BETA

34 Amendments of Sven GIEGOLD related to 2017/0359(COD)

Proposal for a regulation
Recital 27 a (new)

(27a) The asset management sector has grown strongly in recent years in terms of assets under management. It has also experienced strong concentration as a small number of firms have become much larger than their competitors. This has increased the potential for systemic risk emanating from the activities of investment firms, e.g. the risks from liquidity mismatches between investment firms’ investment assets and the redemption terms granted to their customers. Recent work conducted by the Financial Stability Board and the International Organization of Securities Commissions is contributing to the understanding of those risks, but has not yet progressed enough to be translated into comprehensive macroprudential regulation and supervision. Where appropriate, this Regulation integrates certain recommendations from this evolving body of work, but leaves the elaboration of a comprehensive framework to the mandatory review three years after the entering into force of this Regulation.

2018/06/05
Committee: ECON

Proposal for a regulation
Recital 29 a (new)

(29a) The asset management sector, which comprises MiFID firms and other types of investment managers, some of which also operate with MiFID licences, has grown strongly in recent years and has experienced strong concentration as a small number of firms have become much larger than their competitors. These firms have started to play an important role in the intermediation of savings and capital allocation, regardless of whether they follow an active or a passive investment strategy. They have even started to influence the strategies of firms they are invested in. Their increased influence should be matched by increased transparency and accountability. Therefore, it seems appropriate that large asset managers be subjected to specific disclosure requirements including, but not limited to, their asset allocation, large holdings, voting behaviour at annual general meeting, influence on the business strategy through investor meetings and the volume of assets or number of funds that are sustainably invested or managed. The latter is also part of the mainstreaming of sustainability criteria into the activities of financial sector institutions. Apart from addressing these concerns, the additional disclosure requirements will prevent the distortion of competition in the Internal Market and also ensure an international level playing field as asset managers in the U.S. are already subject to reporting requirements on their holdings.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 4 – paragraph 1 – point 33 a (new)

(33a) ‘liquidity mismatch’ means the possible mismatch between the liquidity of a fund’s investment assets and the redemption terms for fund units. Under certain conditions, especially when securities markets are stressed and/or when many fund clients want to redeem their shares at the same time (redemption run scenario), such mismatches can cause financial instability and contagion as funds find it difficult to liquidate investment assets quickly in an already adverse market;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 4 – paragraph 1 – point 51 a (new)

(51a) 'large asset manager' is a group of individual undertakings belonging to a financial holding company, or as an investment holding company, or as a mixed financial holding company that together have over EUR 100 billion client assets under management, and that comprises at least one investment firm and any number of AIFMs as defined in Article 2(1) of Directive 2011/61/EU, or management companies as defined in Article 2 (1b) of Directive 2009/65/EC;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 4 – paragraph 1 – point 51 b (new)

(51b) ‘third country large asset manager’ is an intermediate EU parent undertaking subject to the requirements of Article 51(4) of Directive [(EU) ----/-- [IFD].

2018/06/05
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 5 – point a

~~(a) specify the methods for measuring the K-factors in Title II of Part Three;~~deleted

2018/06/05
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 5 a (new)

5a. The EBA shall develop draft regulatory technical standards to specify the methods for measuring the K-factors in Title II of Part Three. EBA shall submit those draft regulatory technical standards to the Commission by 3 July 2020. 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.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 45 – paragraph 1

1. An investment firm that does not meet the conditions set out in Article 12(1) shall publicly disclose the information s~~pecified in this Part~~et out in Articles 46 to 51 on the same day it publishes its annual financial statements.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 45 – paragraph 1 a (new)

1a. A large asset manager and third country large asset manager shall publicly disclose the information specified in this Part on the same day it publishes its annual financial statements.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 45 a (new)

Article 45a Disclosure of environmental, social and governance (ESG)-related factors and risks 1. From [2 years after entry into force of this Regulation], investment firms shall disclose information on environmental, social and governance (ESG)-related factors and risks. The competent authority may waive the frequency of the requirement set out in paragraph 1 for small and non- interconnected investment firms pursuant to Article 12. 2. Investment firms referred to in paragraphs 1 and 2 of Article 45 shall disclose the following information: (a) A description of specific environmental, social and governance risks, which could arise in the short-, medium-, or long-term and could have a material and financial impact on the investment firm; (b) A description of the processes that are used to determine which risks could have a material or financial impact on the investment firm and how these are integrated into the overall risk management; (c) A description of significant concentrations of credit exposures against greenhouse gas-related assets, including risks related to the depreciation of assets, due to regulatory change if these are material; (d) A description of the impact of environmental, social and governance risks on the business, strategy and financial planning of the investment firm, if these are material; (e) A description of the processes that the institution uses to identify, evaluate and manage these risks; (f) The parameters that the investment firm uses to evaluate the impact of short-, medium- and long-term environmental, social and governance risks on lending and financial intermediary services, if these are material; (g) A description of the role of the board with regard to the evaluation and management of environmental, social and governance risks; (h) Whether the fiduciary duty within the investment firm encompasses ESG factors; (i) Whether model contracts with clients incorporate the transmission of the beneficiary interest as well as clear expectations on the identification and integration of ESG risks; (j) Whether the do-no-harm principle according to ESG risk analysis is effectively integrated by the investment firm’s management. 6. For the purpose of paragraph 1 EBA shall develop by 1 June 2020 draft regulatory technical standards to specify further details on the disclosure requirements provided for in paragraph 1. Power is conferred on the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – introductory part

