43 Amendments of Sven GIEGOLD related to 2020/0267(COD)
Amendment 143 #
Proposal for a regulation
Recital 3
Recital 3
(3) The Union financial services legislation was not designed with DLT and crypto-assets in mind40 , and there are provisions in existing EU financial services legislation that may preclude or limit the use of DLT in the issuance, trading and settlement of crypto-assets which qualify as financial instruments. There is also currently a lack of market infrastructures using DLT and providing trading and settlement services for crypto-assets that qualify as financial instruments. Without a secondary market able to provide liquidityThe development of a secondary market for crypto-assets and to kenable investors to buy and sell such assets, the primary market for crypto- assets that qualify as financial instruments will never expand ised securities could bring multiple benefits in terms of enhanced efficiency, transparency and competition in relation to trading a sustainable waynd settlement activities. _________________ 40European Securities and Markets Authority’s, Report with advice on Initial Coin Offerings and Crypto-Assets (ESMA50-157-1391)
Amendment 154 #
Proposal for a regulation
Recital 5
Recital 5
(5) In order to allow for the development of crypto-assets that qualify as financial instruments and DLT, while preserving a high level of financial stability, market integrity, transparency and investor protection and avoiding regulatory arbitrage, it would be useful to create a pilot regime forto test DLT market infrastructures. A pilot regime for DLT market infrastructures should allow such DLT market infrastructures to be temporarily exempted from some specific requirements under the Union financial services legislation that could otherwise prevent them from developing solutions for the trading and settlement of transactions in crypto-assets that qualify as financial instruments, without weakening any existing requirements and safeguards applied to traditional market infrastructures. In addition, DLT market infrastructures should have in place adequate safeguards to ensure effective protection of investors related to the use of DLT and define clear lines of responsibility and be liable to clients for any losses due to operational failures. The pilot regime should also enable the European Securities and Markets Authorities (ESMA) and competent authorities to draw lessons from and gain experience on the opportunities and specific risks created by crypto-assets that qualify as financial instruments, and by their underlying technology.
Amendment 164 #
Proposal for a regulation
Recital 8
Recital 8
(8) A DLT MTF should be a multilateral trading facility that is operated by an investment firm or a market operator that operate the business or a regulated market and maybe the regulated market itself, authorised under Directive 2014/65/EU (Markets in Financial Instruments Directive, MiFID II), and that has received a specific permission under this Regulation. Such a DLT MTF should be subject to all the requirements applicable to a multilateral trading facility under the framework of Directive 2014/65/EU (Markets in Financial Instruments Directive, MiFID II), Regulation EU No 600/2014 of the European Parliament and of the Council (the Markets in Financial Instruments Regulation, MiFIR)41 , or any other EU financial services legislation, except if it has been granted one or several exemptions by its national competent authority, in accordance with this Regulation and Directive (EU) .../... of the European Parliament and of the Council42 for the requirements from which an exemption has been granted by ESMA in accordance with this Regulation. In order to allow competition, while preserving a level playing field and high standards in terms of investor protection, market integrity and financial stability, new entrants should be able to access the pilot regime, as long as they comply with the same requirements applicable to authorised investment firms under Directive 2014/65/EU (MiFID) and any other Union financial services legislation, except for any exemptions granted in accordance with this Regulation. _________________ 41Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, p. 84) 42Proposal for a Directive of the European Parliament and of the Council amending Directives 2006/43/EC, 2009/65/EC, 2009/138/EU, 2011/61/EU, EU/2013/36, 2014/65/EU, (EU) 2015/2366 and EU/2016/2341 - COM(2020)596
Amendment 171 #
Proposal for a regulation
Recital 10
Recital 10
(10) A DLT securities settlement system should be a securities settlement system operated by a CSD authorised under Regulation (EU) No 909/2014 (the Central Securities Depositories Regulation) that has received a specific permission under this Regulation. A DLT securities settlement system, and the CSD operating it, should be subject to the relevant requirements of Regulation (EU) No 909/2014 (the Central Securities Depository Regulation), except where the national competent authority has granted the CSD operating the DLT securities settlement system with one or severalfor the requirements from which an exemption has been granted by ESMA to the CSD operating the DLT securities settlement system, in accordance with this Regulation. In order to allow competition, while preserving a level playing field and high standards in terms of investor protection, market integrity and financial stability, new entrants should be able to access the pilot regime, as long as they comply with the requirements applicable to an authorised CSD under Regulation (EU) No 909/2014, in a manner proportionate to the nature, scale and risks of their business, and with any other Union financial services legislation, except for the exemptions, granted in accordance with this Regulation. In order to ensure business continuity, while also ensuring fair competition, new entrants should make arrangements with authorised CDS, which should offer to conclude such arrangements in a non-discriminatory manner against a reasonable commercial fee based on actual costs.
