31 Amendments of Jonás FERNÁNDEZ 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 153 #
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, it would be useful to create a pilot regime for DLT market infrastructures. The creation of the pilot regime should be without prejudice to the tasks and responsibilities of the European Central Bank (ECB) and the national central banks in the European System of Central Banks (ESCB), set out in the Treaty on the Functioning of the European Union and the Statutes of the ESCB and of the ECB, to promote the smooth operation of payment systems and to ensure efficient and sound clearing and payment systems within the Union and with third countries. 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.
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 160 #
Proposal for a regulation
Recital 6 a (new)
Recital 6 a (new)
(6 a) Where CSDs operated by members of the ESCB, by Member States’ national bodies performing similar functions, or by other public bodies charged with or intervening in the management of public debt in the Union, operate a DLT securities settlement system, they should not be required to seek specific exemptions or permissions from a competent authority, since such CSDs are not required to report to competent authorities or to comply with their orders, and are subject to a limited set of requirements under Regulation (EU) No 909/2014, in accordance with Article 1(4) of that Regulation.
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 180 #
Proposal for a regulation
Recital 11
Recital 11
(11) A DLT MTF or a CSD operating a DLT securities settlement system should only admit to trading or record DLT transferable securities on their distributed ledger. DLT transferable securities should be crypto-assets that qualify as ‘transferable securities’ within the meaning of Directive 2014/65/EU (the Market in Financial Instruments Directive, MiFID II) and that are issued, transferred and stored on a distributed ledger. DLT market infrastructures should bear the liability for risks related to the functioning of the DLT they operate, notably ledger transparency risks, cyber risks and operational risks.
Amendment 185 #
Proposal for a regulation
Recital 13
Recital 13
(13) In order to ensure a level playing field with transferable securities admitted to trading on a traditional trading venue within the meaning of Directive 2014/65/EU (the Market in Financial Instruments Directive, MiFID II) and ato ensure high levels of market integrity, investor protection and financial stability, the DLT transferable securities admitted to trading on a DLT MTF should always be subject to the provisions prohibiting market abuse in Regulation (EU) No 596/2014 (the Market Abuse Regulation).
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 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 231 #
Proposal for a regulation
Recital 38
Recital 38
(38) Since DLT market infrastructures could receive temporary exemptions from existing Union legislation, they should closely cooperate with competent authorities and the European Securities and Markets Authority (ESMA) during the time of their specific permission. DLT market infrastructures should inform the competent authorities and ESMA about any material change to its business plan and its critical staff, any evidence of cyber threats or attacks, fraud or serious malpractice, of any change in the information provided at the time of the initial application for permission, of any technical difficulties, and in particular those linked to the use of DLT, and of any new risks to investor protection, market integrity and financial stability that was not envisaged at the time where the specific permission was granted. Where notified of such a material change, the competent authority should request the DLT market infrastructure to apply for a new permission or exemption or it should take any corrective measures it deems appropriate. DLT market infrastructures should also provide any relevant data to competent authorities and ESMA, whenever such data is requested. To ensure investor protection, market integrity and financial stability, twhere notified of such a material change, the competent authority should request ESMA to issue a recommendation and, on that basis, request the DLT market infrastructure to apply for a new permission or exemption or to take any corrective measures that ESMA deems appropriate. DLT market infrastructures should also provide any relevant data to competent authorities and to ESMA, whenever such data is requested. The competent authority which granted the specific permission to the DLT market infrastructure should be able to recommend any corrective measures, after consultation witha recommendation has been issued by ESMA.
