Activities of Sharon BOWLES related to 2010/0250(COD)
Plenary speeches (3)
Derivatives, central counterparties and trade repositories (A7-0223/2011 - Werner Langen) (vote)
Derivatives, central counterparties and trade repositories (debate)
Derivatives, central counterparties and trade repositories (debate)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories PDF (888 KB) DOC (996 KB)
Amendments (167)
Amendment 94 #
Proposal for a regulation
Recital 22
Recital 22
(22) It is important that market participants report all details regarding OTC derivative contracts they have entered into to trade repositories, including exchange-traded derivatives, to trade repositories. Retrospective reporting to a repository of outstanding contracts should be considered. As a result, information on the risks inherent in OTC derivatives markets will be centrally stored and easily accessible to ESMA, the relevant competent authorities and the relevant central banks of the ESCB.
Amendment 95 #
Proposal for a regulation
Recital 23
Recital 23
(23) In order to allow for a comprehensive overview of the market and for the purposes of assessing systemic risk, both cleared and non-cleared contracts should be reported to trade repositories.
Amendment 96 #
Proposal for a regulation
Recital 43
Recital 43
(43) Trade repositories may collect data only for regulatory purposes that are relevant to competent authorities in all Member States, and may not publish and/or otherwise make available or make use of such data, other than for the purposes of this Regulation. In view of the fact that surveillance of trade repositories does not have any fiscal implications and that many authorities across Member States will need access to the data maintained by trade repositories, ESMA should assume responsibility for the registration, withdrawal and surveillance of trade repositories.
Amendment 97 #
Proposal for a regulation
Recital 45 a (new)
Recital 45 a (new)
(45a) There are areas within the sector of financial services and trading of derivative contracts where commercial and intellectual property rights may also exist. In instances where these relate to products which have become used as, or which impact on, an industry standard, there should be a requirement for such licences to be made available on proportionate FRAND (fair, reasonable and non-discriminatory) terms.
Amendment 98 #
Proposal for a regulation
Article 2 – point 2
Article 2 – point 2
(2) 'trade repository' means an entity that is registered and centrally collects and maintains the records of OTC derivatives for regulatory purposes under and in accordance with this Regulation;
Amendment 100 #
Proposal for a regulation
Article 4 – paragraph 2 – subparagraph 1a (new)
Article 4 – paragraph 2 – subparagraph 1a (new)
Where relevant, the modalities associated with onset, phasing in, or retrospective effect should take account of international consensus. The legalities and practicalities of retrospective effect must be taken into account.
Amendment 107 #
Proposal for a regulation
Article 6 – paragraph 1 – subparagraph 2 a (new)
Article 6 – paragraph 1 – subparagraph 2 a (new)
All reporting shall be carried out in accordance with international industry open standards.
Amendment 109 #
Proposal for a regulation
Article 6 – paragraph 4 – subparagraph 1
Article 6 – paragraph 4 – subparagraph 1
Powers are delegated to the Commission to determine the details and type of the reports referred to in paragraphs 1 and 2 for the different classes of derivatives. , groups or categories of derivatives and for any retrospective effect.
Amendment 125 #
Proposal for a regulation
Article 20 – paragraph 4 – subparagraph 1
Article 20 – paragraph 4 – subparagraph 1
Any confidential information received, exchanged or transmitted pursuant to this Regulation shall be subject to the conditions of professional secrecy laid down in paragraphs 1, 2 and 3. Such information may only be used, including by competent authorities, ESMA, CCPs, trade repositories, bodies or other natural or legal persons, for the purposes of this Regulation.
Amendment 126 #
Proposal for a regulation
Title
Title
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on OTC derivatives, central counterparties and trade repositories(Text with EEA relevance) (This amendment applies throughout the text.)
Amendment 126 #
Proposal for a regulation
Article 21 – paragraph 2
Article 21 – paragraph 2
2. Competent authorities and other bodies or natural and legal persons receiving confidential information in the exercise of their duties under this Regulation shall only use it in the course of their duties. They shall not be permitted to publish or otherwise make any such confidential information (or any derivative thereof) available for any other purpose except as expressly provided for in this Regulation.
Amendment 144 #
Proposal for a regulation
Article 67 – paragraph 1
Article 67 – paragraph 1
1. A trade repository shall publish only aggregate positions by class of derivatives on the contracts reported to it.
Amendment 145 #
Proposal for a regulation
Article 67 – paragraph 2 – introductory wording
Article 67 – paragraph 2 – introductory wording
2. A trade repository shall make the necessary information available only to the following entities:
Amendment 147 #
Proposal for a regulation
Recital 12
Recital 12
(12) This Regulation sets out the criteria for determining the eligibility to the clearing obligation. IOn view of its pivotal role, ESMAthe basis of draft implementing standards developed by ESMA, the Commission should decide whether a class of derivatives meets the eligibility criteria, whether an obligation should apply and from when the clearing obligation take effect. The prioritisation of which classes should be subject to a clearing obligation should be based on their contribution to systemic risk. The obligations of institutions required to clear their contracts shall also be based proportionately on their overall size and contribution to systemic risk.
Amendment 150 #
Proposal for a regulation
Recital 12 a (new)
Recital 12 a (new)
(12 a) In determining the eligibility for clearing of classes of derivatives, the specific nature of the systemic risks implied by those classes of derivatives should be taken into account in line with developments in international regulation. For certain classes involving exchange of principal, settlement risk may be the predominant risk and may be addressed through existing and separate infrastructure arrangements. This may distinguish those classes of derivatives, for which CCP clearing (which addresses counterparty / replacement risk) may not be optimal for addressing settlement risk, from other classes of derivatives.
Amendment 155 #
Proposal for a regulation
Recital 13
Recital 13
(13) For an OTC derivative contract to be cleared, both parties to that contract must consent. Therefore, exemptions to the clearing obligation should be narrowly tailored as they would reduce the effectiveness of the obligation and the benefits of CCP clearing and may lead to regulatory arbitrage between groups of market participants. Nevertheless, the Commission and ESMA shall ensure that mandatory clearing arrangements also protect investors and take account of robust arrangements relating to specific types of investment and assets.
Amendment 160 #
Proposal for a regulation
Recital 15 a (new)
Recital 15 a (new)
(15 a) Capital requirements for financial institutions in the case of bilateral derivative contracts that are ineligible for central clearing or concluded with counterparties derogated from the clearing obligation, should be based on a default risk-proportionate approach, taking into account bilateral counterparty risk management techniques as well as the burden on derogated counterparties of disproportionate liquidity or capital requirements.
Amendment 164 #
Proposal for a regulation
Recital 16
Recital 16
(16) Where appropriate, rules applicable to financial counterparties, should also apply to non-financial counterparties. It is recognised that non-financial counterparties use OTC-contracts in order to cover themselves against commercial risks directly linked to their commercial activities. Consequently, in determining whether a non-financial counterparty should be subject to the clearing obligation, consideration should be given to the purpose for which that non-financial counterparty uses OTC derivatives and to the size of the exposures that it has in those instruments. One means of assessing whether a non financial counterparty is using OTC contracts to cover themselves against commercial risks directly linked to their commercial activities could be through their annual audit. When establishing the threshold for the clearing obligation, ESMA should consult all relevant authorities, as for example regulators responsible for commodity markets, in order to ensure that the particularities of these sectors are fully taken into account. Moreover, by 31 December 2013, the Commission shall assess the systemic importance of the transactions of non- financial firms in OTC derivatives in different sectors, including the energy sector.
Amendment 168 #
Proposal for a regulation
Recital 16 a (new)
Recital 16 a (new)
(16 a) Derivative contracts that are objectively measurable as reducing risks directly related to the financial solvency of a pension scheme, physical real estate or other long term liability driven investments shall be excluded from the clearing obligation in so far as the posting of liquid collateral would result in an undue burden on the investor due to asset conversion requirements.
Amendment 169 #
Proposal for a regulation
Recital 16 b (new)
Recital 16 b (new)
(16 b) Where an exemption from clearing is provided this should normally ensure that a similar exemption is provided for in any prudential requirements.
