[ParlTrack]

Proposal for a regulation
Article 1 – paragraph 1 – introductory part

Regulation (EU) 2016/1011
Article 2 – paragraph 1 a (new)

(1) ~~Article 2 is amended as follows:~~(- a) the following paragraph is inserted: "1a. Chapter 4a applies to: (a) any contract or any financial instrument that is governed by the laws of one of the Member States and that references a benchmark; and (b) any contract that is subject to the law of a third country but the parties to which are all established in the Union and where the law of that third country does not provide for an orderly wind down of a benchmark."

2020/10/29
Committee: ECON

Patryk JAKI

Proposal for a regulation
Article 1 – paragraph 2 – introductory part

Regulation (EU) 2016/1011
Article 23a

(2) ~~the following Article 23a is inserted:~~ The following chapter is added: “CHAPTER 4a Replacement of a benchmark by legislation” Article 23a Replacement of a benchmark by Union legislation (1) The Commission may designate one or more replacement benchmarks for a benchmark designated as critical by an implementing act adopted in accordance with Article 20, paragraph 1(a) or 1(c) or a third country benchmark where the winding down or cessation of that benchmark may result in significant disruption of the functioning of financial markets in the Union, provided that any of the following events has occurred: (a) the competent authority for the administrator of that benchmark has issued a public statement, or has published information, in which it is announced that the capability of that benchmark to measure the underlying market or economic reality cannot be restored. In the case of a critical benchmark under points (a) and (c) of Article 20 (1), the above determinations shall be made by the competent authority of that critical benchmark only after the remedial powers set out in Article 23 have been applied without leading to the restoration of the benchmark’s capability to measure the underlying market or economic reality; (b) the administrator of a benchmark has issued a public statement, or has published information, or such public statement has been made or such information has been published on behalf of that administrator, in which it is announced that that administrator will orderly wind down the benchmark or will cease to provide the benchmark or certain tenors or certain currencies in which the benchmark is calculated, permanently or indefinitely, provided that, at the time of the issuance of the statement or the publication of the information, there is no successor administrator that will continue to provide the benchmark; (c) the competent authority for the administrator of a benchmark or any entity with insolvency or resolution authority over the administrator of that benchmark has issued a public statement or has published information in which it is stated that the administrator of that benchmark will orderly wind down the benchmark or will cease to provide that benchmark or certain tenors or certain currencies in which the benchmark is calculated permanently or indefinitely, provided that, at the time of the issuance of the statement or the publication of the information, there is no successor administrator that will continue to provide that benchmark; (d) the competent authority withdraws or suspends the authorization in accordance with Article 35, withdraws the recognition in accordance with Article 32(8) or ceases the endorsement in accordance with Article 33(6), provided that, at the time of the withdrawal or suspension or cessation, there is no successor administrator that will continue to provide that benchmark. (2) The replacement benchmark shall, by law, replace all references to the benchmark in contracts and financial instruments that are subject to Article 2(1a), where all of the following conditions are fulfilled: (a) the contracts or financial instruments reference the benchmark that will cease or be wound down, on the date when the implementing act designating the replacement benchmark enters into force; and (b) those contracts or financial instruments contain (i) no fallback provision or a fallback provision that does not cover the permanent cessation of a reference benchmark; or (ii) a permanent fallback provision, provided that - the relevant authority has established that the application of the contractually agreed fallback provision does generally no longer, and with significant difference, reflect the underlying market or the economic reality that the ceasing benchmark is intended to measure, and could have an adverse impact on financial stability; - following the assessment by the relevant authority in accordance with first indent, one of the parties to the contract has objected to the contractually agreed fallback provision at the latest [three months] before the permanent cessation or winding down of the benchmark; - the contracting parties have not agreed on an alternative fallback provision following the objection pursuant to second indent at latest [one working day] before the permanent cessation or winding down of the benchmark. For the purposes of first indent of point (ii), the relevant authority shall inform the Commission and ESMA of its assessment without undue delay. Where entities in more than one Member State could be affected by the assessment, the relevant authorities of all those Member States shall conduct the assessment jointly. Member States shall designate one or more relevant authorities, which are in the position to conduct the assessment in accordance with first indent). Member States shall inform the Commission and ESMA of the designation of the competent authorities pursuant to this paragraph by … [6 months after entry into force of this Regulation]. (3) The Commission shall adopt an implementing act to designate one or more replacement benchmarks in accordance with the examination procedure referred to in Article 50(2) where one of the conditions laid down in paragraph 1 of this Article fulfilled. The implementing act shall include the following elements: (i) the replacement benchmark (ii) the spread adjustment, including the method for determining such spread adjustment, that is to be applied to the benchmark in cessation on the date of the replacement for each particular term to account for the effects of the transition or change from the benchmark to be wound down to the replacement benchmark; (iii) the corresponding essential conforming changes that are associated with and reasonably necessary for the use or application of a replacement benchmark; (iv) the relevant date from which the replacement benchmark shall apply; When adopting the implementing act, the Commission shall take into account, where available, the recommendations on the replacement benchmark, the spread adjustment and the benchmark replacement conforming changes made by the central bank responsible for the currency area in which the relevant benchmark which is to be wound down, or by the alternative reference rate working group operating under the auspices of the central bank. Before adopting the implementing act the Commission shall conduct a public consultation and shall take into account the recommendations of other relevant stakeholders, including the competent authority of the benchmark administrator and ESMA. (4) Notwithstanding point (ii) of paragraph 2(b) of this Article, the replacement benchmark designated by the Commission in accordance with paragraph 1 of this Article shall not apply where all parties or the required majority of a contract or financial instrument that is subject to Article 2(1a) have agreed to apply a different replacement benchmark before or after the entry into force of the implementing act.

