2 remains on theirits official website for five years. Personal data shall be retained on the official website of the competent authority only for the period necessary.
Amendment 182 #
Proposal for a regulation
Article 20
Article 20
Amendment 184 #
Proposal for a regulation
Article 21 – paragraph 1
Article 21 – paragraph 1
Directive 2009/65/EC
Article 54a – paragraph 1 – point a
Article 54a – paragraph 1 – point a
(a) apply the same derogation or grant the same waiver for UCITS to invest up to 100% of their assets in the senior tranches of SBBSs as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted] in accordance with the principle of risk- spreading where those competent authorities consider that unit-holders in the UCITS have a protection that is equivalent to that of unit- holders in UCITS complying with the limits laid down in Article 52;
Amendment 186 #
Proposal for a regulation
Article 22 – paragraph 1
Article 22 – paragraph 1
Directive 2009/138/EC
Article 104 – paragraph 8 – subparagraph 1
Article 104 – paragraph 8 – subparagraph 1
For the purposes of the calculation of the Basic Solvency Capital Requirement, exposures to the senior tranches of sovereign bond-backed securities as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted] shall be treated as exposures to Member States' central governments or central banks denominated and funded in their domestic currency.
Amendment 190 #
Proposal for a regulation
Article 23 – paragraph 1 – point 1
Article 23 – paragraph 1 – point 1
Regulation (EU) No 575/2013
Article 268 – paragraph 5
Article 268 – paragraph 5
5. By way of derogation from the first paragraph, the senior tranches of sovereign bond-backed securities as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted] may always be treated in accordance with the first paragraph of this Article.;
Amendment 192 #
Proposal for a regulation
Article 23 – paragraph 1 – point 2
Article 23 – paragraph 1 – point 2
Regulation (EU) No 575/2013
Article 325 – paragraph 4
Article 325 – paragraph 4
4. For the purpose of this Title, institutions shall treat exposures in the form senior tranches of sovereign bond- backed securities as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted] as exposures to the central government of a Member State.;
Amendment 194 #
Proposal for a regulation
Article 23 – paragraph 1 – point 3
Article 23 – paragraph 1 – point 3
Regulation (EU) No 575/2013
Article 390 – paragraph 7 – subparagraph 2
Article 390 – paragraph 7 – subparagraph 2
The first subparagraph shall apply to exposures tohe senior tranches of sovereign bond-backed securities as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted]..
Amendment 196 #
Proposal for a regulation
Article 24 – paragraph 1
Article 24 – paragraph 1
Directive (EU) 2016/2341
Article 18a – paragraph 1
Article 18a – paragraph 1
1. In their national rules regarding the valuation of assets of IORPs, the calculation of own funds of IORPs, and the calculation of a solvency margin for IORPs, Member States shall treat the senior tranches of sovereign-bond backed securities, as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted], in the same way as euro area sovereign debt instruments.