Amendment 171 #
Proposal for a regulation
Recital 17
Recital 17
(17) A contract entered into by a fund, whether managed by a fund manager or not, should be considered within the scope of this Regulation. However, a fund whose investment policy is solely to develop or invest in physical real estate (directly or indirectly through subsidiary entities, co- ownership or joint venture participations) shall not be considered a financial counterparty for the purposes of this Regulation.
Amendment 175 #
Proposal for a regulation
Recital 19
Recital 19
(19) As not all market participants that are subject to the clearing obligation are able to become clearing members of the CCP (or clients of clearing members), they should have the possibility to access CCPs as clients or through investment firms or credit institutions that are themselves clients.
Amendment 176 #
Proposal for a regulation
Recital 20
Recital 20
(20) The introduction of a clearing obligation along with a process to establish which CCPs can be used for the purpose of this obligation may lead to unintended competitive distortions of the OTC derivatives market. For example, a CCP could refuse to clear transactions executed on certain trading venues because the CCP is owned by a competing trading venue. In order to avoid such discriminatory practices, CCPs should accept to clear transactions executed in different venues, to the extent that those venues comply with the operational and technical requirements established by the CCP. Generally, the CommissionCommon technical standards relating to issues such as margin calculation and information exchange protocols will form an important part of ensuring fair and non- discriminatory access of authorised trading venues to CCPs. The Commission must pay close attention to the possible development of technological differences, discriminatory practices, and work-flow barriers which are harmful to competition and should continue to closely monitor the evolution of the OTC derivatives market and should, w. Where necessary, they should intervene in order to prevent such competitive distortions from occurring in the Internal Market.
Amendment 182 #
Proposal for a regulation
Recital 22
Recital 22
(22) It is important that market participants report all details regarding OTC derivative contracts they have entered into to trade repositories, including exchange traded derivatives, into to trade repositories. Retrospective reporting to a repository of outstanding contracts should be considered together with a methodology to upload extant contracts for all derivatives that are electronically recorded and of significance to a systemic overview. As a result, information on the risks inherent in OTCall derivatives markets will be centrally stored and easily accessible to ESMA, the relevant competent authorities and the relevant central banks of the ESCB.
Amendment 186 #
Proposal for a regulation
Recital 23
Recital 23
(23) In order to allow for a comprehensive overview of the market and for assessing systemic risk purposes, both cleared and non-cleared contracts should be reported to trade repositories.
Amendment 192 #
Proposal for a regulation
Recital 30
Recital 30
(30) Where a CCP risks insolvency, the fiscal responsibility may lie predominantly with the Member State in which it is established. It follows that authorization and supervision of that CCP should be exercised by the relevant competent authority of that Member State. However, since a CCP'’s clearing members may be established in different Members States and they will be the first to be impacted by the CCP's default, it is imperative that all relevant competent authorities arESMA should be involved in the authorization and supervision process and that appropriate cooperation mechanisms, including colleges, are put in place. This will avoid divergent national measures or practices and obstacles to the internal market. ESMA should be a participant in every college in order to ensure the consistent and correct application ofinvolve competent authorities from those Member Stares in which a CPP is operating in preparing advice on the authorisation and reviewing ongoing compliance with this Regulation.
Amendment 199 #
Proposal for a regulation
Recital 36
Recital 36
(36) Clients of clearing members that clear their OTC derivatives with CCPs should be granted a high level of protection. The actual level of protection depends on the level of segregation that those clients choose. Intermediaries should segregate their assets from those of their clients. For thisA CCP shall be obliged to allow a client to legally identify or separate their assets at all times should they request such a level of segregation. For these reasons, CCPs should keep updated and easily identifiable records.
Amendment 203 #
Proposal for a regulation
Recital 37
Recital 37
(37) A CCP should have a sound risk management framework to manage credit risks, liquidity risks, operational and other risks, including the risks that it bears or poses to other entities as a result of interdependencies. A CCP should have adequate procedures and mechanisms in place to deal with the default of a clearing member. In order to minimise the contagion risk of such a default, the CCP should have in place stringent participation requirements, collect appropriate initial margins, maintain a default fund and other financial resources to cover potential losses. CCPs’ default management strategies should be sound, and not transfer risk to the taxpayer. In particular, liquidity arrangements, whether through commercial or central banks, should not be a substitute for their own liquidity risk mitigation strategies.
Amendment 209 #
Proposal for a regulation
Recital 42
Recital 42
(42) Interoperability arrangements are important tools for greater integration of the post-trading market within the Union, and enhancing competition in the spirit of developing the single market for financial services, and therefore, appropriate regulation should be provided for. However, interoperability arrangements may expose CCPs to additional risks. Given the additional complexities involved in an interoperability arrangement between CCPs clearing OTC derivative contracts, it is appropriate at this stage to restrict the scope of interoperability arrangements to cash securities, which did not prove to contribute to increases in systemic risk during the crisis. However, by 30 September 2014, ESMA should submit a report to the Commission on whether an extension of that scope to other financial instruments would be appropriate and report on the international progress in dismantling vertical silos.
Amendment 212 #
Proposal for a regulation
Recital 43
Recital 43
(43) Trade repositories may collect data only for regulatory purposes that are relevant to authorities in all Member State Member State or EU competent authority, and may not publish and/or otherwise make available or make use of such data, other than for the purposes of this Regulation. For creation of a comprehensive data set, single repositories per asset class may evolve on an international basis. In view of the fact that surveillance of trade repositories does not have any fiscal implications and that many authorities across Member States will need access to the data maintained by trade repositories, ESMA should assume responsibility for the registration, withdrawal and surveillance of trade repositories. in the EU and for matters of international reciprocal access.
Amendment 215 #
Proposal for a regulation
Recital 45 a (new)
Recital 45 a (new)
(45 a) There are areas within financial services and trading of derivative contracts where commercial and IP rights may also exist. In instances where these relate to products or services which have become or impact upon industry standards there shall be a requirement for licences to be available on proportionate FRAND (Fair, Reasonable and Non- Discriminatory) terms.
Amendment 225 #
Proposal for a regulation
Article 1 – paragraph 1
Article 1 – paragraph 1
1. This Regulation lays down uniform requirements for derivative contracts set out in Annex I Section C numbers (4) to (10) of Directive 2004/39/EC, and subject to any amendment and implementing measures thereto, that are traded over-the- counter and lays down uniform requirements for the performance of activities of central counterparties and trade repositories. This regulation also extends to financial derivatives of all kinds including those traded on regulated markets, MTFs or other venues insofar as specified for the purpose of maintaining a level playing field and ensuring an overview of derivative activity. (This amendment applies throughout the text.)
Amendment 231 #
Proposal for a regulation
Article 1 – paragraph 2
Article 1 – paragraph 2
2. This Regulation shall apply to central counterparties, financial counterparties and to trade repositories. It shall apply to non- financial counterparties and to branches in the Union of undertakings established outside the Union, where so provided.
Amendment 234 #
Proposal for a regulation
Article 1 – paragraph 4 – introductory part
Article 1 – paragraph 4 – introductory part
4. The clearing obligations of this Regulation shall not apply to:
Amendment 235 #
Proposal for a regulation
Article 1 – paragraph 4 – point a
Article 1 – paragraph 4 – point a
(a) the Members of the European System of Central Banks and other EU and EEA national bodies performing similar functions and other EU and EEA public bodies charged with or intervening in the management of the public debt;
Amendment 237 #
Proposal for a regulation
Article 1 – paragraph 4 – point b a (new)
Article 1 – paragraph 4 – point b a (new)
(b a) other bodies or contracts excluded in a regulatory technical standard.