Amendment 255 #
Proposal for a regulation
Article 2 – paragraph 1 – point 5
Article 2 – paragraph 1 – point 5
(5) ‘DLT transferable securities’ means ‘transferable securities’ within the meaning of Article 4(1)(44) (a) and (b) of Directive 2014/65/EU that are issued, recorded, transferred and stored using a DLT, which is not built or based on a proof of work consensus mechanism;
Amendment 317 #
Proposal for a regulation
Article 4 – paragraph 3 – point a
Article 4 – paragraph 3 – point a
(a) guarantees, in accordance with Article 37(2) and (3) of Regulation (EU) No 909/2014, that the number of DLT transferable securities in an issue or in part of an issue admitted by the investment firm or market operator operating the DLT MTF, is equal to the sum of DLT transferable securities making up such an issue or part of an issue, recorded on the DLT, at any given time;
Amendment 320 #
Proposal for a regulation
Article 4 – paragraph 3 – point d
Article 4 – paragraph 3 – point d
(d) provides, in accordance with Article 39(5) of Regulation (EU) No 909/2014, clear, accurate and timely information in relation to the settlement of transactions, including settlement finality, by defining the moment from which transfer orders or other pre-identified instructions may not be revoked by a member, participant, issuer or client;
Amendment 326 #
Proposal for a regulation
Article 4 – paragraph 3 – point g
Article 4 – paragraph 3 – point g
(g) either prevents or, if not possible, addresses settlement fails. , in accordance with Article 7 of Regulation (EU) No 909/2014 and Commission Delegated Regulation (EU) 2018/12291a. _________________ 1aCommission Delegated Regulation (EU) 2018/1229 of 25 May 2018 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on settlement discipline (OJL 230, 13.9.2018, p.1)
Amendment 340 #
Proposal for a regulation
Article 5 – paragraph 3 – introductory part
Article 5 – paragraph 3 – introductory part
3. At its request, a CSD operating a DLT securities settlement system may be exempted by the competent authority from the application of Article 19 and Article 30 of Regulation (EU) No 909/2014, in relation only to the outsourcing of a core service to a third party, and from Article 30 of that Regulation, provided that:
Amendment 351 #
Proposal for a regulation
Article 5 – paragraph 5 – subparagraph 1
Article 5 – paragraph 5 – subparagraph 1
The settlement of payments mayshall be carried out through central bank money, where practicable and available, or where not practicable and available, through commercial bank money, including commercial bank money in a token-based form, or in e-money tokens.
Amendment 353 #
Proposal for a regulation
Article 5 – paragraph 5 – subparagraph 2
Article 5 – paragraph 5 – subparagraph 2
Where settlement occurs through commercial bank money or e-money tokens, the investment firm or market operator operating the DLT MTFCSD operating the DLT securities settlement system shall identify, measure, monitor, manage, and minimise any counterparty risk arising from the use of such money, also taking into account any risk arising from the designation or non- designation of the DLT SSS as a system for the purposes of Directive 98/26/EC and of paragraph 8 of this Article.
Amendment 374 #
Proposal for a regulation
Article 6 – paragraph 1 – subparagraph 1
Article 6 – paragraph 1 – subparagraph 1
They shall also have up-to-date, clear and detailed publically available written documentation, which may be made available by electronic means, defining the rules under which the DLT market infrastructure shall operate, including the agreed upon associated legal terms defining the rights, obligations, responsibilities and liabilities of the operator of the DLT market infrastructure, as well as that of the members, participants, issuers and/or clients using the DLT market infrastructure concerned. Such legal arrangements shall specify the governing law, the pre-litigation dispute settlement mechanism, any insolvency protection measures under Directive 98/26/EC and the jurisdiction for bringing legal action.
Amendment 378 #
Proposal for a regulation
Article 6 – paragraph 2
Article 6 – paragraph 2
2. A CSD operating a DLT securities settlement system, and an investment firm or a market operator operating a DLT MTF requesting an exemption from Article 3(2) of Regulation (EU) No 909/2014, shall establish: (a) rules on the functioning of the DLT they operate, including the rules for accessing the distributed ledger technology, the participation of the validating nodes, addressing potential conflicts of interest, and risk management including any mitigation measures; and (b) measures to mitigate the risks arising from insolvency, where insolvency protection measures under Directive 98/26/EC do not apply.
Amendment 402 #
Proposal for a regulation
Article 7 – paragraph 3 – introductory part
Article 7 – paragraph 3 – introductory part
3. Before deciding on an application for a specific permission to operate a DLT MTF under this Regulation, the competent authority of the home Member State shall notify and provide all relevant information on the DLT MTF to ESMA, an explanation of the exemptions requested, their justifications and any compensatory measures proposed by the applicant or required by the competent authority. , in the case of an application by a credit institution, to its prudential supervisor, including the ECB for significant credit institutions, and, in all cases, to ESMA, including an explanation of the exemptions requested, their justifications and any compensatory measures proposed by the applicant or required by the competent authority. In addition, where an applicant intends to provide any of the core services listed in Section A of the Annex to Regulation (EU) No 909/2014, before deciding on an application for a specific permission to operate a DLT MTF under this Regulation, the competent authority of the home Member State shall transmit all information included in the application to the relevant authorities specified in Article 12 of Regulation (EU) No 909/2014 and consult those authorities on the features of the securities settlement system operated by the applicant. A relevant authority may inform the competent authority of its views within three months of receipt of the information from the competent authority.
