106 Amendments of Olle SCHMIDT related to 2012/0029(COD)
Amendment 133 #
Proposal for a regulation
Recital 5
Recital 5
(5) It is necessary to lay down in a Regulation a number of uniform obligations to be imposed on market participants regarding certain aspects of the settlement cycle and discipline and to provide a set of common requirements for CSDs operating securities settlement systems. The directly applicable rules of a Regulation should ensure that all market operators and CSDs are subject to identical directly applicable obligations and rules. A Regulation should increase the safety and efficiency of settlement in the Union by preventing any diverging national rules as a result of the transposition of a directive. A Regulation should reduce the regulatory complexity for market operators and CSDs resulting from different national rules and should allow CSDs to provide their services on a cross-border basis without having to comply with different sets of national requirements such as those concerning the authorisation, supervision, organisation or risks of CSDs. A Regulation imposing identical requirements on CSDs should also contribute to eliminating competitive distortions. A CSD may be established in accordance with this Regulation in any Member State. No Member State or group of Member States should be discriminated against, directly or indirectly, as a location for CSD and settlement services. Nothing in this Regulation should attempt to restrict or impede a CSD in one jurisdiction from settling a product denominated in the currency of another Member State or in the currency of a third country.
Amendment 134 #
Proposal for a regulation
Recital 5 a (new)
Recital 5 a (new)
(5 a) This Regulation should recognise and support the existing CSD models of all Member States and the services they provide, which have developed to meet the specific needs of their national financial markets, their national economy and companies, and to comply with their Member State's national laws. This Regulation should not make changes to existing CSD models or services unless they cannot meet the objectives of the Regulation or they pose undue risks.
Amendment 137 #
Proposal for a regulation
Recital 6
Recital 6
(6) The Financial Stability Board (FSB) called, on 20 October 2010, for more robust core market infrastructures and asked for the revision and enhancement of the existing standards. TIn April 2012, the Committee on Payments and Settlement Systems (CPSS) of the Bank of International Settlements (BIS) and the International Organisation of Securities Commissions (IOSCO) are finalising draft global standards. These are to replace the BIS recommendations from 2001, which were adapted through non-binding guidelines at European level inpublished principles for financial market infrastructures. These principles replace CPSS-IOSCO recommendations for securities settlement systems from November 2001, which were implemented in the European Union through the recommendations for securities settlement systems and for central counterparties jointly adopted in May 2009 by the European System of Central Banks (ESCB) and the Committee of European Securities Regulators (CESR).
Amendment 138 #
Proposal for a regulation
Recital 8
Recital 8
(8) One of the basic tasks of the ESCB is to promote the smooth operation of payment systems. In this respect, the members of the ESCB execute oversight by ensuring efficient and sound clearing and payment systems. The members of the ESCB often act as settlement agents for the cash leg of the securities transactions. They are also important clients of CSDs, which often manage the collateralisation of monetary policy operations. The members of the ESCB should be closely involved by beingand be consulted in the authorisation and supervision of CSDs, recognition of third country CSDs and the approval of CSD links. To prevent the emergence of parallel sets of rules, they should also be closely involved by beingand be consulted where necessary in the setting of regulatory and implementing technical standards as well as of guidelines and recommendations. The provisions of this Regulation should bare without prejudice to the responsibilities of the European Central Bank (ECB) and the National Central Banks (NCBs) to ensure efficient and sound clearing and payment systems within the Union and other countries. Access to information by the members of the ESCB is important for the adequate performance of their oversight of financial market infrastructures and financial stability as well as to the functioning of central banks.
Amendment 146 #
Proposal for a regulation
Recital 13
Recital 13
(13) Longer settlement periods of transactions in transferable securities cause uncertainty and increased risk for securities settlement systems participants. Different durations of settlement periods across Member States hamper reconciliation and are sources of errors for issuers, investors and intermediaries. It is therefore necessary to provide a common settlement period which would facilitate the identification of the intended settlement date and facilitate the implementation of settlement discipline measures. The intended settlement date of transactions in transferable securities which are admitted to trading on trading venues regulated by Directive 2004/39/EC should be no later than on the second business day after the trading takes place. Certain transferable securities may require longer settlement periods due to the illiquidity of those transferable securities and/or the specific trading characteristics surrounding them.
Amendment 149 #
Proposal for a regulation
Recital 18
Recital 18
(18) Within a borderless Union settlement market, it is necessary to define the competences of the different authorities involved in the application of this Regulation. Member States should specifically designate the competent authorities responsible for the application of this Regulation, which should be afforded the supervisory and investigatory powers necessary for the exercise of their functions. A CSD should be subject to the authorisation and supervision of the competent authority of its place of establishment, which is well placed and should be empowered to examine how CSDs operate on a daily basis, to carry out regular reviews and to take appropriate action when necessary. That authority should however consult at the earliest stage and cooperate with other relevant authorities, which include the authorities responsible for the oversight of each securities settlement system operated by the CSD and, where applicable, the relevant central banks that act as settlement agent for each securities settlement system, and, also, where applicable, the competent authorities of other group entities. This cooperation also implies immediate information of the authorities involved in case of emergency situations affecting the liquidity and stability of the financial system in any of the Member States where the CSD or its participants are established. Whenever a CSD provides its services in another Member State than where it is established either by the establishment of a branch or by way of direct provision of services the competent authority of its place of establishment is mainly responsible for the supervision of that CSD. In accordance with Articles 8, 16 and 30 of Regulation (EU) No 1095/2010, ESMA should be involved in coordinating the activities of competent authorities, to further strengthen consistency in supervisory outcomes. ESMA should also, where appropriate, request opinions or advice from the Securities and Markets Stakeholder Group referred to in Article 37 of Regulation (EU) No 1095/2010 and periodically organise and conduct peer reviews on specific questions concerning the supervision of CSDs with cross-border activities and interoperability links.