Amendment 242 #
Proposal for a regulation
Article 2 – paragraph 1 – point 1
Article 2 – paragraph 1 – point 1
(1) ’central counterparty (CCP)' means an entity that legally interposes itself between the counterparties to the contracts traded within one or more financial markets, becoming the buyer to every seller for the contracts it clears and the seller to every buyer and which is responsible for the operation of a clearing system;
Amendment 244 #
Proposal for a regulation
Article 2 – paragraph 1 – point 2
Article 2 – paragraph 1 – point 2
(2) ’'trade repository' means an entity that is registered and centrally collects and maintains the records of OTC derivatives for regulatory purposes under and in accordance with this Regulation;
Amendment 248 #
Proposal for a regulation
Article 2 – paragraph 1 – point 3 a (new)
Article 2 – paragraph 1 – point 3 a (new)
(3 a) 'derivative contracts' or 'derivatives' means financial instruments as set out in Annex I Section C numbers (4) to (10) of Directive 2004/39/EC, that are not otherwise included within or excluded from the application of MiFID, including by virtue of Article 38 and 39 of Regulation n° 1287/2006. This Regulation shall not apply to financial instruments whose characteristics are predominantly those of financial instruments within the meaning of Annex I Section C (1) – (3) notwithstanding that they include incidental derivative features and which could otherwise be viewed as falling within the scope of this Regulation.
Amendment 252 #
Proposal for a regulation
Article 2 – paragraph 1 – point 4
Article 2 – paragraph 1 – point 4
(4) ’'class of derivatives' means a number of OTC derivative contracts that share sufficient common, essential characteristics to behave in the same way;
Amendment 254 #
Proposal for a regulation
Article 2 – paragraph 1 – point 5
Article 2 – paragraph 1 – point 5
(5) ’'over the counter (OTC) derivatives' means derivative contracts whose execution does not take place on a regulated market or multilateral trading facility as defined by Article 4 (1) point 14 or 15 of Directive 2004/39/EC or a third country trading facility that performs a similar function;
Amendment 266 #
Proposal for a regulation
Article 2 – paragraph 1 – point 6
Article 2 – paragraph 1 – point 6
(6) ’'financial counterparty' means investment firms as set out in authorised under Directive 2004/39/EC, credit institutions as defined in authorised under Directive 2006/48/EC, insurance undertakings as defined in authorised under Directive 73/239/EEC, assurance undertakings as defined in authorised under Directive 2002/83/EC, reinsurance undertakings as defined in authorised under Directive 2005/68/EC, undertakings for collective investments in transferable securities (UCITS) as defined inauthorised under Directive 2009/65/EC, institutions for occupational retirement provision as defined in Directive 2003/41/EC and alternative investment funds managers as defined in authorised under Directive 2010/.../EU and to branches in the Union of undertakings established outside the Union that would require to be so authorised if they were within the Union other than an investment fund whose sole investment policy is to develop or invest in physical real estate (directly or through its subsidiary entities, co-ownership or joint venture participations) or other Liability Driven Investment funds whose exemption is approved by ESMA;
Amendment 268 #
Proposal for a regulation
Article 2 – paragraph 1 – point 7 a (new)
Article 2 – paragraph 1 – point 7 a (new)
(7 a) 'group' shall mean a group of undertakings, which consists of a parent undertaking, its subsidiary undertakings and the entities in which the parent undertaking or its subsidiary undertakings hold a participating interest within the meaning of the first sentence of Article 17 of the fourth company Law directive 78/660/EEC of 25 July 1978;
Amendment 273 #
Proposal for a regulation
Article 2 – paragraph 1 – point 13 a (new)
Article 2 – paragraph 1 – point 13 a (new)
(13 a) 'third country investment firm' means an undertaking established in a third country that, if it were established in the Union would be covered by the definition of investment firm in Directive 2004/39/EC and is authorised in a third country.
Amendment 289 #
Proposal for a regulation
Article 3 – paragraph 1 – subparagraph 1
Article 3 – paragraph 1 – subparagraph 1
A financial counterparty shall clear all OTC derivative contracts which are considered eligible pursuant to Article 4 and are concluded with other financial counterparties in the relevant CCPs listed in the register as referred to in Article 4(4). (This amendment applies throughout the text.)
Amendment 298 #
Proposal for a regulation
Article 3 – paragraph 1 – subparagraph 2
Article 3 – paragraph 1 – subparagraph 2
That clearing obligation shall also apply to financial counterparties and to the non- financial counterparties referred to in Article 7(2) which enter into eligible OTC derivative contracts with third country entities. that would be subject to the clearing obligation if they were in the EU. . (The deletion of OTC in this amendment applies throughout the text.)
Amendment 309 #
Proposal for a regulation
Article 3 – paragraph 1 a (new)
Article 3 – paragraph 1 a (new)
1 a. There shall be no clearing obligation in the case of derivative contracts between subsidiary undertakings of the same parent company or between a parent company and a subsidiary undertaking. Instead such trades, where they would be subject to the clearing obligation were the counterparties not subsidiary undertakings of the same parent company or a parent company and a subsidiary undertaking, shall be subject to the risk mitigation techniques under Article 8. 'Parent companies' and 'subsidiary companies' for the purposes of this provision shall be companies thus defined under the relevant EU rules. This derogation shall not affect the reporting obligation under Article 6 or the obligations in relation to risk mitigation techniques under Article 8.
Amendment 316 #
Proposal for a regulation
Article 3 – paragraph 2
Article 3 – paragraph 2
2. For the purpose of complying with the clearing obligation under paragraph 1, financial counterparties and the non- financial counterparties referred to in Article 7(2) shall become either a clearing member or a clientshall clear their transactions in the CCP through an investment firm or credit institution subject to the requirements of Directive 2004/39/EC, or a third country investment firm, which is a client of a clearing member and which segregates in accounts with the clearing member the assets and positions of third parties for whom it is clearing transactions from its own.
Amendment 319 #
Proposal for a regulation
Article 3 – paragraph 2 a (new)
Article 3 – paragraph 2 a (new)
2 a. Derivative contracts that are objectively measurable as reducing risks directly related to the financial solvency of a pension scheme or other liability driven investment shall be excluded from the clearing obligation set out in Article 3.
Amendment 332 #
Proposal for a regulation
Article 4 – paragraph 2 – point a
Article 4 – paragraph 2 – point a
(a) whether that class of derivatives is eligible for the clearing obligation pursuant to Article 3, and if so eligible;
Amendment 336 #
Proposal for a regulation
Article 4 – paragraph 2 – point b
Article 4 – paragraph 2 – point b
(b) the date from which the clearing obligation takes effect. which shall be no earlier than six months after the date of publication of the decision under paragraph 4, and shall take into account the factors referred to in point ba;
Amendment 338 #
Proposal for a regulation
Article 4 – paragraph 2 – point b a (new)
Article 4 – paragraph 2 – point b a (new)
(b a) where relevant, the modalities associated with onset, phasing, or retrospective effect, including resulting from any time lag in establishment of CCP clearing, should take account of international consensus, legalities, practicalities and systemic relevance. ESMA may make recommendations concerning phasing for combination packages of derivatives when all elements are not eligible for clearing.
Amendment 344 #
Proposal for a regulation
Article 4 – paragraph 3 – subparagraph 1 – point a a (new)
Article 4 – paragraph 3 – subparagraph 1 – point a a (new)
(a a) the impact of the level of settlement risk;
Amendment 348 #
Proposal for a regulation
Article 4 – paragraph 3 – subparagraph 1 – point b a (new)
Article 4 – paragraph 3 – subparagraph 1 – point b a (new)
(b a) the level of standardisation of contractual and economic terms of contracts
Amendment 362 #
Proposal for a regulation
Article 4 – paragraph 3 – subparagraph 1 – point e
Article 4 – paragraph 3 – subparagraph 1 – point e
(e) level of client protecdefault management and liquidity risk mitigation provided by the CCP.
Amendment 364 #
Proposal for a regulation
Article 4 – paragraph 3 – subparagraph 1 – point e a (new)
Article 4 – paragraph 3 – subparagraph 1 – point e a (new)
(e a) cost of clearing and impact on competitiveness;
Amendment 365 #
Proposal for a regulation
Article 4 – paragraph 3 – subparagraph 1 – point e b (new)
Article 4 – paragraph 3 – subparagraph 1 – point e b (new)
(e b) convergence with international norms and standards.
Amendment 373 #
Proposal for a regulation
Article 4 – paragraph 4 – subparagraph 1
Article 4 – paragraph 4 – subparagraph 1
ESMA shall promptly publish any decision under paragraph 2 in a register. That register shall contain the eligible classes of derivatives and the CCPs authorised to clear them. ESMA shall regularly update that register and shall make public on its website.
