13 Amendments of Paul TANG related to 2020/0267(COD)
Amendment 142 #
Proposal for a regulation
Recital 2
Recital 2
(2) The majority of crypto-assets fall outside of the scope of EU legislation and raise, among others, challenges in terms of investor protection, market integrity, energy consumption and financial stability. They therefore require a dedicated regime at Union level. By contrast, other crypto-assets qualify as financial instruments within the meaning of Directive 2014/65/EU of the European Parliament and of the Council (Markets in Financial Instruments Directive, MiFID II)33 . In so far as a crypto-asset qualifies as a financial instrument under that Directive, a full set of Union financial rules, including Regulation (EU) 2017/1129 of the European Parliament and of the Council (the Prospectus Regulation)34 , Directive 2013/50/EU of the European Parliament and of the Council (the Transparency Directive)35 , Regulation (EU) No 596/2014 of the European Parliament and of the Council (the Market Abuse Regulation)36 , Regulation (EU) No 236/2012 of the European Parliament and of the Council (the Short Selling Regulation)37 , Regulation (EU) No 909/2014 of the European Parliament and of the Council (the Central Securities Depositories Regulation)38 and Directive 98/26/EC of the European Parliament and of the Council (the Settlement Finality Directive)39 may apply to its issuer and firms conducting activities related to it. The so-called tokenisation of financial instruments, that is to say their transformation into crypto-assets to enable them to be issued, stored and transferred on a distributed ledger, is expected to open up opportunities for efficiency improvements in the entire trading and post-trading areasome parts of the trading and post- trading area provided that such crypto- assets are generated in an energy friendly way. Furthermore, as the financial instrument and the related risks remain the same regardless of whether a DLT is used, the fundamental trade-offs involving credit risk and liquidity remain in a tokenised world. Therefore, the success of token-based systems will fully depend on how well they interact with traditional account-based systems. _________________ 33Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349). 34Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (OJ L 168, 30.6.2017, p. 12) 35 Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013 amending Directive 2004/109/EC of the European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading and Commission Directive 2007/14/EC laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC (OJ L 294, 6.11.2013, p. 13) 36Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 12.6.2014, p. 1) 37Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps (OJ L 86, 24.3.2012, p. 1). 38Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (OJ L 257, 28.8.2014, p. 1) 39Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166, 11.6.1998, p. 45)
Amendment 147 #
Proposal for a regulation
Recital 4
Recital 4
(4) At the same time, regulatory gaps exist due to legal, technological and operational specificities related to the use of DLT and crypto-assets that qualify as financial instruments. For instance, there are no transparency, reliability and safety requirements imposed on the protocols and smart contracts underpinning crypto-assets that qualify as financial instruments which is highly problematic. The underlying technology could also pose some novel forms of cyber risks that are not appropriately addressed by existing rules. Several projects for the trading and post- trading of crypto-assets qualifying as financial instruments have been developed in the Union, but few are already in operation or they have limited scale. Given this limited experience as regards the trading and post-trading of transactions in crypto-assets that qualify as financial instruments, it would currently be premature to bring significant modifications to the Union financial services legislation to enable the full deployment of such crypto-assets and their underlying technology. At the same time, the creation of financial market infrastructures forFurthermore, as highlighted by the ECB advisory groups on market infrastructures for securities and collateral and for payments, the use of DLT would entail similar challenges to those faced by solutions relying on conventional technology (such as fragmentation and interoperability issues) and would at the same time potentially create new ones (for example, relating to the legal validity of tokens). Given this limited experience as regards the trading and post-trading of transactions in crypto-assets that qualify as financial instruments ias currently constrained by some requirements embedded inwell as the risks highlighted by the ECB, a very cautious approach is needed and it would be very premature to bring significant modifications to the Union’s financial services legislation that would not be fully adapted to crypto-assets qualifying as financial instruments and to the use of DLT. For instance, trading platforms for crypto-assets usually give direct access to retail investors, while traditional trading venues usually give access through financial intermediarieso enable the full deployment of such crypto-assets and their underlying technology.
Amendment 157 #
Proposal for a regulation
Recital 5
Recital 5
(5) In order to allow for the development of crypto-assets that qualify as financial instruments and DLT, while preserving a high level of financial stability, market integrity, transparency and, investor protection and a low consumption of energy, it would be useful to create a pilot regime for DLT market infrastructures. A pilot regime for DLT market infrastructures should allow such DLT market infrastructures to be temporarily exempted from some specific requirements under the Union financial services legislation that could otherwise prevent them from developing solutions for the trading and settlement of transactions in crypto-assets that qualify as financial instruments. The pilot regime should also enable the European Securities and Markets Authorities (ESMA) and competent authorities to gain experience on the opportunities and specific risks created by crypto-assets that qualify as financial instruments, and by their underlying technology, which should be characterised by a low level of energy consumption.