Amendment 221 #
Proposal for a regulation
Recital 33
Recital 33
(33) The specific permission granted to a DLT market infrastructure should follow the same procedures as the authorisation of a traditional MTF, or a CSD where such a CSD is seeking to operate a new securities settlement system. However, when applying for a permission, the applicant DLT infrastructure should indicate the exemptions it would be seeking. Before granting a permission to a DLT market infrastructure, the competent authority should consult ESMA. ESMA should issue a non-binding opinion andIn line with the Union objective to progress towards a true Capital Markets Union and in order to ensure a consistent and uniform application of the pilot regime, while preventing supervisory fragmentation, ESMA should have a direct supervisory mandate for granting a permission to a DLT marke any recommendations on the application or the exemptions requested.t infrastructure and any exemptions under this Regulation. In order to ensure effective cooperation and exchange of relevant information, ESMA should also consult the national competent authorities of the otheand other relevant authorities, where appropriate, on the operators of DLT market infrastructures authorised in their Member States. Where iassuessing its non-binding opinionthe application and the exemptions requested, ESMA should aim at ensuring financial stability, market integrity and investor protection. In order to ensure as well as the level-playing field and fair competition across the single market, ESMA’s non-binding opinion should also aim at ensuring the consistency and proportionality of the exemptions granted by different competent authorities across the Union.
Amendment 249 #
Proposal for a regulation
Article 2 – paragraph 1 – point 1
Article 2 – paragraph 1 – point 1
(1) ‘distributed ledger technology’ or ‘DLT’ means a class of technologies which support the distributed recording of encrypted datadistributed ledger technology as defined in Regulation xxx (MiCA);
Amendment 269 #
Proposal for a regulation
Article 2 – paragraph 1 – point 21 – point c
Article 2 – paragraph 1 – point 21 – point c
(c) otherwise designated by the Member StatesESMA for the purposes of overseeing the application of this Regulation.
Amendment 281 #
Proposal for a regulation
Article 3 – paragraph 1 – point b a (new)
Article 3 – paragraph 1 – point b a (new)
(b a) units in collective investment undertakings, with an issuance size of less than EUR 500 million.
Amendment 287 #
Proposal for a regulation
Article 3 – paragraph 3
Article 3 – paragraph 3
3. The total market value of DLT transferable securities recorded in a CSD operating a DLT securities settlement system shall not exceedA CSD operating a DLT securities settlement system may admit new securities until the total market value of DLT transferable securities recorded reaches EUR 2.5 billion. Where a DLT MTF records the DLT transferable securities instead of a CSD, in accordance with paragraphs 2 and 3 of Article 4, it may admit new securities until the total market value of the DLT transferable securities recorded by the investment firm or market operator operating the DLT MTF shall not exceedreaches EUR 2.5 billion.