Amendment 374 #
Proposal for a regulation
Article 4 – paragraph 4 – subparagraph 2
Article 4 – paragraph 4 – subparagraph 2
ESMA shall regularly review its decisions and shall amend them where necessary. Any decision on an amendment which increases the scope of the clearing obligation under Article 3(1) shall be subject to paragraphs 2, 2a and 2b. Any decision to amend, revoke or suspend a decision shall be subject to paragraphs 3 and 4, except that ESMA shall not be required to comply with the consultation obligations in paragraph 3 in relation to a decision to suspend a decision in order to address a threat to the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Union.
Amendment 380 #
Proposal for a regulation
Article 4 – paragraph 5
Article 4 – paragraph 5
5. ESMA shall, on its own initiative, following public consultation, and in consultation with the EBA, European Systemic Risk Board (ESRB), and the relevant competent authorities identify and notify to the Commission the classes of derivatives contracts that should be eligible for the obligation to clear and included in its public register, but for which no CCP has yet received authorisation.
Amendment 382 #
Proposal for a regulation
Article 4 – paragraph 5 a (new)
Article 4 – paragraph 5 a (new)
5 a. A class of derivatives shall cease to be considered eligible for the clearing obligation if there is no longer a CCP which is authorised or recognised by ESMA as authorised to clear them under this Regulation, or if no CCP is willing to clear that class of derivatives.
Amendment 386 #
Proposal for a regulation
Article 4 – paragraph 6 – subparagraph 1 a (new)
Article 4 – paragraph 6 – subparagraph 1 a (new)
The specification of the criteria referred to in paragraph 3 may determine that the clearing obligation in Article 3(1) shall not apply to particular classes of foreign exchange derivative contracts where the predominant element of counterparty credit risk relates to settlement risk, and where such risk is already addressed by existing infrastructure arrangements.
Amendment 396 #
Proposal for a regulation
Article 5 – paragraph 1
Article 5 – paragraph 1
A CCP that has been authorised to clear eligible OTC derivativea class of derivatives considered eligible pursuant to Article 4 (including any third countractsy CCPs recognised by ESMA as authorised to clear that class under article 23) shall accept clearing such contracts on a non- discriminatory basis, regardless of the venue of execution, transparent and objective basis, with regard to both pricing and technology provisions in accordance with international communication protocols, regardless of the venue of execution, inasmuch as this does not compromise the smooth and orderly functioning of the market.
Amendment 409 #
Proposal for a regulation
Article 5 – paragraph 1 a (new)
Article 5 – paragraph 1 a (new)
1 a. The CCP shall provide a clear negative or positive response to the trading venue requesting authorisation to clear a derivative contract within three months of processing their request. In the event of a CCP refusal to clear a derivative contract from a trading venue, clear and full reasons shall be given to the trading venue, this shall not prevent the trading venue from submitting a new request for clearing a derivative contract after three months following the original refusal. CCPs shall be required to publish on regular basis a clear timeline for implementation of contracts which trading venues request to clear, which shall not exceed 3 months from a positive decision to an access request. The CCP shall establish policies and procedures sufficient to ensure compliance with these obligations under paragraph 1, including: a) accounting separately for the costs and revenues relating to the provision of CCP services and disclosing such information to their Competent Authorities on the basis of accounting standards adopted under Regulation (EC) No 1606/2002 b) using or accommodating in their systems the relevant international communication procedures and standards for messaging and reference data; c) Publishing on a public website and keeping updated on a regular basis, the operational and technical requirements which trading venues must comply with when accessing a CCP.
Amendment 410 #
Proposal for a regulation
Article 5 – paragraph 1 b (new)
Article 5 – paragraph 1 b (new)
1 b. A CCP shall have the right to non- discriminatory access to the data of any particular trading venue and access to any relevant settlement system that it needs for the performance of its duties, inasmuch as this does not compromise the smooth and orderly functioning of the market.
Amendment 411 #
Proposal for a regulation
Article 5 – paragraph 1 c (new)
Article 5 – paragraph 1 c (new)
1 c. For the purpose of the reports to the Commission and the Parliament referred to in Article 68, ESMA shall monitor access to CCPs, and the effects on competitiveness of certain practices, including the use of exclusive licensing practices.
Amendment 414 #
Proposal for a regulation
Article 6 – paragraph 1 – subparagraph 1
Article 6 – paragraph 1 – subparagraph 1
Financial counterparties and non-financial counterparties under Article 7 (2) shall report to a trade repository registered in accordance with Article 51 the details of any OTC derivative contract they have entered into and any material modification or termination of that contract. The details shall be reported no later than the working day following the execution, clearing, or modification, novation or termination of the contract.
Amendment 427 #
Proposal for a regulation
Article 6 – paragraph 1 – subparagraph 2
Article 6 – paragraph 1 – subparagraph 2
Amendment 428 #
Proposal for a regulation
Article 6 – paragraph 1 – subparagraph 2 a (new)
Article 6 – paragraph 1 – subparagraph 2 a (new)
All reporting shall be carried out in accordance with international industry open standards.
Amendment 444 #
Proposal for a regulation
Article 6 – paragraph 3 – subparagraph 2
Article 6 – paragraph 3 – subparagraph 2
A counterparty that reports the full details of a contract to a trade repository on behalf of another counterparr competent authority shall not be considered in breach of any restriction on disclosure of information imposed by that contract or by any legislative, regulatory or administrative provision.
Amendment 447 #
Proposal for a regulation
Article 6 – paragraph 4 – subparagraph 1
Article 6 – paragraph 4 – subparagraph 1
Powers are delegated to the Commission to determine the details and type of the reports referred to in paragraphs 1 and 2 for the different classes of, groups, or categories of derivatives and for any retrospective effect including the modalities for backloading and reporting of electronically recorded trades for all derivatives.
Amendment 450 #
Proposal for a regulation
Article 6 – paragraph 4 – subparagraph 1 a (new)
Article 6 – paragraph 4 – subparagraph 1 a (new)
In the exercise of this power, the Commission shall have regard to specifying the purpose and adaptation to interrogation of data.
Amendment 459 #
Proposal for a regulation
Article 6 – paragraph 4 – subparagraph 4
Article 6 – paragraph 4 – subparagraph 4
ESMA, in accordance with EBA, EIOPA and the ESRB, shall develop draft regulatory technical standards for submission to the Commission by 30 June 2012.
Amendment 465 #
Proposal for a regulation
Article 6 – paragraph 5 – subparagraph 2
Article 6 – paragraph 5 – subparagraph 2
ESMA, in coordination with EBA, EIOPA and the ESRB, shall develop draft implementing technical standards for submission to the Commission by 30 June 2012.
Amendment 466 #
Proposal for a regulation
Article 7 – paragraph 1 – subparagraph 1
Article 7 – paragraph 1 – subparagraph 1
Amendment 471 #
Proposal for a regulation
Article 7 – paragraph 1 – subparagraph 2
Article 7 – paragraph 1 – subparagraph 2
Amendment 476 #
Proposal for a regulation
Article 7 – paragraph 2 – subparagraph 1
Article 7 – paragraph 2 – subparagraph 1
Where a non-financial counterparty takes positions in OTC derivative contracts, which, at the time the position is taken, exceeding the clearing threshold to be determined pursuant to paragraph 3(b), it shall be subject to the clearing obligation set out in Article 3 with regard to all its eligible OTC derivative contracts.
Amendment 486 #
Proposal for a regulation
Article 7 – paragraph 3 – subparagraph 1 – introductory part
Article 7 – paragraph 3 – subparagraph 1 – introductory part
Powers are delegated to the Commission to adopt a regulatory technical standards specifying:
Amendment 496 #
Proposal for a regulation
Article 7 – paragraph 3 – subparagraph 2
Article 7 – paragraph 3 – subparagraph 2
Thoseis thresholds shall be determined taking into account the systemic relevance of the sum of net positions and exposures by counterparty per class of derivatives.