Amendment 156 #
Proposal for a regulation
Recital 23 a (new)
Recital 23 a (new)
(23 a) The direct holding systems in several Member States involve a particular tripartite relationship in which the investor has a direct account on the CSD level, but rights and obligations vis- à-vis the investor are shared between the CSD and the account operator. This sharing of functions should not be considered to be outsourcing as defined in Article 28.
Amendment 158 #
Proposal for a regulation
Recital 25
Recital 25
(25) Considering the global nature of financial markets and the systemic importance of the CSDs, it is necessary to ensure international convergence of the prudential requirements to which they are subject. The provisions of this Regulation should follow the existing recommendations developed by CPSS- IOSCO and ESCB-CESRCPSS-IOSCO principles for financial market infrastructures and the ESCB-CESR recommendations for securities settlement systems and recommendations for central counterparties in the European Union. ESMA should consider the existing standards and their future developments when drawing up or proposing to revise the regulatory technical and implementing standards as well as the guidelines and recommendations requiredferred to in this Regulation.
Amendment 161 #
Proposal for a regulation
Recital 28 a (new)
Recital 28 a (new)
(28 a) Account operators, as defined in some direct holding systems, record entries into securities accounts maintained by the CSD without necessarily being account providers themselves. In view of the need for legal certainty on the entries made into accounts at the CSD level, the specific role played by account operators should be recognised by this Regulation. It should therefore be possible, under specific circumstances and subject to strict rules laid down by law, to share the responsibility for maintaining securities accounts at the top tier level with another person that is subject to appropriate regulation and supervision.
Amendment 162 #
Proposal for a regulation
Recital 28 a (new)
Recital 28 a (new)
Amendment 166 #
Proposal for a regulation
Recital 31
Recital 31
(31) In order to avoid settlement risks due to the insolvency of the settlement agent, a CSD should settle, whenever practical and available, the cash leg of the securities transaction through accounts opened with a central bank. If this option is not practical and available, a CSD should be able to settle through accounts opened with a credit institution established under the conditions provided in Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions and subject to a specific authorisation procedure and prudential requirements provided in Title IV of this Regulation. The latter,Credit institutions when acting as settlement agent, should be ableonly be allowed to provide to the CSD's participants the services set out in this Regulation, which are covered by the authorisation, and may otherwise provide other services not covered by in accordance with this Regulation.
Amendment 168 #
Proposal for a regulation
Recital 31 a (new)
Recital 31 a (new)
(31 a) A CSD authorised under this regulation shall be deemed fit and proper to be granted necessary access to arrange settlement of the cash leg denominated in currencies of EU and EEA Member States through central bank accounts.
Amendment 172 #
Proposal for a regulation
Recital 32
Recital 32
(32) Considering that Directive 2006/48/EC does not address specifically intraday credit and liquidity risks resulting from the provision of banking services ancillary to settlement, credit institutionsa CSD authorised as credit institution, or a designated credit institution, providing such services should also be subject to specific enhanced credit and liquidity risk mitigation requirements that should apply to each securities settlement system in respect of which they act as settlement agents. In order to ensure full compliance with specific measures aimed at mitigating credit and liquidity risks, the competent authorities should be able to require CSDs to designate more than one credit institution whenever they can demonstrate, based on the available evidence, that the exposures of one credit institution to the concentration of credit and liquidity risks is not fully mitigated.
Amendment 175 #
Proposal for a regulation
Recital 33
Recital 33
(33) The requirement that the settlement of the cash leg of the securities transaction be carried out by a separate legal entity acting as settlement agent is an important measure to increase the safety and resilience of CSDs. Such a separation between core services of CSDs and banking servicesor to act as a settlement agent itself after have being authorised according to this Regulation is an important measure to increase the safety and resilience of CSDs. The settlement agent should be authorised as credit institution and follow relevant Union regulation. The settlement agent is only authorised to perform the banking services supporting core CSD and ancillary services to settlement appears indeed indispensible for eliminating any danger of transmission of the risks from the banking services, such asin accordance with this Regulation. There should also be additional rules for the settlement agent to handle credit and liquidity risks, to the provision of core services of CSDs. There are no less intrusive measures available for eliminating those credit and liquidity risks in order to ensure the envisaged level of safety and resilience of CSDs. However, in order to secure the efficiencies resulting from the provision of both CSD and banking services within the same group of undertakings, the requirement that banking services be carried out by a separate credit institution should not prevent that credit institution from belonging to the same group of undertakings as the CSD. If both CSD and banking services are provided within the same group of undertakings, in order to increase the safety and efficiency of the services provided, the activities of the credit institution providing banking services should be limited to the provision of banking services ancillary to settlement. Furthermore, a derogation to the obligation to separate banking services ancillary to settlement from core CSD services should be available in the absence of any danger of transmission of credit and liquidity risks from the banking services to the provision of core services of CSDs. In order to ensure a consistent application of the possibility to derogate from the obligation on CSDs not to provide any banking type of ancillary services, the Commission should be empowered to decide, at the request of a national competent authority, whether any such derogation is permitted in view of the absence of systemic risk incurred by the provision of both CSD core and banking services by the same legal entity. In any case, the activities of a CSD benefiting from any such derogation and authorised as a credit institution should be limited exclusively to the provision of banking services ancillary to settlement.
Amendment 182 #
Proposal for a regulation
Recital 35
Recital 35
(35) The safety of the link arrangements set up between CSDs should be subject to specific requirements to enable the access of their respective participants to other securities settlement systems. The requirement to provide banking type of ancillary services in separate legal entity should not prevent CSDs from receiving such services, in particular when they are participants in a securities settlement system operated by another CSD. It is particularly important that any potential risks resulting from the link arrangements such as credit, liquidity, organisational or any other relevant risks for CSDs are fully mitigated. For interoperability links, it is important that linked securities settlement systems have identicalcoordinated rules for moments of entry of transfer orders into the system, irrevocability of transfer orders and finality of transfers of securities and cash. The same principles should apply to CSDs that use a common settlement information technology (IT) infrastructure.