Article 51a Investment policy 1. Subsidiaries of large asset managers and third country large asset managers shall disclose on an individual basis the following information regarding their investment policy, in accordance with Article 45:

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – point a

(a) the participation rate for all direct and indirect holdings where beneficial ownership exceeds 5% of any class of voting equity securities, broken down by Member State and sector;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – point b

(b) a description of the investment objective regarding the entities held according to point (a);

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – point c

(c) the number and dates of all investor meetings and discussions that have taken place within the period covered by the disclosure report between any representative of any subsidiary and members of the management or the supervisory board of the entities held according to (a) and a description of the issues discussed, in particular where they relate to the business strategy;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – point d

(d) the voting behaviour at shareholders‘ meetings, in particular the percentage of approval of proposals put forward by the management of the entities held according to (a), and the recurrence to proxy advisor firms;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – point e

(e) the voting guidelines including, but not limited to, a description regarding participation rights of employees as well as other social, environmental and governance issues;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – point f

(f) the amount of AUM, broken down by actively and passively managed, and the share of AUM that are sustainably invested;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – point g

(g) the number of funds and portfolios as well as the share of funds and portfolios that are sustainably managed;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 1 – point h

(h) a description of the engagement in contracts with public procurement or central banks in their supervisory and monetary function and details on fees and commissions received by any firm being part of the group;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 51 a (new) – paragraph 2

2. EBA, in consultation with ESMA, shall develop draft implementing technical standards to specify templates for disclosure under paragraph 1. EBA shall submit those draft implementing technical standards to the Commission by [nine months from the date of entry into force of this Regulation]. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1093/2010.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 52 – paragraph 2 a (new)

2a. Large asset managers and third country large asset managers subject to Article 51(4) of Directive (EU) ----/-- [IFD] shall submit an annual report to the competent authorities about their methods for liquidity mismatch management, including historical ratios of fund unit redemptions to client assets under management.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 59 – paragraph 1 – point f a (new)

(fa) the provisions set out in Article 51a on public disclosure of investment policy of large (third country) asset managers;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 59 – paragraph 1 – point f b (new)

(fb) the appropriateness of not applying restrictions to ancillary services undertakings as defined in Article 4(1)(18) of Regulation (EU) No 575/2013.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 60 – paragraph 1 – point 2 – point a

Regulation (EU) No 575/2013
Article 4 – paragraph 1 – point 1 – subparagraph 1 a (new)

The ECB may at any time, on its own initiative and with consent from a national competent authority or upon request by a national competent authority, decide to treat as a credit institution and thus refer to ECB supervision an undertaking that carries out any of the activities referred to in points (3) and (6) of Section A of Annex I of Directive 2014/65/EU, even where none of the conditions mentioned in points (i), (ii) and (iii) are met, if the following conditions apply: (a) the undertaking is neither a commodity and emissions allowance dealer, nor a collective investment undertaking, nor an insurance undertaking; (b) the undertaking's business activities are similar to those commonly associated with undertakings that take deposits or other repayable funds from the public and grant credit on their own accounts ('banks'). These activities include, but are not limited to, the following: – lending to businesses; – offering risk-free investment products for idle cash balances to the public; – high degrees of on-balance sheet or off-balance sheet leverage; – high degree of interconnectedness with other institutions as defined in point (3) of paragraph 1, or other financial institutions as defined in point (26) of paragraph 1.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point -1 (new)

Regulation (EU) No 600/2014
Title III – title

(-1) The title of Title III is replaced by the following: "TRANSPARENCY FOR SYSTEMATIC INTERNALISERS AND INVESTMENT FIRMS TRADING OTC AND TICK SIZE REGIME FOR SYSTEMATIC INTERNALISERS"

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point -1 a (new)

Regulation (EU) No 600/2014
Article 17 a (new)

(-1a) The following Article is inserted: "Article 17a Tick sizes Systematic internalisers’ quotes and price improvements on those quotes shall comply with tick sizes set in accordance with Article 49 of Directive 2014/65/EU. ESMA shall develop draft regulatory technical standards to specify further the types and levels of quotes that are, in accordance with paragraph 1, subject to the tick size regime set out in Article 49 of Directive 2014/65/EU."