Amendment 498 #
Proposal for a regulation
Article 7 – paragraph 3 – subparagraph 3
Article 7 – paragraph 3 – subparagraph 3
The regulatory standards referred to in the first subparagraph shall be adopted in accordance with Articles [710 to 7d]14 of Regulation …/… [ESMA Regulation](EU) No .../2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority).
Amendment 502 #
Proposal for a regulation
Article 7 – paragraph 3 – subparagraph 4
Article 7 – paragraph 3 – subparagraph 4
ESMA, in consultation with the EBA, the European Systemic Risk Board ("ESRB") and other relevant authorities, shall submit drafts for thoseat regulatory standards to the Commission by 30 June 2012 at the latest.
Amendment 503 #
Proposal for a regulation
Article 7 – paragraph 3 – subparagraph 4 a (new)
Article 7 – paragraph 3 – subparagraph 4 a (new)
A non-financial counterparty subject to clearing obligation may apply to its competent authority to no longer be subject to clearing obligation if it can demonstrate its transactions and business model are such that it is not projected to exceed the threshold on a regular basis. This does not over-ride re-entry to clearing should the threshold subsequently be exceeded again for a period of 90 days. (To go with am 53 of the Langen report.)
Amendment 506 #
Proposal for a regulation
Article 7 – paragraph 4
Article 7 – paragraph 4
4. In calculating the positions referred to in paragraph 2 and in determining what constitutes to be an indentified eligible contract, OTC derivative contracts entered into by a non-financial counterparty that are objectively measurable as reducing risks directly linkrelated to the commercial or treasury financing activity of that counterparty shall not be taken into account.
Amendment 511 #
Proposal for a regulation
Article 7 – paragraph 4 a (new)
Article 7 – paragraph 4 a (new)
4 a. The underlying commercial risk or treasury financing activity of a non- financial counterparty shall be considered to be objectively measured on the basis of reasonable assurance in an annual audit and any irregularities reported by the auditor to the competent authority. The national competent authority shall have accessible, transparent and fair rules for the timely handling of appeals.
Amendment 513 #
Proposal for a regulation
Article 7 – paragraph 5
Article 7 – paragraph 5
5. The Commission, in consultation with ESMA, EBA, ESRB and other relevant authorities, shall periodically review the thresholds established in paragraph 3 and amend them, where necessary.
Amendment 518 #
Proposal for a regulation
Article 8 – paragraph 1 – subparagraph 1 – point a
Article 8 – paragraph 1 – subparagraph 1 – point a
(a) where possible, electronic means ensuring the timely confirmation of the terms of the OTC derivative contract and robust processes for timely identification, resolution, and correction of any booking inaccuracies;
Amendment 526 #
Proposal for a regulation
Article 8 – paragraph 1 – subparagraph 2
Article 8 – paragraph 1 – subparagraph 2
For the purposes of point (b), the value of outstanding contracts shall be marked-to- market on a daily basis and risk management procedures shall require the timely, and accurate and appropriately segregated exchange of collateral or the appropriate and proportionate holding of capital. exchange of an appropriate amount of collateral or compliance with proportionate regulatory capital requirements, in each case where appropriate and in respect of the net exposures between the parties. Financial counterparties and the non- financial counterparties referred to in Article 7(2) must offer counterparties the option of segregation of initial margin at the outset of the contract.
Amendment 532 #
Proposal for a regulation
Article 8 – paragraph 1 a (new)
Article 8 – paragraph 1 a (new)
1 a. Where it is demonstrated that the standards and resilience of collateralisation including daily margining and automated collateral movements are comparable to those on CCPs, capital requirements in prudential regulation should be in line with those of centrally cleared contracts.
Amendment 533 #
Proposal for a regulation
Article 8 – paragraph 1 b (new)
Article 8 – paragraph 1 b (new)
1 b. For pension scheme investments under IORP or a scheme where the law of the Member State recognises the scheme for retirement planning, resilient bilateral collateralisation of derivatives used for risk mitigation may take account of counterparty creditworthiness. Capital requirements in prudential regulation should be in line with those of centrally cleared contracts.
Amendment 540 #
Proposal for a regulation
Article 9 – paragraph 1
Article 9 – paragraph 1
1. Member States shall lay down the rules on penalties applicable to infringements of the rules under this Title by persons established in or acting through a branch in their territory, and shall take all measures necessary to ensure that they are implemented. Those penalties shall include at least administrative fines. The penalties provided for shall be effective, proportionate and dissuasive, and take account of the steps taken to ensure compliance.
Amendment 547 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 1
Article 10 – paragraph 1 – subparagraph 1
Where a CCP that is a legal person established in the Union and has access to adequate liquidity intends to perform its services and activities, it shall apply for authorisation to the competent authority of the Member State where it is established.
Amendment 549 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 2
Article 10 – paragraph 1 – subparagraph 2
Amendment 568 #
Proposal for a regulation
Article 13 – paragraph 1
Article 13 – paragraph 1
1. The competent authority shall only grant authorisation where it is fully satisfied that the applicant CCP complies with all the requirements set out in this Regulation, the requirements adopted pursuant to Directive 98/26/EC, and following the joint positivwith regard to the opinion of othe colleger regulators referred to in Article 15 and the opinion of ESMA.
Amendment 575 #
Proposal for a regulation
Article 14 – title
Article 14 – title
Collegesoperation
Amendment 576 #
Proposal for a regulation
Article 14 – paragraph 1 – subparagraph 1
Article 14 – paragraph 1 – subparagraph 1
The competent authority of the Member State of establishment of a CCP shall establish and chair a college to facilitate the exercise ofbe responsible for undertaking the tasks referred to in Articles 10, 11, 46 and 48. in consultation with:
Amendment 581 #
Proposal for a regulation
Article 14 – paragraph 1 – subparagraph 2 – point b
Article 14 – paragraph 1 – subparagraph 2 – point b
(b) the competent authority of the Member State of establishment of the CCPEBA;
Amendment 589 #
Proposal for a regulation
Article 14 – paragraph 2 – introductory part
Article 14 – paragraph 2 – introductory part
2. The college shall, without prejudice to the responsibilities of mpetent authority of the Member State of establishment of a CCP shall in cooperation with, the other competent authorities under this Regulation, ensure:
Amendment 591 #
Proposal for a regulation
Article 14 – paragraph 2 – point c
Article 14 – paragraph 2 – point c
Amendment 594 #
Proposal for a regulation
Article 14 – paragraph 3 – subparagraph 1
Article 14 – paragraph 3 – subparagraph 1
The establishment and functioning of the college shall be based on a written agreement between all its membersdetails of the cooperation between competent authorities and ESMA shall be laid down in a written agreement.
Amendment 596 #
Proposal for a regulation
Article 14 – paragraph 3 – subparagraph 2
Article 14 – paragraph 3 – subparagraph 2
That agreement shall determine the practical arrangements for the functioning of the collegecooperation between competent authorities and ESMA and may determine tasks to be entrusted to the competent authority of the Member State of establishment of a CCP or another member of the collegecompetent authority.
Amendment 599 #
Proposal for a regulation
Article 15 – title
Article 15 – title
Amendment 601 #
Proposal for a regulation
Article 15 – paragraph 1 – subparagraph 1
Article 15 – paragraph 1 – subparagraph 1
The competent authority of the Member State where the CCP is established shall conduct a risk assessment of the CCP and submit a report to the collegeESMA.
Amendment 604 #
Proposal for a regulation
Article 15 – paragraph 1 – subparagraph 2
Article 15 – paragraph 1 – subparagraph 2
Amendment 606 #
Proposal for a regulation
Article 15 – paragraph 2
Article 15 – paragraph 2
2. ESMA shall facilitate the adoption of a joint opinion in accordance with its settlement of disagreement powers under Article 11 of Regulation …/… [ESMA Regulation] and its general coordination function under Article 16 of the same Regulation. It shall have no voting rights on joint opinions of the collegemay, in so far as is necessary, request opinions from other national competent authorities and the central banks of the principal currencies of the financial instruments cleared. A competent authority requested to provide an opinion would be required to provide an assessment of compliance with this Regulation, by a CCP operating in its jurisdiction.