Amendment 185 #
Proposal for a regulation
Recital 36
Recital 36
(36) As operators of securities settlement systems, CSDs perform a key role in the process of transferring securities on securities accounts. In order to enhance legal certainty especially in a cross-border context, it is important to establish clear rules on the law applicable to ownership aspects in relation to the securities that are maintained by a CSD in its accounts. Following the approach taken by the existing conflict of laws rules, the applicable law should beAny question with respect to holding and disposition of financial instruments held by a CSD that arises as a consequence of the freedom to issue securities in a CSD authorised in the Union should be governed by the law of the placejurisdiction where the accounts of a CSD are is maintained.
Amendment 190 #
Proposal for a regulation
Recital 47
Recital 47
(47) European Securities and Markets Authority (ESMA), established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (ESMA), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC, should play a central role in the application of this Regulation by ensuring consistent application of Union rules by national competent authorities and by settling disagreements between them. When preparing drafts of technical standards and delegated acts, ESMA should follow the principle of an open market economy with free competition in accordance with Article 119(1) and (2) TFEU.
Amendment 196 #
Proposal for a regulation
Article 1 – paragraph 1
Article 1 – paragraph 1
1. This Regulation lays down uniform requirements for the settlement of financial instruments specified in points 1, 2, 3 of Section C of Annex I to Directive .../.../EU [new MiFID] in the Union and rules on the organisation and conduct of central securities depositories to promote safe and smooth settlement.
Amendment 201 #
Proposal for a regulation
Article 1 – paragraph 4
Article 1 – paragraph 4
4. Articles 9 to 187 (1), 9 to 18, 20, 25 and 2044 as well as the provisions of Title IV doshall not apply to the members of the European System of Central Banks (ESCB), other Member States‘ national bodies performing similar functions or Member States’ public bodies charged with or intervening in the management of the public debt. This Regulation shall apply to the members of the ESCB when operating a securities settlement system and performing the core services listed in Section A of the Annex.
Amendment 211 #
Proposal for a regulation
Article 2 – paragraph 1 – point 3
Article 2 – paragraph 1 – point 3
(3) ‘securities settlement system’ means a system under the first and second indents of point (a) of Article 2 of Directive 98/26/EC whose business consists of the execution of transfer orders as defined in the second indent of point (i) of Article 2 of Directive 98/26/EC;.
Amendment 229 #
Proposal for a regulation
Article 2 – paragraph 1 – point 31 a (new)
Article 2 – paragraph 1 – point 31 a (new)
(31 a) 'omnibus account' means a securities account which holds securities that belong to multiple end investors;
Amendment 232 #
Proposal for a regulation
Article 2 – paragraph 1 – point 31 b (new)
Article 2 – paragraph 1 – point 31 b (new)
(31 b) 'single beneficiary securities account' means a securities account held by a single end investor;
Amendment 235 #
Proposal for a regulation
Article 2 – paragraph 1 – point 31 c (new)
Article 2 – paragraph 1 – point 31 c (new)
(31 c) 'end investor' means a natural or legal person that hold securities with a securities account provider for its own account, and not as a consequence of the provision of securities account services to a third party;
Amendment 237 #
Proposal for a regulation
Article 2 – paragraph 1 – point 31 d (new)
Article 2 – paragraph 1 – point 31 d (new)
(31 d) 'financial instrument' means those instruments specified in points 1, 2 and 3 of Section C of Annex I to Directive .../.../EU [new MiFID];
Amendment 238 #
Proposal for a regulation
Article 2 – paragraph 1 – point 31 f (new)
Article 2 – paragraph 1 – point 31 f (new)
(31 f) 'small and medium-sized enterprise' (SME) means a company that has an average market capitalisation of less than EUR 200 000 000 in accordance with Article 4 (12) of Directive No.../...[new MiFID];
Amendment 239 #
Proposal for a regulation
Article 2 – paragraph 1 – point 31 e (new)
Article 2 – paragraph 1 – point 31 e (new)
(31 e) 'SME growth market' means a MTF that is registered as an SME growth market in accordance with Article 35 of Directive No.../...[new MiFID];
Amendment 241 #
Proposal for a regulation
Article 2 – paragraph 2
Article 2 – paragraph 2
2. The Commission shall be empowered to adopt delegated acts in accordance with Article 64 concerning measures to specify the technical elements of the definitions in points (17), (20), (21) and (22) of paragraph 1, and to specify the ancillary services set out in points (1) to (4) of Section B of the Annex and the services set out in points (1) and (2) of Section C of the Annex.
Amendment 244 #
Proposal for a regulation
Article 3 – paragraph 1
Article 3 – paragraph 1
1. Any company that issues transferable securities which are admitted to trading on regulated markets, or are traded on MTFs or OTFs shall arrange for such securities to be represented in book-entry form as immobilisation through the issuance of a global note, which represents the whole issue, or subsequent to a direct issuance of the securities into a dematerialised form.
Amendment 257 #
Proposal for a regulation
Article 5 – paragraph 2
Article 5 – paragraph 2
2. As regards transferable securities referred to in paragraph 1 which are tradedadmitted to trading on regulated markets, or traded on MTFs or OTFs, the intended settlement date shall be no later than on the second business day after the trading takes place.
Amendment 269 #
Proposal for a regulation
Article 6 – paragraph 1
Article 6 – paragraph 1
Amendment 277 #
Proposal for a regulation
Article 6 – paragraph 4 – subparagraph 1
Article 6 – paragraph 4 – subparagraph 1
The European Securities and Markets Authority (ESMA) shall develop in consultation and cooperation with the members of the European System of Central Banks (ESCB) draft regulatory technical standards to specify the details of the procedures enabling confirmation of relevant details of transactions and facilitating settlement referred to in paragraphs 1 and 2 and the details of the monitoring tools identifying likely settlement fails referred to in paragraph 3.