2020/10/29
Committee: ECON

Patryk JAKI

Proposal for a regulation
Article 1 – paragraph 2

(3) the following article is inserted: "Article 23b – Replacement of a benchmark by national legislation (1) The Member State, where the majority of contributors is located, or competent authority may designate one or more replacement benchmarks for a benchmark according to Article 20 (1)(b), provided that any of the following events has occurred: (a) the competent authority for the administrator of that benchmark has issued a public statement, or has published information, in which it is announced that the capability of that benchmark to measure the underlying market or economic reality cannot be restored and that the remedial powers set out in Article 23 have been deployed applied without leading to the restoration of the benchmark’s capability to measure the underlying market or economic reality; (b) the administrator of a benchmark has issued a public statement, or has published information, or such public statement has been made or such information has been published on behalf of that administrator, in which it is announced that that administrator will orderly wind down the benchmark or has ceased or will cease to provide the benchmark or certain tenors of the benchmark or certain currencies in which the benchmark is calculated, permanently or indefinitely, provided that, at the time of the issuance of the statement or the publication of the information, there is no successor administrator that will continue to provide the benchmark; (c) the competent authority for the administrator of a benchmark or any entity with insolvency or resolution authority over the administrator of that benchmark has issued a public statement or has published information in which it is stated that the administrator of that benchmark will orderly wind down or has ceased or will cease to provide that benchmark or certain tenors or certain currencies in which the benchmark is calculated permanently or indefinitely, provided that, at the time of the issuance of the statement or the publication of the information, there is no successor administrator that will continue to provide that benchmark or (d) the competent authority withdraws or suspends the authorization of the benchmark administrator according to Article 35, provided that, at the time of the withdrawal or suspension there is no successor administrator that will continue to provide that benchmark. (2) Where a Member State designates one or more replacement benchmarks in accordance with paragraph 1, the competent authority of that Member States hall immediately notify ESMA. (3) The replacement benchmark shall, by operation of law, replace all references to the benchmark in contracts and securities financial instruments that are subject to Article 2 (1a) where all of the following conditions are fulfilled: (a) the contracts or securities financial instruments reference the benchmark that will cease or has ceased to be published on the date when the national legislation designating the replacement benchmark enters into force; and (b) those contracts or securities financial instruments contain no fallback provision or contain a fallback provision which does not cover the permanent cessation of a reference benchmark. (4) The replacement benchmark designated by the Member State or competent authority in accordance with paragraph 1 shall not apply where all parties or the required majority of a contract or security financial instrument that is subject to Article 2(1a) have agreed to apply a different replacement benchmark before or after the entry into force of the national provision.";

2020/10/29
Committee: ECON

3 Amendments of Patryk JAKI related to 2020/0154(COD)

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