Amendment 609 #
Proposal for a regulation
Article 15 – paragraph 2 – subparagraph 1 (new)
Article 15 – paragraph 2 – subparagraph 1 (new)
ESMA shall involve competent authorities from those Member Stares in which a CPP is operating in preparing advice on the authorisation and reviewing ongoing compliance with this Regulation.
Amendment 610 #
Proposal for a regulation
Article 15 – paragraph 2 a (new)
Article 15 – paragraph 2 a (new)
2 a. Competent authorities requested to provide an opinion under this Article, or under Article 14, do not have the power to veto a decision to grant or deny authorisation to a CCP by the competent authority of the Member State of establishment. In the case of diverging views between authorities from different Member States, the competent authority of the Member State of establishment should provide full reasons for decisions made and for any differences of opinion.
Amendment 613 #
Proposal for a regulation
Article 16 – paragraph 1 – point c
Article 16 – paragraph 1 – point c
(c) where the CCP is no longer in compliance with the conditions under which authorisation was granted and has not taken measures to implement remedial action in a timely manner;
Amendment 616 #
Proposal for a regulation
Article 16 – paragraph 2
Article 16 – paragraph 2
2. ESMA and any other member of the college may, at any time, request that the competent authority of the Member State where the CCP is established examine whether the CCP is still in compliance with the conditions under which the authorisation is granted.
Amendment 627 #
Proposal for a regulation
Article 18 – paragraph 3 a (new)
Article 18 – paragraph 3 a (new)
3 a. The Commission, with the assistance of ESMA, shall verify that the administrative penalties referred to in paragraph 3 are effectively and consistently applied.
Amendment 631 #
Proposal for a regulation
Article 20 – paragraph 3
Article 20 – paragraph 3
3. Without prejudice to cases covered by criminal law, the competent authorities, ESMA, bodies or natural or legal persons other than competent authorities which receive confidential information pursuant to this Regulation may use it only in the performance of their duties and for the exercise of their functions, in the case of the competent authorities, within the scope of this Regulation or, in the case of other authorities, bodies or natural or legal persons, for the purpose for which such information was provided to them or in the context of administrative or judicial proceedings specifically related to the exercise of those functions, or both. Where ESMA, the competent authority or other authority, body or person communicating information consents thereto, the authority receiving the information may use it for other purposes.
Amendment 634 #
Proposal for a regulation
Article 20 – paragraph 4 – subparagraph 1
Article 20 – paragraph 4 – subparagraph 1
Any confidential information received, exchanged or transmitted pursuant to this Regulation shall be subject to the conditions of professional secrecy laid down in paragraphs 1, 2 and 3. , and such information may only be used, including by competent authorities, ESMA, CCPs trade repositories, bodies or other natural or legal persons for the purposes of this Regulation.
Amendment 636 #
Proposal for a regulation
Article 21 – paragraph 2
Article 21 – paragraph 2
2. Competent authorities and other bodies or natural and legal persons receiving confidential information in the exercise of their duties under this Regulation shall only use it in the course of their duties and shall not be permitted to publish and/or otherwise make available any such confidential information (or any derivative thereof) for any other purpose except as expressly set out in this Regulation.
Amendment 642 #
Proposal for a regulation
Article 23 – paragraph 1
Article 23 – paragraph 1
1. A CCP established in a third country may provide clearing services to entities established in the Union only where that CCP is recognised by the Commission, following a request from ESMA.
Amendment 646 #
Proposal for a regulation
Article 23 – paragraph 2 – introductory part
Article 23 – paragraph 2 – introductory part
2. ESMA shall recognisequest the recognition of a CCP from a third country, only where the following conditions are met:
Amendment 649 #
Proposal for a regulation
Article 23 – paragraph 2 – point a
Article 23 – paragraph 2 – point a
(a) the Commission has adopted a Decision in accordance withCP has met the criteria set out in paragraph 3;
Amendment 659 #
Proposal for a regulation
Article 23 – paragraph 3
Article 23 – paragraph 3
3. TPowers are delegated to the Commission mayto adopt a Decision in accordance with the procedure referred to in Article 69(2), determinregulatory technical standards concerning: (a) the criteria for establishing that the legal and supervisory arrangements of a third country ensure that CCPs authorised in that third country comply with legally binding requirements which are equivalent to the requirements resulting from this Regulation and; (b) the criteria for establishing that these CCPs are subject to effective supervision and enforcement in that third country on an ongoing basis.
Amendment 662 #
Proposal for a regulation
Article 23 – paragraph 3 – subparagraph 1 (new)
Article 23 – paragraph 3 – subparagraph 1 (new)
The regulatory technical standards referred to in the first subparagraph shall be adopted in accordance with Articles 10 to 14 of Regulation (EU) No .../2010 [ESMA Regulation].
Amendment 663 #
Proposal for a regulation
Article 23 – paragraph 3 – subparagraph 2 (new)
Article 23 – paragraph 3 – subparagraph 2 (new)
ESMA shall submit drafts for those regulatory standards to the Commission by 30th June 2012 at the latest.
Amendment 664 #
Proposal for a regulation
Article 23 – paragraph 3 a (new)
Article 23 – paragraph 3 a (new)
3 a. In the event that the Commission decides not to recognise a CCP it shall inform ESMA, the European Parliament and the Council stating its reasons. Where appropriate, the European Parliament or the Council may invite the responsible Commissioner, together with the Chairperson of ESMA, within one month of the notice referred to in the first subparagraph, for an ad hoc meeting of the competent committee of the European Parliament or the Council to present and explain their differences, unless such disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties concerned.
Amendment 672 #
Proposal for a regulation
Article 24 – paragraph 8
Article 24 – paragraph 8
8. The CCP shall be subject to frequent and independent audits. The results of these audits shall be communicated to the board and made available to the competent authority and shall clearly distinguish costs and revenues relating to CCP services.
Amendment 684 #
Proposal for a regulation
Article 25 – paragraph 2 a (new)
Article 25 – paragraph 2 a (new)
2 a. The Member State competent authorities in which the CCP is located shall ensure thorough and intrusive checks concerning the suitability of the senior management and members of the board and all those whose professional activities have a material impact on the risk profile of a CCP, to ensure that they are fit and proper.
Amendment 691 #
Proposal for a regulation
Article 26 – paragraph 2
Article 26 – paragraph 2
2. A CCP shall clearly determine the mandate, the governance arrangements to ensure its independence, the operational procedures, the admission criteria and the election mechanism for risk committee members who, prior to selection, shall be subject to thorough and intrusive checks by the competent authority to ensure they are fit and proper to perform their functions. The governance arrangements shall be publicly available and shall, at least, determine that the risk committee is chaired by an independent member of the board, reports directly to the board and holds regular meetings.
Amendment 710 #
Proposal for a regulation
Article 29 – paragraph 1 – subparagraph 2
Article 29 – paragraph 1 – subparagraph 2
Where the conduct of a member of the board is likely to be prejudicial to the sound and prudent management of the CCP, the competent authority shall take appropriateffective measures, including where appropriate removing that member from the board.
Amendment 730 #
Proposal for a regulation
Article 32 a (new)
Article 32 a (new)
Article 32a Straight Through Processing 1. With the aim of promoting straight- through processing (STP) across the entire transaction flow, CCPs shall use or accommodate in their systems to the participants and market infrastructures they interface with, in their communication procedures with participants and with the market infrastructures they interface with, the relevant international communication procedures and standards for messaging and reference data in order to facilitate efficient clearing and settlement across systems. 2. Powers are delegated to the Commission to adopt regulatory technical standards specifying the process for defining which international communication procedures and standards for messaging and reference data are to be considered relevant for the purposes of paragraph 1. The regulatory technical standards referred to in the first subparagraph shall be adopted in accordance with Articles [x] of Regulation EU 1095/2010 [ESMA Regulation]. ESMA shall submit drafts for those regulatory technical standards to the Commission by 30 June 2012]
Amendment 736 #
Proposal for a regulation
Article 33 – paragraph 1 – point h
Article 33 – paragraph 1 – point h
(h) when required, and without prejudice to the responsibility of the CCP for compliance, the service provider cooperates with the competent authority in connection with the outsourced activities;
Amendment 737 #
Proposal for a regulation
Article 33 – paragraph 1 – point i
Article 33 – paragraph 1 – point i
(i) the service provider protects any sensitive and confidential information relating to the CCP and its clearing members and clients, and is established in a country recognised as having appropriate data protection standards.