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point -1 b (new)

Regulation (EU) No 600/2014
Article 40 – paragraph 1 – subparagraph 2

(-1b) in Article 40(1), subparagraph 2 is replaced by the following: "A prohibition or restriction may apply in circumstances, or be subject to exceptions, specified by ESMA~~. “~~ and may directly be applied to a management company pursuant to Article 2(1)(c) of Directive 2009/65/EC and a AIFM pursuant to Article 4(1)(b) of Directive 2011/61/EU.” Or. en (https://eur-lex.europa.eu/legal- content/EN/TXT/HTML/?uri=CELEX:32014R0600&from=FR)

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point -1 c (new)

Regulation (EU) No 600/2014
Article 42 – paragraph 2 – subparagraph 3

(-1c) In Article 42(2), subparagraph 3 is replaced by the following: “A prohibition or restriction may apply in circumstances, or be subject to exceptions, specified by the competent authority.” and may directly be applied to a management company pursuant to Article 2(1)(c) of Directive 2009/65/EC and a AIFM pursuant to Article 4(1)(b) of Directive 2011/61/EU.” Or. en (https://eur-lex.europa.eu/legal- content/EN/TXT/HTML/?uri=CELEX:32014R0600&from=FR)

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point 2 – point a

Regulation (EU) No 600/2014
Article 47 – paragraph 1 – subparagraph 1 – introductory part

The Commission may adopt a decision in accordance with the ~~examination~~ procedure referred to in Article 5~~1(2)~~0 in relation to a third country stating that the legal and supervisory arrangements of that third country ensure all of the following:

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point 2 – point a

Regulation (EU) No 600/2014
Article 47 – paragraph 1 – subparagraph 1 – point a

(a) that firms authorised in that third country comply with legally binding prudential organisational, internal control and business conduct requirements which have equivalent effect to the requirements set out in this Regulation, in Directive 2013/36/EU, in Regulation (EU) No 575/2013, in Directive (EU) ----/--[IFD] and in Regulation (EU)--- -/---[IFR] and in Directive 2014/65/EU and in the implementing measures adopted under those Regulations and Directives;

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point 2 – point a

Regulation (EU) No 600/2014
Article 47 – paragraph 1 – subparagraph 1 – point b

(b) that firms authorised in that third country are subject to effective supervision and enforcement ensuring compliance with the applicable legally binding prudential organisational, internal control and business conduct requirements; and

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point 2 – point a

Regulation (EU) No 600/2014
Article 47 – paragraph 1 – subparagraph 2

Where the services provided and the activities performed by third-country firms in the Union following the adoption of the decision referred to in the first subparagraph are likely to be of systemic importance for the Union, the ~~legally binding prudential and business conduct~~following requirements shall apply: – the legally binding requirements referred to in the first subparagraph may only be considered to have equivalent effect to the requirements set out in the acts referred to in that subparagraph after a detailed and granular assessment. For these purposes, the Commission shall also assess and take into account the supervisory convergence between the third country concerned and the Union. – third-country firms which pursuant to paragraph 1 provide services which are likely to be of systemic importance for the Union may only provide services in the Union if they are recognized by EBA. The EBA may recognise a third-country firm established in a third-country that has applied for recognition to provide certain services in the Union where: (a) the investment firm has provided EBA with its unconditional written consent, signed by the legal representative of the investment firm, to provide within 72 hours after service of a request by EBA any documents, records, information and data held by such investment firm at any time, and that EBA may access any of the investment firm business premises, as well as a reasoned legal opinion by an independent legal expert confirming that the consent provided is valid and enforceable under the relevant applicable laws; (b) the investment firm has put in place all necessary measures and procedures that ensure the effective compliance with the requirements laid down in paragraph 1 as well as with procedures to ensure compliance with requests addressed by EBA that appropriate action is taken within a set timeframe in relation with such requirements.

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point 2 – point b a (new)

Regulation (EU) No 600/2014
Article 47 – paragraph 2 a (new)

(ba) after second subparagraph, the following subparagraph is inserted: “The Commission is empowered to adopt delegated acts in accordance with Article 50 clarifying the conditions that the provision of services or performance of activities are required to fulfil in order to be considered as likely to be of systemic importance for the Union.”

2018/06/05
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 1 – point 2 – point c

Regulation (EU) No 600/2014
Article 47 – paragraph 5

5. ESMA shall monitor the regulatory and supervisory developments, the enforcement practices and other relevant market developments in third countries for which equivalence decisions have been adopted by the Commission pursuant to paragraph 1 in order to verify whether the conditions on the basis of which those decisions have been taken are still fulfilled. The Authority shall submit a ~~confidential~~ report on its findings to the Commission, the European Parliament and the Council on an annual basis.’’.

2018/06/05
Committee: ECON