Amendment 282 #
Proposal for a regulation
Article 7 – paragraph 1
Article 7 – paragraph 1
1. For each securities settlement system it operates, a CSD shall establish a system that monitors settlement fails of transactions in financial instruments referred to in Article 5(1). It shall provide regular reports to the competent authority as defined in Article 11 and to any person with a legitimate interest as to the number and details of settlement fails and any other relevant information. The competent authorities shall share with ESMA and the ESCB any relevant information on settlement fails.
Amendment 283 #
Proposal for a regulation
Article 7 – paragraph 2
Article 7 – paragraph 2
2. For each securities settlement system it operates, a CSD shall establish procedures that facilitate settlement of transactions in financial instruments referred to in Article 5(1) that are not settled on the intended settlement date referred to in Article 5(2). These procedures shall provide for a sufficiently deterrent penalty mechanism for participants that cause the settlement fails where there is not already such a procedure provided for by a CCP in a Member State under Regulation 236/2012/EU [short selling].
Amendment 284 #
Proposal for a regulation
Article 7 – paragraph 2
Article 7 – paragraph 2
2. For each securities settlement system it operates, a CSD, in consultation with the relevant regulated markets, MTFs, OTFs and CCPs in respect of which it provides settlement services, shall establish procedures that facilitate settlement of transactions in financial instruments referred to in Article 5(1) that are not settled on the intended settlement date. These procedures shall provide for a sufficiently deterrent penalty mechanism for participants, other than the CCP, that cause the settlement fails.
Amendment 289 #
Proposal for a regulation
Article 7 – paragraph 6
Article 7 – paragraph 6
6. CSDs, CCPs, regulated markets, MTFs and OTFCCPs shall establish procedures that enable them to suspend any participant that fails systematically to deliver the financial instruments referred to in paragraph 1 or cash on the intended settlement date and to disclose to the public its identity only after giving that participant the opportunity to submit its observations.
Amendment 291 #
Proposal for a regulation
Article 7 – paragraph 7 – subparagraph 1
Article 7 – paragraph 7 – subparagraph 1
Paragraphs 2 to 65 shall apply to all transactions of the instruments referred to in Article 5 (1) which are admitted to trading on regulated markets, traded on MTFs or OTFs or cleared by a CCP.
Amendment 294 #
Proposal for a regulation
Article 7 – paragraph 7 – subparagraph 3
Article 7 – paragraph 7 – subparagraph 3
For transactions not cleared by a CCP, the regulated markets, MTFs and OTFslevant settlement infrastructure, at the request of the non defaulting participants, shall include in their internal rules an obligation on their participants to be subject to the measures referred to in paragraph 3 to 5.
Amendment 300 #
Proposal for a regulation
Article 7 – paragraph 8 – subparagraph 1
Article 7 – paragraph 8 – subparagraph 1
ESMA shall develop in consultation with the members of the ESCB draft regulatory technical standards to specify the details of the system monitoring settlement fails and the reports on settlement fails referred to in paragraph 1, of the procedures facilitating settlement of transactions following settlement fails referred to in paragraph 2 and the measures referred to in paragraphs 3 to 5, including mitigating factors and an upper cap on the daily penalties and the measures referred to in paragraphs 3 to 5. The procedures referred to in paragraph 2 and the daily penalty referred to in paragraph 4, shall be commensurate to the scale and seriousness of the offence.
Amendment 311 #
Proposal for a regulation
Article 11 – paragraph 1 – point b
Article 11 – paragraph 1 – point b
(b) where applicable, the central bank in the Union issuing the currency in which settlement takes place or in whose books the cash leg of a securities settlement system operated by the CSD is settled or, in case of settlement through a credit institution in accordance with Title IV, the central bank in the Union of issue of the relevant currency.
Amendment 317 #
Proposal for a regulation
Article 12 – paragraph 1 – subparagraph 2
Article 12 – paragraph 1 – subparagraph 2
In order to ensure consistent, efficient and effective supervisory practices within the Union, including cooperation between authorities referred to in Articles 9 and 11 in the different assessments necessary for the application of this Regulation, ESMA may, in close cooperation with ESCB, issue guidelines addressed to authorities referred to in Article 9 in accordance with Article 16 of Regulation (EU) No 1095/2010.
Amendment 321 #
Proposal for a regulation
Article 13 – paragraph 1
Article 13 – paragraph 1
The authorities referred to in Articles 9 and 11 shall immediately inform ESMA and ESRB and each other of any emergency situation relating to a CSD, including of any developments in financial markets, in particular in the currency markets, which may have an adverse effect on market liquidity and on the stability of the financial system in any of the Member States where the CSD or one of its participants are established.
Amendment 333 #
Proposal for a regulation
Article 16 – paragraph 3
Article 16 – paragraph 3
3. An authorised CSD shall not be exposed to any risksother risks than those related to the provision of banking type of ancillary services by the credit institution designated to provide such services in accordance with Title IV.
Amendment 343 #
Proposal for a regulation
Article 17 – paragraph 1 – point d
Article 17 – paragraph 1 – point d
(d) setting up any interoperable CSD link.
Amendment 351 #
Proposal for a regulation
Article 19 – paragraph 2
Article 19 – paragraph 2
2. Central banks shall immediately inform ESMA of any CSDthe securities settlement system that they operate.
Amendment 352 #
Proposal for a regulation
Article 19 – paragraph 3
Article 19 – paragraph 3
3. The name of each CSD operating in compliance with this Regulation and to which authorisation or recognition has been granted under Articles 14, 17 and 23 shall be entered in a list specifying the services and classes of financial instruments for which the CSD has been authorised. The list shall include branches operated by the CSD in other Member States and CSD linkStates, CSD links and Member States where Article 28a on shared services applies. ESMA shall publish the list on its dedicated website and keep it up to date.