Amendment 742 #
Proposal for a regulation
Article 34 – paragraph 2
Article 34 – paragraph 2
2. A CCP shall have accessible, transparent and fair rules for the timely handling of complaints.
Amendment 753 #
Proposal for a regulation
Article 36 – paragraph 3 a (new)
Article 36 – paragraph 3 a (new)
3 a. A CCP shall publicly disclose the operational and technical requirements related to the communication protocols covering content and message formats it uses to interact with third-parties, including those referred to in Article 5.
Amendment 756 #
Proposal for a regulation
Article 37 – paragraph 1
Article 37 – paragraph 1
1. A CCP shall keep records and accounts that shall enable it, at any time and without delay, to identify and segregateclearly in accounts with the CCP, the assets and positions held for the account of one clearing member from the assets and positions held for the account of any other clearing member and from its own assets. Where a CCP deposits assets and funds with a third party, it shall ensure that collateral provided by a clearing member by way of a security financial collateral arrangement are kept separately from the assets and funds belonging to the CCP, other clearing members and from assets and funds belonging to that third party.
Amendment 766 #
Proposal for a regulation
Article 37 – paragraph 2
Article 37 – paragraph 2
2. A CCP shall require each clearing member to distinguish and segregatekeep records and accounts enabling each clearing member to identify clearly in accounts with the CCP the assets, funds and positions held for the account of that clearing member from those of its clients. A CCP shall allow clients to have a more detailed segregation of their assets and positions. The CCP shall publicly disclose the risks and costs associated with the different levels of segregationheld for the account of the clearing member's clients.
Amendment 777 #
Proposal for a regulation
Article 37 – paragraph 3
Article 37 – paragraph 3
3. DA clearing member shall, depending on the level of segregation chosen by a client, the CCP shallrvice agreed with the client, ensure that it is able to transfer on request at a pre-defined trigger event, without assets and funds belonging to a client are legally segregated from the assets and funds belonging to other conslients of the clearing member and within a pre-defined transfer period its assets and positions to another clearing member. That other c("full segregation"), or provide client omnibus accounts that provide the same level of legal protection as full segregation ("legally segregated omnibus accounts"). Clearing members shall only be obliged where it has previously entered into a contractual relationship for that purposeffer full segregation or legally segregated omnibus accounts to their clients under commercially reasonable terms.
Amendment 785 #
Proposal for a regulation
Article 37 – paragraph 3 a (new)
Article 37 – paragraph 3 a (new)
3 a. The CCP and clearing member shall publically disclose the levels of protection and the costs associated with the different levels of segregation they provide. Details of the different levels of segregation shall include a description of the main legal implications of the respective levels of segregation offered including information on the relevant jurisdictions' applicable insolvency law.
Amendment 790 #
Proposal for a regulation
Article 37 – paragraph 4
Article 37 – paragraph 4
4. Provided that the client is not exposed to the default of the clearing member through which it has access to the CCP or of any other clientshas selected full segregation, and has concluded a contract, Annex III, Part 2, point 6 of Directive 2006/48/EC shall apply.
Amendment 792 #
Proposal for a regulation
Article 37 – paragraph 4 a (new)
Article 37 – paragraph 4 a (new)
4 a. A CCP shall offer clearing members and where relevant, clients the possibility to provide, at their discretion, their initial margin either via title transfer collateral arrangement or via security interest collateral arrangement. Clearing members shall offer corresponding possibilities to their clients.
Amendment 798 #
Proposal for a regulation
Article 38 – paragraph 1
Article 38 – paragraph 1
A CCP shall measure and assess its liquidity and credit exposures to each clearing member and, where relevant, to another CCP with whom it has concluded an interoperable arrangement, on a near to real time basis. A CCP should, to the extent practicable, identify, monitor and manage the potential risks arising from clearing members clearing transactions on behalf of clients. A CCP shall have access in a timely manner and on a non discriminatory basis to the relevant pricing sources to effectively measure its exposures.
Amendment 803 #
Proposal for a regulation
Article 39 – paragraph 1
Article 39 – paragraph 1
1. A CCP shall impose, call and collect, or secure, margins to limit its credit exposures from its clearing members, and where relevant, from CCPs which have interoperable arrangements. Such margins shall be sufficient to cover potential exposures that the CCP estimates will occur until the liquidation of the relevant positions. They shall be sufficient to cover losses that result from at least 99 per cent of the exposures movements over an appropriate time horizon and they shall ensure that a CCP fully collateralises its exposures with all its clearing members, and where relevant with CCPs which have interoperable arrangements, at least on a daily basis.
Amendment 808 #
Proposal for a regulation
Article 39 – paragraph 2
Article 39 – paragraph 2
2. A CCP shall adopt models and parameters in setting its margin requirements that capture the risk characteristics of the products cleared and take into account the interval between margin collections, market liquidity and the possibility of changes over the duration of the transaction. The models and parameters shall be independently validated by the competent authority and subject to a jointn opinion of the collegeESMA referred to in Article 15.
Amendment 811 #
Proposal for a regulation
Article 39 – paragraph 3
Article 39 – paragraph 3
3. A CCP shall call and collect, or secure, margins on an intraday basis, at minimum when pre- defined thresholds are breached.
Amendment 817 #
Proposal for a regulation
Article 39 – paragraph 4
Article 39 – paragraph 4
4. A CCP shall segregate the margins postowned by each clearing member and, where relevant, by CCPs that have interoperable arrangements and shall ensure the protection of the margins posted against the default of other clearing members, the institution where they are deposited, or of the CCP itself and from any other loss the CCP may experience.
Amendment 823 #
Proposal for a regulation
Article 39 – paragraph 5 – subparagraph 1
Article 39 – paragraph 5 – subparagraph 1
Powers are delegated to the Commission to adopt regulatory technical standards specifying the appropriate percentage and time horizon, and the appropriate mechanisms for collecting and securing margin, as referred to in paragraph 1, to be considered for the different classes of financial instruments.
Amendment 827 #
Proposal for a regulation
Article 39 – paragraph 5 – subparagraph 3
Article 39 – paragraph 5 – subparagraph 3
ESMA, in consultationjointly with EBA, shall submit drafts for those regulatory technical standards to the Commission by 30 June 2012.
Amendment 829 #
Proposal for a regulation
Article 40 – paragraph 1
Article 40 – paragraph 1
1. A CCP shall maintain a default fund to cover lossesTo further limit its credit exposures to its clearing members, a CCP shall maintain a default fund to cover losses that exceed the losses to be covered by margin requirements as referred to in Article 39, arising from the default, including the opening of an insolvency procedure, of one or more clearing members.
Amendment 830 #
Proposal for a regulation
Article 40 – paragraph 2
Article 40 – paragraph 2
2. A CCP shall establish the minimum size of contributions to the default fund and the criteria to calculate the contributions of the single clearing members. The contributions shall be proportional to the exposures of each clearing member, in order to ensure that the contributions to the default fund at least enable the CCP to withstand the default of the clearing member to which it has the largest exposures or of the second and third largest clearing members, if the sum of their exposures is larginitial margin contribution of each clearing member.
Amendment 837 #
Proposal for a regulation
Article 41 – paragraph 1
Article 41 – paragraph 1
1. In addition to the capital required in Article 12, a CCP shall maintain sufficient available financial resources to cover potential losses that exceed the losses to be covered by margin requirements and the default fund. Such resources may include any other clearing fund provided by clearing members or other parties, loss sharing arrangements, insurance arrangements, the own funds of a CCP, parental guarantees or similar provisions. Such resources shall be freely available to the CCP and shall not be used to cover the operating losses. The own funds shall be proportionate to the risks shared by the CCP and others underwriting risk.