Amendment 296 #
Proposal for a regulation
Article 3 – paragraph 5 – subparagraph 1
Article 3 – paragraph 5 – subparagraph 1
Where the total market value of the DLT transferable securities reported under paragraph 1, has reached EUR 2.23.5 billion, the investment firm or market operator operating the DLT MTF concerned, or the CSD operating the DLT securities settlement system concerned shall activate the transition strategy, referred to in Article 6(6). They shall notify the competent authority of the activation of their transition strategy, in their monthly report and of the time-horizon for such transition.
Amendment 298 #
Proposal for a regulation
Article 3 – paragraph 5 – subparagraph 2
Article 3 – paragraph 5 – subparagraph 2
Amendment 300 #
Proposal for a regulation
Article 4 – paragraph 1 – introductory part
Article 4 – paragraph 1 – introductory part
1. A DLT MTF shall be subject to all the requirements applicable to an MTF under Directive 2014/65/EU, except in relation to an exemption granted in accordance with paragraph 1a (new), and Regulation (EU) No 2014/600, except ifand in addition the investment firm or the market operator operating the DLT MTF:
Amendment 304 #
Proposal for a regulation
Article 4 – paragraph 1 – point a
Article 4 – paragraph 1 – point a
Amendment 305 #
Proposal for a regulation
Article 4 – paragraph 1 a (new)
Article 4 – paragraph 1 a (new)
1 a. At its request, an investment firm or market operator operating a DLT MTF may be exempted by ESMA from the application of Article 19 of Directive 2014/65/EU (MiFID) and may be permitted, under the rules governing access referred to in Article 18(3) of Directive 2014/65/EU (MiFID) and for a maximum of four years, to admit natural persons to the DLT MTF as members or participants, provided that those persons fulfil the following requirements: (a) they are of sufficiently good repute and are fit and proper; (b) they have sufficient level of trading ability, competence and experience, including knowledge of the trading and the functioning of DLT;and (c) they have given informed consent to be included in the pilot regime and are adequately informed of its experimental nature and the potential risks associated with it. Where ESMA grants the exemption referred to in the first subparagraph, it may impose additional investor protection measures for the protection of natural persons admitted as members of, or participants in, the DLT MTF. Such measures shall be proportionate to the risk profile of the participants or members.
Amendment 306 #
Proposal for a regulation
Article 4 – paragraph 1 b (new)
Article 4 – paragraph 1 b (new)
1 b. ESMA shall develop draft regulatory technical standards to specify: (a) the criteria for assessing the fitness and propriety of natural persons for the purposes of anti-money laundering and combatting the financing of terrorism; (b) the criteria for assessing the ability, competence and experience required under Article 4(1a) and Article 5(4); (c) the investor protection measures referred to in Article 4(1). ESMA shall submit those draft regulatory technical standards to the Commission by... [six months after the date of entry into force of this Regulation]. Power is conferred on the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Amendment 314 #
Proposal for a regulation
Article 4 – paragraph 3 – introductory part
Article 4 – paragraph 3 – introductory part
3. Where an investment firm or a market operator operating a DLT MTF has requested an exempt permission under paragraph 2, it shall ensure compliance with all the requirements applicable to a CSD operating a DLT under Regulation (EU) No 909/2014 in a manner proportionate to the nature, scale and risks of its business and shall ensure, by means of robust procedures and arrangements that, the DLT MTF:
Amendment 321 #
Proposal for a regulation
Article 4 – paragraph 3 – point d
Article 4 – paragraph 3 – point d
(d) provides clear, accurate and timely information in relation to the settlement of transactions, including settlement finality, by defining the moment from which transfer orders or other pre-identified instructions may not be revoked by a member, participant, issuer or client, in accordance with Article 39 of Regulation (EU) No 909/2014;
Amendment 325 #
Proposal for a regulation
Article 4 – paragraph 3 – point g
Article 4 – paragraph 3 – point g
(g) either prevents or, if not possible, addresses settlement fails, in accordance with Articles 6 and 7 of Regulation (EU) No 909/2014 and Commission Delegated Regulation (EU) 2018/1229, mutatis mutandis.