Amendment 357 #
Proposal for a regulation
Article 20 – paragraph 1
Article 20 – paragraph 1
1. The competent authority shall, at least on an annual basis, review the arrangements, strategies, processes and mechanisms implemented by a CSD with respect to compliance with this Regulation and evaluate the direct and indirect risks to which the CSD is, or might be, exposed.
Amendment 363 #
Proposal for a regulation
Article 20 – paragraph 5
Article 20 – paragraph 5
5. The competent authority shall discuss regularly, and at least once a year,in advance inform the relevant authorities referred to in Article 11 of the results, including any remedial actions or penalties, of the review and evaluation referred to in paragraph 1.
Amendment 367 #
Proposal for a regulation
Article 20 a (new)
Article 20 a (new)
Article 20 a Exchange of information with ESRB and ESCB Competent authorities shall communicate information to the ESRB and to the relevant members of the ESCB where such information is relevant for the exercise of their duties.
Amendment 373 #
Proposal for a regulation
Article 21 – paragraph 2 – point b
Article 21 – paragraph 2 – point b
(b) a programme of operations stating in particular the services which it intends to provide and the currency or currencies it processes;
Amendment 386 #
Proposal for a regulation
Article 22 – title
Article 22 – title
Cooperation between home and host authorities and ESMA
Amendment 395 #
Proposal for a regulation
Article 22 – paragraph 5 a (new)
Article 22 – paragraph 5 a (new)
5 a. In accordance with Article 8, Article 16 and Article 30 of Regulation (EU) No 1095/2010, ESMA shall issue guidelines and recommendations addressed to competent authorities or financial market participants and periodically organise and conduct peer reviews of some or all of the activities of competent authorities, to further strengthen consistency in supervisory outcomes. The Authority shall, where appropriate, also request opinions or advice from the Securities and Markets Stakeholder Group referred to in Article 37 of Regulation (EU) No 1095/2010 and conduct a peer review, including the members of the ESCB, concerning specific questions and concerning the supervision of CSDs related to cross-border activities or interoperability links.
Amendment 396 #
Proposal for a regulation
Article 22 – paragraph 6
Article 22 – paragraph 6
6. The Commission shall bESMA shall, after consulting competent authorities and the mempowered to adbers of the ESCB, developt delegated acts in accordance with Article 64raft regulatory technical standards concerning measures for establishing the criteria under which the operations of a CSD in a host Member State could be considered of substantial importance for the functioning of the securities markets and the protection of the investors in that host Member State. ESMA shall submit those draft regulatory technical standards to the Commission by [nine months from the date of entry into force of this Regulation]. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.
Amendment 399 #
Proposal for a regulation
Article 22 – paragraph 7 – subparagraph 1
Article 22 – paragraph 7 – subparagraph 1
ESMA shall develop in close cooperation with the members of the ESCB draft implementing technical standards to establish standard forms, templates and procedures for the cooperation arrangements referred to in paragraphs 1, 3 and 5.
Amendment 401 #
Proposal for a regulation
Article 23 – paragraph 2 – point b
Article 23 – paragraph 2 – point b
(b) the CSD is subject to effective authorisation and, supervision or, if the securities settlement system is operated by a member of a central bank, oversight, ensuring a full compliance with the prudential requirements applicable in that third country;
Amendment 408 #
Proposal for a regulation
Recitals 54 a (new)
Recitals 54 a (new)
(54a) Market making activities play a crucial role in providing liquidity to markets within the Union and market makers need to take short positions to perform that role , particularly in less liquid securities and those admitted to SME growth markets.
Amendment 409 #
Proposal for a regulation
Recital 54 b (new)
Recital 54 b (new)
(54b) Measures to address and prevent settlement fails should be balanced against the need to maintain and protect liquidity in these securities. Regulation (EU) No 236/2012 should provide for flexibility in rules on settlement discipline to prevent and address settlement fails. This Regulation therefore amends Regulation (EU) No 236/2012 to provide for measures to allow for calibrated buy- in procedures for illiquid securities where a national competent authority has determined that this is necessary to promote and maintain liquidity.
Amendment 412 #
Proposal for a regulation
Article 25 – paragraph 2
Article 25 – paragraph 2
2. A CSD shall have a board of which at least one third, but no less than two, of its members are independent.
Amendment 414 #
Proposal for a regulation
Article 25 – paragraph 4
Article 25 – paragraph 4
4. The board shall be composed of suitable members with an appropriate mix of skills, experience and knowledge of the entity and of the marketCompetent authorities shall require the board and the nomination committees to take into account diversity as one of the criteria for selection of members of the board. The board shall be composed of suitable members with an appropriate mix of skills, experience and knowledge of the entity and of the market. In particular the board shall put in place a policy promoting gender, age, geographical, educational and professional diversity on the management body, as well as take concrete steps towards a more balanced representation on the board. Such concrete measures may for example include training of nomination committees, the creation of rosters of competent candidates, and the introduction of a nomination process where at least one candidate of each sex is presented.
Amendment 416 #
Proposal for a regulation
Article 25 – paragraph 5
Article 25 – paragraph 5
5. A CSD shall clearly determine the roles and responsibilities of the board and shall make the minutes of the board meetings available to the competent authority and the auditor.
Amendment 424 #
Proposal for a regulation
Article 28 a (new)
Article 28 a (new)
Article 28a Shared services 1. Member States may provide for a person other than the CSD to be responsible for recording entries into securities accounts at the level of the CSD. Where Member States provide for such shared services, , the requirements of this Regulation shall apply, where relevant, also to that other person. 2. Where Member States provide for shared services pursuant to paragraph 1,they shall specify the applicable requirements, including requirements pursuant to this Regulation, in their national law. 3. Where Member States provide for shared services pursuant to paragraph 1, they shall notify the Commission and ESMA accordingly. ESMA shall include information on shared services in the CSD register referred to in Article 19.