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 415 #
Proposal for a regulation
Article 7 – paragraph 6 – introductory part
Article 7 – paragraph 6 – introductory part
6. Without prejudice to Article 8 and Article 44 of Directive 2014/65/EU, the competent authority which granted a specific permission under this Regulation shall withdraw such permission or any of the exemptions granted, after consultation with ESMA, and informing the relevant authorities specified in Article 12 of Regulation (EU) No 909/2014 and, in the case of a specific permission granted to a credit institution, its prudential supervisor, including the ECB for significant credit institutions, in accordance with paragraph 3, if any of the following has occurred:
Amendment 431 #
Proposal for a regulation
Article 8 – paragraph 3 – introductory part
Article 8 – paragraph 3 – introductory part
3. Before deciding on an application for a specific permission to operate a DLT MTF securities settlement system under this Regulation, the competent authority shall notify and provide all relevant information on the DLT securities settlement system to the relevant authorities specified in Article 12 of Regulation (EU) No909/2014 and shall consult those authorities on the features of the securities settlement system operated by the applicant and, in the case of an application by a credit institution, shall provide all such relevant information to the prudential supervisor, including the ECB for significant credit institutions, and, in all cases, to ESMA, and including an explanation of the exemptions requested, their justification and any compensatory measures proposed by the applicant or required by the competent authority. Within three months of receipt of the notification, the relevant authorities specified in Article 12 of Regulation (EU) No 909/2014 may respond to the competent authority, and ESMA shall provide the competent authority with a non-binding opinion on the application and shall make any recommendations on the exemptions requested by the applicant that are necessary to ensure investor protection, market integrity and financial stability. ESMA shall also promote the consistency and proportionality of exemptions granted by competent authorities to CSDs operating DLT securities settlement systems, across the Union. In order to do so, ESMA shall consult the competent authorities of the other Member States in a timely manner and take account of their views in its opinion.
Amendment 439 #
Proposal for a regulation
Article 8 – paragraph 4 – introductory part
Article 8 – paragraph 4 – introductory part
4. Without prejudice to Article 17 of Regulation (EU) No 909/2014, and after having informed the relevant authorities specified in Article 12 of Regulation (EU) No 909/2014 and, in the case of a credit institution, its prudential supervisor, including the ECB for significant credit institutions, a competent authority shall refuse to grant a specific permission under this Regulation, if there are grounds for believing any of the following:
Amendment 441 #
Proposal for a regulation
Article 8 – paragraph 6 – introductory part
Article 8 – paragraph 6 – introductory part
6. Without prejudice to the application of Article 20 of Regulation (EU) No 909/2014, the competent authority which granted the specific permission, under this Regulation shall withdraw such permission or any of the exemptions granted, after consultation with ESMA and the relevant authorities specified in Article 12 of Regulation (EU) No 909/2014 and informing, in the case of a credit institution, its prudential supervisor, including the ECB for significant credit institutions, in accordance with paragraph 3, if any of the following has occurred:
Amendment 451 #
Proposal for a regulation
Article 9 – paragraph 1 – introductory part
Article 9 – paragraph 1 – introductory part
1. Without prejudice to the application of any relevant provisions of Directive 2014/65/EU and Regulation (EU) No 909/2014, the operators of DLT market infrastructures shall cooperate with the competent authorities, including, in the case of credit institutions, their prudential supervisors, and including the ECB in the case of significant credit institutions, which are entrusted with granting specific permissions under this Regulation and with ESMA.
Amendment 454 #
Proposal for a regulation
Article 9 – paragraph 1 – subparagraph 1 – introductory part
Article 9 – paragraph 1 – subparagraph 1 – introductory part
In particular, immediately upon becoming aware of any of the matters listed below, the operators of DLT market infrastructures shall notify, the said competent authorities including, in the case of credit institutions, their prudential supervisors, and including the ECB in the case of significant credit institutions and ESMA, thereof. Such matters include, without limitation:
Amendment 456 #
Proposal for a regulation
Article 9 – paragraph 2
Article 9 – paragraph 2
2. The operators of DLT market infrastructures shall provide the competent authority which granted the specific permission and ESMA with any relevant information they may require. In the case of a DLT SSS or a DLT MTF providing core CSD services, the competent authority shall transmit information concerning the functioning of the securities settlement system to the relevant authorities specified in Article 12 of Regulation (EU) No 909/2014 as soon as possible.
Amendment 458 #
Proposal for a regulation
Article 9 – paragraph 4 – introductory part
Article 9 – paragraph 4 – introductory part
4. Every six months from the date of the specific permission, the operator of a DLT market infrastructure shall submit a report to the competent authority and ESMA. Such report shall include, without limitation:including, in the case of a credit institution, its prudential supervisor, and including the ECB in the case of significant credit institutions, and ESMA. In the case of a DLT securities settlement system or a DLT MTF providing core CSD services, the competent authority shall transmit that information to the relevant authorities specified in Article 12 of Regulation (EU) No 909/2014 as soon as possible.
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;