Amendment 339 #
Proposal for a regulation
Article 5 – paragraph 3
Article 5 – paragraph 3
Amendment 346 #
Proposal for a regulation
Article 5 – paragraph 4 – point b a (new)
Article 5 – paragraph 4 – point b a (new)
(b a) have given informed consent to be included in the pilot regime provided for in this Regulation and have been adequately informed of its experimental nature and the risks associated with it.
Amendment 373 #
Proposal for a regulation
Article 6 – paragraph 1 – subparagraph 1
Article 6 – paragraph 1 – subparagraph 1
They shall also have up-to-date, clear and detailed publically available written documentation, which may be made available by electronic means, defining the rules under which the DLT market infrastructure shall operate, including the agreed upon associated legal terms defining the rights, obligations, responsibilities and liabilities of the operator of the DLT market infrastructure, as well as that of the members, participants, issuers and/or clients using the DLT market infrastructure concerned. Such legal arrangements shall specify the governing law, the pre-litigation dispute settlement mechanism, any insolvency protection measures under Directive 98/26/EC, and the jurisdiction for bringing legal action.
Amendment 377 #
Proposal for a regulation
Article 6 – paragraph 2
Article 6 – paragraph 2
2. A CSDThe operating a DLT securities settlement system, and an investment firm or a market operator operating a DLT MTF requesting an exemption from Article 3(2) of Regulation (EU) No 909/2014,ors of DLT market infrastructures shall at all times remain fully responsible for the services and activities they carry out under this Regulation, including the operation of their DLT. They shall establish rules on the functioning of the DLT they operate, including the rules for accessing the distributed ledger technology, the participation of the validating nodes, addressing potential conflicts of interest, and risk management including any risk mitigation measures. to ensure investor protection and financial stability. Where the operators of DLT market infrastructures outsource part of their services and activities they shall ensure that the conditions laid down in Article 30 of Regulation (EU) No 909/2014 are fully complied with, mutatis mutandis.
Amendment 388 #
Proposal for a regulation
Article 6 – paragraph 5 – subparagraph 3
Article 6 – paragraph 5 – subparagraph 3
The overall IT and cyber arrangements, referred to in paragraph 4, shall ensure that the said funds, collateral and DLT transferable securities, as well as the means of access to such assets, are protected from the risks of unauthorised access, hacking, degradation, loss, cyber-attack, theft, fraud, negligence or otheftr serious operational malfunctions.
Amendment 389 #
Proposal for a regulation
Article 6 – paragraph 5 – subparagraph 3 a (new)
Article 6 – paragraph 5 – subparagraph 3 a (new)
The operator of a DLT market infrastructure shall be liable to its clients for any loss of funds, collateral and DLT transferable securities, or of means of access to such assets, resulting from unauthorised access, hacking, degradation, loss, fraud, cyber-attack, or from theft or negligence or other serious malfunctions up to an amount not exceeding the market value of the assets lost. The operator of a DLT market infrastructure shall establish transparent and adequate arrangements to ensure investor protection and provide clients with mechanisms for handling complaints and procedures for compensation or redress in cases of investor detriment as a result of the aforementioned serious malfunctions or of the cessation of the business due to any of the circumstances referred to in Article 7, paragraph 6, or Article 8, paragraph 6, as appropriate. The operator of a DLT market infrastructure shall have in place sufficient prudential safeguards in the form of own funds or insurance policy against any liability resulting from damages caused to its clients due to any of the aforementioned serious malfunctions and ensure investor protection.
Amendment 391 #
Proposal for a regulation
Article 6 – paragraph 6 a (new)
Article 6 – paragraph 6 a (new)
6 a. Where a DLT market infrastructure is authorised to operate with exemptions, in accordance with Article 7 (1a) and Article 8 (1a), and has not applied for authorisation under Directive 2014/65/EU or under Regulation (EU) No 909/2014, the transition strategy shall include specific arrangements with CSDs authorised under Regulation (EU) No 909/2014 to ensure business continuity in the best interest of the members, participants, issuers and clients. CSDs authorised under Regulation (EU) No 909/2014 shall offer to conclude such arrangements in a non-discriminatory manner against a reasonable commercial fee based on actual costs.