Amendment 425 #
Proposal for a regulation
Article 28 a (new)
Article 28 a (new)
Article 28a Direct holding model 1. Member states may provide for a person other than the CSD to be responsible for the performance of certain, but not all, functions of the relevant CSD pursuant to this Regulation. Where Member States provide for such shared services, provisions of this Regulation shall apply mutatis mutandis to the person responsible for performing the function to which the provision applies. 2. Where Member States provide for shared services pursuant to paragraph 1, they shall specify the functions for which that other person is responsible, and the applicable requirements, including requirements under this Regulation. 3. Where Member States provide for shared services pursuant to paragraph 1, they shall notify the Commission and ESMA accordingly. ESMA shall include information on shared services in the CSD register referred to in Article 19.
Amendment 443 #
Proposal for a regulation
Article 34 – paragraph 1
Article 34 – paragraph 1
1. A CSD shall take appropriate reconciliation measures to verify that the number of securities making up a securities issue or part of a securities issue submitted to the CSD is equal to the sum of securities recorded on the securities accounts of the participants of the securities settlement system operated by the CSD and, where relevant, on owner accounts maintained by the CSD. Such reconciliation measures shall be conducted intradaat least daily.
Amendment 445 #
Proposal for a regulation
Article 35 – paragraph 1
Article 35 – paragraph 1
1. For each securities settlement system it operates a CSD shall keep records and accounts that shall enable it, at any time and without delay, to distinguishsegregate in the accounts with the CSD the securities of a participant from the securities of any other participant and, if applicable, from the CSD’s own assets.
Amendment 447 #
Proposal for a regulation
Article 35 – paragraph 2
Article 35 – paragraph 2
2. A CSD shall keep records and accounts that enable a participant to distinguishsegregate the securities of that participant from those of that participant’s clients.
Amendment 450 #
Proposal for a regulation
Article 35 – paragraph 3
Article 35 – paragraph 3
3. A CSD shall offer to keep records and accounts enabling a participant to distinguishsegregate the securities of each of that participant’s clients, if and as required by that participant (‘individual client segregation’).
Amendment 457 #
Proposal for a regulation
Article 36 – paragraph 6
Article 36 – paragraph 6
6. A CSD shall achieve settlement finality no later than by the end of the business day of the intended settlement date. Upon demand by its user committee, it shall install operational procedures or systems that allow for intraday or real-time settlement.
Amendment 464 #
Proposal for a regulation
Article 37 – paragraph 1
Article 37 – paragraph 1
1. For transactions denominated in the currency of the country where the settlement takes place, a CSD shall settle the cash payments of its respective securities settlement system through accounts opened with athe central bank operating in suchf issue of that currency whenever practical and available.
Amendment 472 #
Proposal for a regulation
Article 39 – paragraph 1
Article 39 – paragraph 1
A CSD shall adopt a sound risk- management framework for comprehensively managing legal, business, operational and other direct or indirect risks, for example systemic risks.
Amendment 486 #
Proposal for a regulation
Article 44 a (new)
Article 44 a (new)
Article 44 a Liability regime A CSD shall be liable for the losses suffered by its members and or participants arising from the loss of a financial instrument when they are related to the functions for which the CSD has been authorised, unless it can prove that the loss is the result of an external event beyond its control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary. A CSD shall be liable for (but not limited to) the following cases: - reconciliation errors with registrars and/or issuers; - theft of securities (either physical or electronic); - systems failure; - failure within the CSD’s central counterparty functionality, if applicable; - CSD errors, omissions or fraud impacting settlement, safekeeping and asset servicing activities; - CSD insolvency / default; - force majeure events. A CSD shall demonstrate that it has sufficient provision to cover such instances in the form of liability insurance and/or capital provision. ESMA shall develop draft regulatory technical standards to specify the details of insurance and capital provision. The liability regime should take into account if the Member States provide for shared services.
Amendment 489 #
Proposal for a regulation
Article 45 – paragraph 4
Article 45 – paragraph 4
4. In case of a provisional transfer of securities between linked CSDs, retransfer or onward transfer to a third CSD of securities prior to the first transfer becoming final shall be prohibited.
Amendment 492 #
Proposal for a regulation
Article 45 – paragraph 8 a (new)
Article 45 – paragraph 8 a (new)
8 a. A CSD shall provide appropriate access to the account structures in order to enable participants and CSDs, to connect and have access to its systems. The account structure shall be supported by the appropriate arrangements addressing relevant risks to the system.
Amendment 494 #
Proposal for a regulation
Article 45 – paragraph 9 – subparagraph 1
Article 45 – paragraph 9 – subparagraph 1
ESMA shall develop in consultation and close cooperation with the members of the ESCB draft regulatory technical standards to specify the conditions as provided in paragraph 3 under which each type of link arrangement provides for adequate protection of the linked CSDs and of their participants, in particular when a CSD intends to participate in the securities settlement system operated by another CSD, the monitoring and managing of additional risks referred to in paragraph 5 arising from the use of intermediaries, the reconciliation methods referred to in paragraph 6, the cases where DVP settlement through links is practical and feasible as provided in paragraph 7, the provisions of paragraph 8a on the appropriate account structures including the relevant arrangements and the methods of assessment thereof.
Amendment 496 #
Proposal for a regulation
Article 46
Article 46
Amendment 528 #
Proposal for a regulation
Article 52 – paragraph 1
Article 52 – paragraph 1
1. A CSD shall not provide itself any banking type of ancillary services set out in Section C of the Annex, unless it has demonstrated and provided assurance to the national competent authority referred to in Article 53(1) of this Regulation, that the risks incurred for offering such banking type ancillary services in the same legal entity are duly mitigated in line with the European implementing acts of the CPSS-IOSCO Principles applicable to CSDs and the ad-hoc national CSD Recovery and Resolution safeguards, as set in this Article.