Amendment 844 #
Proposal for a regulation
Article 41 a (new)
Article 41 a (new)
Article 41a Liquidity risk controls 1. A CCP shall at all times have access to adequate liquidity to perform its services and activities. To that end, it shall obtain the necessary cash, highly liquid collateral, credit lines or similar arrangements to cover its liquidity needs in case the financial resources at its disposal are not immediately available. Each clearing member, parent undertaking or subsidiary of the clearing member may not provide more than 25 per cent of the credit lines needed by the CCP. A CCP shall measure on a daily basis its potential liquidity needs. 2. The liquidity arrangements referred to in paragraph 1 shall at all times enable the CCP to cover potential liquidity requirements in extreme but plausible market conditions with a high degree of confidence. A CCP should determine and test the sufficiency of its liquidity arrangements through regular and rigorous stress testing, including consideration of other entities that might pose material liquidity risks to a CCP. 3. A CCP should have clear and transparent rules and procedures to address unforeseen and potentially uncovered liquidity shortfalls. A CCP’s rules and procedures should also indicate its process to replenish any liquidity resources it may employ during a stress event, so that it can continue to operate in a safe and sound manner.
Amendment 847 #
Proposal for a regulation
Article 42 – paragraph 3
Article 42 – paragraph 3
3. A CCP shall use contributions to the default fund and other contributions of non-defaulting clearing members only after having exhausted the contributions of the defaulting clearing member and, where relevant, the CCP's own funds referred to in Article 41(1).
Amendment 848 #
Proposal for a regulation
Article 42 – paragraph 4
Article 42 – paragraph 4
4. A CCP shall not be allowed to use the margins posted by non-defaulting clearing members to cover the losses resulting from the default of another clearing member. A CCP shall not be allowed to use the margins collected or secured from a client that chooses full segregation or omnibus segregation to cover the losses resulting from the default of any clearing member, except in the case of that client's own default.
Amendment 866 #
Proposal for a regulation
Article 44 – paragraph 2
Article 44 – paragraph 2
2. Financial instruments posted as margins shall be deposited with operators of securities settlement systems, or other highly secure arrangements with authorised financial institutions, that ensure non-discriminatory access to CCPs and the full protection of those instruments. A CCP shall have prompt access to the financial instruments when required.
Amendment 872 #
Proposal for a regulation
Article 45 – paragraph 1
Article 45 – paragraph 1
1. A CCP shall have detailed procedures in place to be followed where a clearing member does not comply with the requirements laid down in Article 35 within the time limit and according to the procedures established by the CCP. The CCP shall outline in detail the procedures to be followed in the event the insolvency of a clearing member is not established by the CCP. These procedures shall be reviewed annually.
Amendment 884 #
Proposal for a regulation
Article 47 – paragraph 1
Article 47 – paragraph 1
1. A CCP shall, where available and practical, use central bank money to settle its transactions. Where central bank money is not accessible, steps shall be taken to strictly limit credit and liquidityash settlement risks.
Amendment 888 #
Proposal for a regulation
Article 48 – paragraph 1 – subparagraph 1 (new)
Article 48 – paragraph 1 – subparagraph 1 (new)
In order not to expose CCPs to additional risks interoperable arrangements shall be restricted to transferable securities and money-market instruments, as defined under Article 4(1) point 18 (a) and (b) and point 19 of Directive 2004/39/EC for the purposes of this Regulation.
Amendment 893 #
Proposal for a regulation
Article 48 a (new)
Article 48 a (new)
Article 48a CCP access to trade feeds 1. A CCP shall have the right to non- discriminatory access to the data feed of any particular trading venue and access to any relevant settlement system that it needs for the performance of its duties 2. For the purpose of the reports to the Commission and the Parliament referred to in Article 68, ESMA shall monitor access to CCPs, and the effects on competitiveness of certain practices, including the use of exclusive licensing practices.
Amendment 909 #
Proposal for a regulation
Article 55 – paragraph 4 a (new)
Article 55 – paragraph 4 a (new)
Amendment 916 #
Proposal for a regulation
Article 56 – paragraph 2 a (new)
Article 56 – paragraph 2 a (new)
2 a. In the event that the Commission decides not to impose a fine, it shall inform ESMA, the European Parliament and the Council, stating its reasons. Where appropriate, the European Parliament or the Council may invite the responsible Commissioner, together with the Chairperson of ESMA, within one month of the notice referred to in the first subparagraph, for an ad hoc meeting of the competent committee of the European Parliament or the Council to present and explain their differences, unless such disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties concerned.
Amendment 923 #
Proposal for a regulation
Article 63 – paragraph 1
Article 63 – paragraph 1
1. A trade repository established in a third country may provide its services and activities to entities established in the Union for the purposes of Article 6 only where that trade repository is recognised by the Commission, following a request from ESMA.
Amendment 924 #
Proposal for a regulation
Article 63 – paragraph 2 – introductory part
Article 63 – paragraph 2 – introductory part
2. ESMA shall recognisequest the recognition of a trade repository from a third country, only where the following conditions are met:
Amendment 925 #
Proposal for a regulation
Article 63 – paragraph 2 – point b
Article 63 – paragraph 2 – point b
(b) the Commission has adopted a Decision in accordance withtrade repository has met the criteria set out in paragraph 3;
Amendment 929 #
Proposal for a regulation
Article 63 – paragraph 3
Article 63 – paragraph 3
3. TPowers are delegated to the Commission mayto adopt a Decision in accordance with the procedure referred to in Article 69(2), determinregulatory technical standards concerning: (a) the criteria for establishing that the legal and supervisory arrangements of a third country ensure that trade repositories authorised in that third country comply with legally binding requirements which are equivalent to the requirements set out in this Regulation and; (b) the criteria for establishing that these trade repositories are subject to effective supervision and enforcement in that third country on an ongoing basis.
Amendment 931 #
Proposal for a regulation
Article 63 – paragraph 3 – subparagraph 1 (new)
Article 63 – paragraph 3 – subparagraph 1 (new)
The regulatory technical standards referred to in the first subparagraph shall be adopted in accordance with Articles 10 to 14 of Regulation(EU) No .../2010 [ESMA Regulation]. ESMA shall submit drafts for those regulatory technical standards to the Commission by 30 June 2012 at the latest.
Amendment 932 #
Proposal for a regulation
Article 63 – paragraph 3 a (new)
Article 63 – paragraph 3 a (new)
3 a. In the event that the Commission decides not to recognise a trade repository, it shall inform ESMA, the European Parliament and the Council, stating its reasons. Where appropriate, the European Parliament or the Council may invite the responsible Commissioner, together with the Chairperson of ESMA, within one month of the notice referred to in the first subparagraph, for an ad hoc meeting of the competent committee of the European Parliament or the Council to present and explain their differences, unless such disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties concerned.
Amendment 934 #
Proposal for a regulation
Article 64 – paragraph 1
Article 64 – paragraph 1
1. A trade repository shall have robust governance arrangements, which include a clear organisational structure with well defined, transparent and consistent lines of responsibility and adequate internal control mechanisms, including sound administrative and accounting procedures, which prevent theany disclosure of confidential information.
Amendment 936 #
Proposal for a regulation
Article 64 – paragraph 4
Article 64 – paragraph 4
4. The senior management and members of the board of a trade repository shall be of sufficiently good repute and experience so as to ensure the sound and prudent management of the trade repositoryIn order to ensure the sound and prudent management of the trade repository, the senior management and members of the board of a trade repository shall be subject to thorough and intrusive checks prior to ensure they are of sufficiently good repute, expertise and experience.
Amendment 942 #
Proposal for a regulation
Article 66 – paragraph 1
Article 66 – paragraph 1
1. A trade repository shall ensure the confidentiality, integrity and protection of the information received under Article 6. No commercial use may be made of any information without the consent of both counterparties to the derivative contract.
Amendment 944 #
Proposal for a regulation
Article 67 – paragraph 1
Article 67 – paragraph 1
1. A trade repository shall publish only aggregate positions by class of derivatives on the contracts reported to it.
Amendment 948 #
Proposal for a regulation
Article 67 – paragraph 2 – introductory part
Article 67 – paragraph 2 – introductory part
2. A trade repository shall make the necessary information available only to the following entities:
Amendment 965 #
Proposal for a regulation
Article 69
Article 69
Amendment 973 #
Proposal for a regulation
Article 70 a (new)
Article 70 a (new)