Amendment 394 #
Proposal for a regulation
Article 7 – paragraph 1 a (new)
Article 7 – paragraph 1 a (new)
1 a. By way of derogation from paragraph 1 of this Article, any legal person that is not authorised as an investment firm in accordance with Directive 2014/65/EU may apply for a specific permission to operate a DLT MTF in accordance with paragraph 2 of this Article, provided that it complies with the authorisation requirements and all other obligations laid down in Directive 2014/65/EU, other than those requirements from which the applicant has been granted an exemption under this Regulation.
Amendment 398 #
Proposal for a regulation
Article 7 – paragraph 2 – point d a (new)
Article 7 – paragraph 2 – point d a (new)
(d a) evidence that the applicant has in place sufficient prudential safeguards to meet its liabilities and compensate its clients in the event of a serious malfunction of the DLT, as referred to in Article 6 (5b);
Amendment 399 #
Proposal for a regulation
Article 7 – paragraph 2 – point e a (new)
Article 7 – paragraph 2 – point e a (new)
(e a) a description of the arrangements to ensure investor protection and the mechanisms for handling complaints and consumer redress, as referred to in Article 6 a (new);
Amendment 403 #
Proposal for a regulation
Article 7 – paragraph 3 – introductory part
Article 7 – paragraph 3 – introductory part
3. Before deciding on an application for a specific permission to operate a DLT MTF under this Regulation, ESMA shall notify the competent authority of the home Member State shall notify and provide all relevant information on the DLT MTF to ESMA, an explanation of the exemptions requested, their justifications and any compensatory measures proposed by the applicant or required by the competent authority. and, where the DLTT MTF has requested permission to record and settle securities in accordance with Article 4 (2), shall also notify the relevant authorities specified in Article 12 of Regulation (EU) No 909/2014, and shall consult those authorities on the features of the securities settlement system operated by the applicant.
Amendment 406 #
Proposal for a regulation
Article 7 – paragraph 3 – subparagraph 1
Article 7 – paragraph 3 – subparagraph 1
Within three months of receipt of the notifapplication, ESMA shall provide the competent authority with a non-binding opinissue a decision on the application and shall make any rerequire any additional commpendsationory measures on the exemptions requested by the applicant, that are necessary to ensure investor protection, market integrity and financial stability. ESMA shall alsodopt a risk-based approach and promote the consistency and proportionality of exemptions granted by competent authorities to investment firms or market operators operating DLT MTFs across the Union. In order to do so, ESMA, shall consult the competent authorities of the other Member States in a timely manner and take the utmost account of their views in its opinion.
Amendment 412 #
Proposal for a regulation
Article 7 – paragraph 5 – introductory part
Article 7 – paragraph 5 – introductory part
5. The specific permission granted to either an investment firm or a market operator to operate a DLT MTF shall be valid throughout the Union for up to sixfour years from the date of the specific permission. It shall specify the exemptions that are granted, in accordance with Article 4.
Amendment 428 #
Proposal for a regulation
Article 8 – paragraph 2 – point d a (new)
Article 8 – paragraph 2 – point d a (new)
(d a) evidence that the applicant has in place sufficient prudential safeguards to ensure consumer and investor protection and a description of the arrangements in place to ensure consumer and investor protection and of the mechanisms for handling complaints and consumer redress, as referred to in Article 6a (new);
Amendment 430 #
Proposal for a regulation
Article 8 – paragraph 2 a (new)
Article 8 – paragraph 2 a (new)
2 a. By way of derogation from paragraph 1, any legal person that is not authorised as a CSD under Regulation (EU) No 909/2014 may apply for a specific permission to operate a DLT securities settlement system in accordance with paragraph 2 of this Article, provided that it complies with the authorisation requirements and all other obligations laid down in Regulation (EU) No 909/2014, in a manner proportionate to the nature, scale and risks of the business, except for those requirements from which the applicant has been granted an exemption under this Regulation.