Amendment 539 #
Proposal for a regulation
Article 52 – paragraph 2 – subparagraph 1
Article 52 – paragraph 2 – subparagraph 1
Amendment 544 #
Proposal for a regulation
Article 52 – paragraph 2 – subparagraph 2
Article 52 – paragraph 2 – subparagraph 2
Following a detailed impact assessment, a consultation of the undertakingsCSD concerned and after taking into account the opinions of the EBA, the ESMA and the EC, the EIOPA, the ECB, and the competent authorities and the assessment of the ESRB, the Commission shall adopt an implementing decision in accordance with the procedure referred to in Article 66. The Commission shall give reasons for its implementing decision.
Amendment 548 #
Proposal for a regulation
Article 52 – paragraph 2 – subparagraph 3
Article 52 – paragraph 2 – subparagraph 3
A CSD which benefits from a derogation shall be authorised ashas been authorised to settle the cash leg of all or part of its securities settlement system in accordance with Article 37(2) of this Regulation shall apply under paragraph 3 of this Article for a credit institution authorisation as provided in Title II of Directive 2006/48/EC. This authorisation shall be limited exclusively to the provision of the banking type of ancillary services that it is authorised to provide in accordance with paragraph 4 and shall imply the fulfilment of the prudential and supervision requirements provided in Article 57 and 58. The credit institution of the CSD or the designated credit institution under paragraph 3 shall only provide the services listed in Annex 1 of the amended Directive 20XX/XX/EU (CRD), sections 1, 2, 4, 6, 7b and 7e. The credit institution of the CSD or the designated credit institution shall not provide any of the services listed in sections 3, 5, 7 (except b and e) and 8 to 15, unless otherwise indicated in Section C of the Annex.
Amendment 557 #
Proposal for a regulation
Article 52 – paragraph 3
Article 52 – paragraph 3
3. A CSD that intends to settle the cash leg of all or part of its securities settlement system in accordance with Article 37(2) of this Regulation shall apply to become, or obtain authorisation to designate for this purpose, an authorised credit institution as provided in Title II of Directive 2006/48/EC, unless the competent authority referred to in Article 53(1) of this Regulation demonstrates, based on the available evidence, that the exposure of one credit institution to the concentration of risks under Article 57(3) and (4) of this Regulation is not sufficiently mitigated. In the latter case, the competent authority referred to in Article 53(1) may require the CSD to designate more than one credit institution. The designated credit institutions shall be considered as settlement agents as defined in point (d) of Article 2 of Directive 98/26/EC.
Amendment 568 #
Proposal for a regulation
Article 52 – paragraph 4
Article 52 – paragraph 4
4. The authorisation referred to in paragraph 3 shall cover the ancillary services set out in Section C of the Annex that the designated credit institution or a CSD that has been granted a derogcredit institution authorisation under paragraph 23 of this Article may want to provide for its participants.
Amendment 574 #
Proposal for a regulation
Article 52 – paragraph 5
Article 52 – paragraph 5
5. Whenever the CSD and the designated credit institution belong to a group of undertakings ultimately controlled by the same parent undertaking, the authorisation as provided in Title II of Directive 2006/48/EC of such designated credit institution shall be limited exclusively to the provision of the banking type of ancillary services that it is authorised to provide in accordance with paragraph 3 of this Article. The same requirement applies in respect of a CSD that has been granted a derogcredit institution authorisation under paragraph 23 of this Article.
Amendment 583 #
Proposal for a regulation
Article 52 – paragraph 5 a (new)
Article 52 – paragraph 5 a (new)
5 a. A CSD that has been authorised as a credit institution according to paragraph 3 of this Article shall fulfil prudential and supervision requirements provided in Articles 42, 57 and 58.
Amendment 595 #
Proposal for a regulation
Article 53 – paragraph 5 – subparagraph 1
Article 53 – paragraph 5 – subparagraph 1
ESMA shall develop in consultation and close cooperation with the members of the ESCB and EBA draft regulatory technical standards to specify the information that the applicant CSD shall provide to the competent authority.
Amendment 614 #
Proposal for a regulation
Article 57 – paragraph 1
Article 57 – paragraph 1
1. A credit institution authorised as a credit institution or a credit institution designated to provide banking type of ancillary services shall provide the services set out in Section C of the Annex that are covered by the authorisationbe limited in its banking functions in accordance with Article 52.
Amendment 616 #
Proposal for a regulation
Article 57 – paragraph 2
Article 57 – paragraph 2
2. A CSD authorised as a credit institution or a credit institution designated to provide banking type of ancillary services shall comply with any present or future legislation applicable to credit institutions.
Amendment 620 #
Proposal for a regulation
Article 57 – paragraph 3 – introductory part
Article 57 – paragraph 3 – introductory part
3. A CSD authorised as a credit institution or a credit institution designated to provide banking type of ancillary services shall comply with the following specific prudential requirements for the credit risks related to these services in respect of each securities settlement system:
Amendment 624 #
Proposal for a regulation
Article 57 – paragraph 3 – point j
Article 57 – paragraph 3 – point j
(j) it shall provide for an automatic reimbursement procedure of intraday credit and discourage overnight credit through deterrent sanctioningdebit interest rates.
Amendment 634 #
Proposal for a regulation
Article 59 – paragraph 1 – subparagraph 1
Article 59 – paragraph 1 – subparagraph 1
Without prejudice to the right of Member States to provide for and impose criminal sanctions, Member States shall lay down rules on the administrative sanctions and measures applicable in the circumstances defined in Article 60 to the persons responsible for breaches of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. Those sanctions and measures shall be effective, proportionate and dissuasive.