Amendment 175 #
Proposal for a regulation
Recital 10
Recital 10
(10) A DLT securities settlement system should be a securities settlement system operated by a CSD authorised under Regulation (EU) No 909/2014 (the Central Securities Depositories Regulation) that has received a specific permission under this Regulation. A DLT securities settlement system, and the CSD operating it, should be subject to the relevant requirements of Regulation (EU) No 909/2014 (the Central Securities Depository Regulation), except where the national competent authority has granted the CSD operating the DLT securities settlement system with one or several exemptions, in accordance with this Regulation. Such an exemption can only be granted provided the DLT securities settlement system operates in an energy friendly way.
Amendment 187 #
Proposal for a regulation
Recital 14
Recital 14
(14) A DLT MTF should be able to request one or several exemptions on a temporary basis, as listed under this Regulation, to be granted by the competent authority after ESMA has issued its recommendation, if it complies with the conditions attached to such exemptions as well as additional requirements set under this Regulation to address novel forms of risks raised by the use of DLT. TheA DLT MTF should also comply with any compensatory or corrective measure imposed by the competent authority in order to meet the objectives pursued by the provision for which an exemption has been requested.
Amendment 213 #
Proposal for a regulation
Recital 30
Recital 30
(30) A DLT market infrastructure should have specific and robust IT and cyber arrangements related to the use of DLT. These arrangements should be audited by the competent authority before any exemption is given, in order to check whether they are fit for purpose and proportionate to the nature, scale and complexity of the DLT market infrastructure’s business plan. The costs of such an audit should be borne by the DLT market infrastructure. These arrangements should also ensure the continued reliability, continuity and security of the services provided, including the reliability of smart contracts that are potentially used. DLT market infrastructures should also ensure the integrity, security, confidentiality, availability and accessibility of data stored on the DLT. The competent authority of a DLT market infrastructure should be allowed to request an audit to ensure that the overall IT and cyber arrangements are fit for purpose. The costs of such an audit should be borne by the DLT market infrastructure.
Amendment 218 #
Proposal for a regulation
Recital 31
Recital 31
(31) Where the business plan of a DLT market infrastructure would involve the safekeeping of clients’ funds, such as cash or cash equivalent, or DLT transferable securities, or the means of access to such DLT transferable securities, including in the form of cryptographic keys, the DLT market infrastructure should have adequate arrangements in place to safeguard their clients’ assets, which should be approved by the competent authority before any exemption is given. They should not use clients’ assets on own account, except with prior express consent from their clients. The DLT market infrastructure should segregate clients’ funds or DLT transferable securities, or the means of access to such assets, from its own assets or other clients’ assets. The overall IT and cyber arrangements of DLT market infrastructures should ensure that clients’ assets are protected against fraud, cyber threats or other malfunctions.
Amendment 226 #
Proposal for a regulation
Recital 34
Recital 34
(34) The competent authority which would examine the application submitted by a prospective DLT market infrastructure should have the possibility to refuse a permission if there were reasons to believe that the DLT market infrastructure would pose a threat to financial stability, investor protection or market integrity or if the application were an attempt to circumvent existing requirements.
Amendment 273 #
Proposal for a regulation
Article 3 – paragraph 1 – point a
Article 3 – paragraph 1 – point a
(a) shares, the issuer of which has a market capitalisation or a tentative market capitalisation of less than EUR 2100 million; or
Amendment 277 #
Proposal for a regulation
Article 3 – paragraph 1 – point b
Article 3 – paragraph 1 – point b
(b) convertible bonds, covered bonds, corporate bonds, other public bonds and other bonds, with an issuance size of less than EUR 2500 million.
Amendment 291 #
Proposal for a regulation
Article 3 – paragraph 3
Article 3 – paragraph 3
3. The total market value of DLT transferable securities recorded in a CSD operating a DLT securities settlement system shall not exceed EUR 2.5 billion. Where a DLT MTF records the DLT transferable securities instead of a CSD, in accordance with paragraphs 2 and 3 of Article 4, the total market value of the DLT transferable securities recorded by the investment firm or market operator operating the DLT MTF shall not exceed EUR 2.5 billion.
Amendment 414 #
Proposal for a regulation
Article 7 – paragraph 5 – subparagraph 1
Article 7 – paragraph 5 – subparagraph 1
ESMA shall publish on its website the list of DLT MTFs, the start and end dates of their specific permissions and the list of exemptions granted to each of them. Furthermore, ESMA shall publish on its website all requests for exemptions that have been made under this Regulation, indicating in each case whether ESMA recommended that the exemption be accepted or refused.
Amendment 481 #
Proposal for a regulation
Article 10 – paragraph 1 – point j
Article 10 – paragraph 1 – point j
(j) the benefits and costs resulting from the use of a DLT, in terms of any efficiency improvements, energy consumption and risk reducmitigations across the entire trading and post-trading chain, including without limitation, with regard to the recording and safekeeping of DLT transferable securities, the traceability of transactions, corporate actions, reporting and supervision functions at the level of the DLT market infrastructure;