Amendment 433 #
Proposal for a regulation
Article 8 – paragraph 3 – introductory part
Article 8 – paragraph 3 – introductory part
3. Before deciding on an application for a specific permission to operate a DLT MTFoperating securities settlement system under this Regulation, ESMA shall notify the competent authority shall notify and provide all relevant information on the DLTof the home Member State and the relevant authorities specurities settlement system to ESMA and an explanation of the exemptions requested, their justification and any compensatory measures proposed by the applicant or required by the competent authorityified in Article 12 of Regulation (EU) No 909/2014, and shall consult those authorities on the features of the securities settlement system operated by the applicant.
Amendment 436 #
Proposal for a regulation
Article 8 – paragraph 3 – subparagraph 1
Article 8 – paragraph 3 – subparagraph 1
Within three months of receipt of the notifapplication, ESMA shall provide the competent authority with a non-binding opinissue a decision on the application and shall make any rerequire any additional commpendsationory measures on the exemptions requested by the applicant, that are necessary to ensure investor protection, market integrity and financial stability. ESMA shall alsodopt a risk-based approach and promote the consistency and proportionality of exemptions granted by competent authorities to CSDs operating DLT securities settlement systems, across the Union. In order to do so, ESMA, shall consult the competent authorities of the other Member States in a timely manner and take the utmost account of their views in its opinion.
Amendment 449 #
Proposal for a regulation
Article 8 – paragraph 7 a (new)
Article 8 – paragraph 7 a (new)
Amendment 464 #
Proposal for a regulation
Article 9 – paragraph 4 a (new)
Article 9 – paragraph 4 a (new)
4 a. ESMA shall make the reports referred to in the first subparagraph publicly available on its website.
Amendment 466 #
Article 9 a Reporting of breaches and protection of reporting persons Directive (EU) 2019/1937 shall apply to the reporting of breaches of this Regulation and the protection of persons reporting such breaches. ESMA shall provide one or more secure communication channels for reporting breaches of this Regulation and comply with the requirements set out in the Directive (EU) 2019/1937.
Amendment 468 #
Proposal for a regulation
Article 10 – paragraph 1 – introductory part
Article 10 – paragraph 1 – introductory part
1. FivThree years from the entry into application of this Regulation, at the latest, ESMA shall present a comprehensive report to the Commission on:
Amendment 477 #
(h) any risks presented by the use of a DLT to investor protection, market integrity and financial stability, including novel types of legal, systemic and operational risks, which are not sufficiently addressed by existing rules and any unintended effects on liquidity and volatility and financial stability;
Amendment 480 #
Proposal for a regulation
Article 10 – paragraph 1 – point j
Article 10 – paragraph 1 – point j
(j) theany benefits resulting from the use of a DLT, in terms of anydditional liquidity and financing to start-ups and SMEs, any safety and efficiency improvements and risk reductions across the entire trading and post-trading chain, including without limitation, with regard to the recording and safekeeping of DLT transferable securities, the traceability of transactions, corporate action and enhanced compliance with know your customer and anti-money laundering processes, corporate actions and direct exercise of investor rights via smart contracts, reporting and supervision functions at the level of the DLT market infrastructure;
Amendment 483 #
Proposal for a regulation
Article 10 – paragraph 1 – point l a (new)
Article 10 – paragraph 1 – point l a (new)
(l a) the potential implications resulting from an increase of the thresholds referred to in Article 3, taking into account in particular systemic considerations and different types of DLT;
Amendment 492 #
Proposal for a regulation
Article 10 – paragraph 2 – point d
Article 10 – paragraph 2 – point d