Amendment 635 #
Proposal for a regulation
Article 59 – paragraph 2
Article 59 – paragraph 2
2. The competent authorities shall be able to apply administrative sanctions and measures, subject to the conditions laid down in national law, to CSDs, designated credit institutions, the members of their management bodies and any other persons who effectively control their business as well as to any other legal or natural person who is held responsible for a breach under this Regulation or under national law.
Amendment 637 #
Proposal for a regulation
Article 60 – paragraph 2 – point a
Article 60 – paragraph 2 – point a
(a) a public statementwarning which indicates the person responsible for the breach and the nature of the breach;
Amendment 638 #
Proposal for a regulation
Article 60 – paragraph 2 – point g
Article 60 – paragraph 2 – point g
(g) in respect of a legal person, administrative pecuniary sanctions of up to 10,01 % of the total annual turnover of that person in the preceding business year; where the undertaking is a subsidiary of a parent undertaking, the relevant total annual turnover shall be the total annual turnover resulting from the consolidated account of the ultimate parent undertaking of the group in the preceding business year.
Amendment 639 #
Proposal for a regulation
Article 61 – paragraph 1 – introductory part
Article 61 – paragraph 1 – introductory part
1. WMember States shall ensure that, when determining the type and level of administrative sanctions or measures, the competent authorities shall take into account the following criteria, including when appropriate:
Amendment 640 #
Proposal for a regulation
Article 61 – paragraph 2
Article 61 – paragraph 2
Amendment 644 #
Proposal for a regulation
Article 68 a (new)
Article 68 a (new)
Regulation (EU) No 236/2012
Article 15
Article 15
Article 68a Amendment to Regulation (EU) No 236/2012 Article 15 is amended as follows: (1) in paragraph 1, point (a) is replaced by the following: "(a) where a natural or legal person who sells shares is not able to deliver the shares for settlement within seven business days after the day on which settlement is due, procedures are automatically triggered for the buy-in of the shares to ensure delivery for settlement;" (2) in paragraph 2, the first subparagraph is replaced by the following: "A central counterparty in a Member state that provides clearing services for shares shall ensure that procedures are in place which ensure that where a natural or legal person who sells shares fails to deliver the shares for settlement by seven days after the date on which settlement is due, such person must make daily payments for each day that the failure continues. Where the regulated market, MTF, OTF or SME growth market on which the transaction has been executed or to which the transaction has been reported notifies market participants accordingly, a shorter settlement period shall apply to that market." (3) the following paragraph is added: "3. Paragraphs 1 and 2 shall apply in accordance with Article 7(7) of Regulation (EU) No .../... [CSDR] and the regulatory technical standards adopted under Article 7(8) thereof.
Amendment 645 #
Proposal for a regulation
Article 68 – paragraph 1 a (new)
Article 68 – paragraph 1 a (new)
Directive 98/26/EC
Article 2
Article 2
1a. In Article 2, point (p) is replaced by the following: "(p) system operator’ shall mean the entity or entities legally responsible for the operation of a system. A system operator may also act as a settlement agent, central counterparty or clearing house. Only CSDs authorised in accordance with Regulation (EU) No xxx/xxx [CSDR] and central banks shall be permitted to be system operators."
Amendment 649 #
Proposal for a regulation
Annex 1 – section A – point 3
Annex 1 – section A – point 3
3. Operating a securities settlement system as designated under Directive 98/26/EC (‘settlement service’).
Amendment 669 #
Proposal for a regulation
Annex 1 – section C – point 1 – introductory part
Annex 1 – section C – point 1 – introductory part
1. Banking type of services for the participants to a securities settlement system related to the settlement servicshall contribute to the CSDs’ role of enhancing safety, efficiency and transparency of the securities markets. The credit institution of the CSD shall be limited to provide only the services listed in Annex 1 of Directive 20XX/XX/EU (CRD), sections 1, 2, 4, 6, 7b, and 7e, such as:
Amendment 670 #
Proposal for a regulation
Annex 1 – section C – point 1 – point a
Annex 1 – section C – point 1 – point a
Amendment 673 #
Proposal for a regulation
Annex 1 – section C – point 1 – point b
Annex 1 – section C – point 1 – point b
Amendment 675 #
Proposal for a regulation
Annex 1 – section C – point 1 – point c
Annex 1 – section C – point 1 – point c
Amendment 676 #
Proposal for a regulation
Annex 1 – section C – point 1 – point d
Annex 1 – section C – point 1 – point d
(d) Lending securities and cash (in line with CRD, Annex 1, section 2).
Amendment 678 #
Proposal for a regulation
Annex 1 – section C – point 1 – point d a (new)
Annex 1 – section C – point 1 – point d a (new)
(d a) Acceptance of deposits (in line with CRD, Annex 1, section 1);
Amendment 680 #
Proposal for a regulation
Annex 1 – section C – point 2 – point a
Annex 1 – section C – point 2 – point a
(a) Providing cash accounts for settlement and accepting cash deposits from the holders of securities accounts (in line with CRD, Annex 1, section 4 and section 7b);
Amendment 682 #
Proposal for a regulation
Annex 1 – section C – point 2 – point b
Annex 1 – section C – point 2 – point b
(b) Lending securities to the holders of securities accounts (in line with CRD, Annex 1, section 6 and section 7e);
Amendment 684 #
Proposal for a regulation
Annex 1 – section C – point 2 – point c – point i
Annex 1 – section C – point 2 – point c – point i
(i) Pre-financing income and redemption proceeds (in line with CRD, Annex 1, section 2);
Amendment 685 #
Proposal for a regulation
Annex 1 – section C – point 2 – point c – point ii
Annex 1 – section C – point 2 – point c – point ii
Amendment 686 #
Proposal for a regulation
Annex 1 – Section C – point 2 – point c – point ii a (new)
Annex 1 – Section C – point 2 – point c – point ii a (new)
(ii a) Perform its own asset, liability and capital management related to sections 1, 2, 4, 6, 7b and 7e of Annex 1 of Directive 20XX/XX/EU (CRD) .