Changes from plenary report to adopted text

Removed'2a. Derivative transactions that are exempt from or otherwise not subject to the clearing obligation under Article 4 of Regulation (EU) No 648/2012 shall not be subject to the trading obligation.';

Removed(19) in Article 32, the following paragraphs 7, 7a, 8 and 9 are added:

Removed‘7. Where ESMA considers that the suspension of the clearing obligation as referred to in Article 6a of Regulation (EU) No 648/2012 is a material change in the criteria for the trading obligation to take effect, as referred to in paragraph 5 of this Article, ESMA may request the Commission to suspend the trading obligation laid down in Article 28(1) and (2) of this Regulation for the same classes of OTC derivatives that are subject to the request to suspend the clearing obligation.

Removed7a. Where ESMA considers that certain events or developments which could adversely affect the liquidity available in the Union in certain or all derivatives that have been declared subject to the trading obligation, ESMA may request that the Commission temporarily suspend the application of the trading obligation laid down in Article 28(1) and (2) for those financial instruments.

RemovedThe temporary suspension referred to in the first subparagraph shall be valid for an initial period not exceeding three months from the date of publication of the implementing act referred to in paragraph 9. Such a suspensionmay be renewed for further periods not exceeding three months at a time if the grounds for the temporary suspension continue to be applicable.

Removed8. The request referred to in paragraphs 7 and 7a shall not be made public.

Removed9. After having received the request referred to in paragraph 7 and 7a, the Commission shall, without undue delay and, on the basis of the reasons and evidence provided by ESMA, do either of the following:

Removed(a) in an implementing act suspend the trading obligation for the classes of OTC derivatives that are subject to the request to suspend the clearing obligation;

Removed(b) reject the requested suspension.

RemovedFor the purposes of point (b), the Commission shall inform ESMA of the reasons why it rejected the requested suspension. The Commission shall immediately inform the European Parliament and the Council of that rejection and forward them the reasons provided to ESMA. The information provided to the European Parliament and the Council regarding the rejection and the reasons for that rejection shall not be made public.’;

Removed(20) the following Article 32a is inserted:

Removed‘Article 32a Stand-alone suspension of the trading obligation

Removed1. At the request of the competent authority of a Member State, the Commission may adopt an implementing act to suspend the derivatives trading obligation with respect to certain investment firms in accordance with the procedure referred to in Article 51 and after having consulted ESMA. The competent authority shall indicate why it considers that the conditions for a suspension are met. In particular, the competent authority shall demonstrate that an investment firm within its jurisdiction:

Removed(a) regularly receives requests for a quote for the derivatives subject to the derivatives trading obligation;

Removed(b) from a non-EEA counterpart which has no active membership on a EU trading venue that offers trading in the derivative subject to the trading obligation; and

Removed(c) regularly acts as a market maker in the derivative subject to the derivatives trading obligation.

Removed1a. At the request of the competent authority of a Member State, the Commission may adopt an implementing act to suspend the derivatives trading obligation with respect to certain financial counterparties in accordance with the procedure referred to in Article 51 and after having consulted ESMA. The competent authority shall indicate why it considers that the conditions for a suspension are met. In particular, the competent authority shall demonstrate that the financial counterparty within its jurisdiction:

Removed(a) regularly trades derivatives subject to the derivatives trading obligation on a specific market segment;

Removed(b) regularly trades derivatives with a non-EEA market maker which has no active membership on an EU trading venue that offers trading in the derivative subject to the trading obligation;

Removed(c) clears those derivatives in a CCP authorised in accordance with Regulation (EU) No 648/2012.

RemovedThe implementing acts referred to in the first subparagraph shall be adopted in accordance with the examination procedure referred to in Article 51.

Removed2. When assessing whether to suspend the trading obligation in accordance with paragraphs 1 and 1a, the Commission shall consider whether to suspend it for specific markets only, and shall take into account whether such suspension of the trading obligation would have a distortive effect on the clearing obligation laid down in Article 4(1) of Regulation (EU) No 648/2012.

RemovedThe Commission shall also contact the competent authorities of other Member States to assess whether investment firms in Member States other than that making the request in accordance with paragraph 1 are in a situation similar to those in the requesting Member State. The competent authorities of Member States that did not file a request pursuant to paragraph 1 and 1a may, after adoption of the implementing act mentioned in paragraph 1, request that investment firms that are in a situation similar to those in the requesting Member State are added to the implementing act. The competent authority of the Member State making that request shall indicate and demonstrate why it considers that the conditions for a suspension are also met.

Removed2a. The implementing acts referred to in paragraphs 1 and 1a shall be adopted in accordance with the examination procedure referred to in Article 51.

Removed3. The implementing act referred to in paragraphs 1 and 1a shall be accompanied by the evidence presented by the competent authority requesting the suspension.

Removed4. The implementing act referred to in paragraphs 1 and 1a shall be communicated to ESMA and shall be published in the ESMA register referred to in Article 34 of this Regulation.

Removed5. The Commission shall regularly review whether the grounds for the suspension of the derivatives trading obligation continue to apply.’;

Removed(21) Article 35 is amended as follows:

Removed(a) in paragraph 1, first subparagraph, the introductory wording is replaced by the following:

Removed‘1. Without prejudice to Article 7 of Regulation (EU) No 648/2012, a CCP shall accept to clear financial instruments on a non-discriminatory and transparent basis, including as regards collateral requirements and fees relating to access, regardless of the trading venue on which a transaction is executed.

RemovedThe requirement in the first subparagraph shall not apply to exchange-traded derivatives.

RemovedThe CCP shall in particular ensure that a trading venue has the right to non-discriminatory treatment of contracts traded on that trading venue in terms of:’;

Removed(b) paragraph 3 is replaced by the following:

Removed‘3. The CCP shall provide a written response to the trading venue either within three months of permitting access, on condition that a relevant competent authority has granted access pursuant to paragraph 4, or within three months of denying access. The CCP may deny a request for access only under the conditions specified in paragraph 6(a). Where a CCP denies access, it shall provide full reasons in its response and inform its competent authority in writing of the decision. Where the trading venue is established in a Member State other than the one of the CCP, the CCP shall also provide such notification and reasoning to the competent authority of that trading venue. The CCP shall provide access within three months of providing a positive response to the access request.’;

Removed(ba) paragraph 4 is replaced by the following:

Removed‘4. The competent authority of the CCP or that of the trading venue shall grant a trading venue access to a CCP only where such access would not threaten the smooth and orderly functioning of the markets, in particular due to liquidity fragmentation, or would not adversely affect systemic risk.

RemovedIf a competent authority refuses access, it shall issue its decision within two months following receipt of the request referred to in paragraph 2 and provide full reasons to the other competent authority, the CCP and the trading venue including the evidence on which the decision is based.’;

Removed(22) Article 36 is amended as follows:

Removed(a) in paragraph 1, the first subparagraph is replaced by the following:

Removed‘Without prejudice to Article 8 of Regulation (EU) No 648/2012, a trading venue shall, upon request, provide trade feeds on a non-discriminatory and transparent basis, including as regards fees related to access, to any CCP authorised or recognised by that Regulation that wishes to clear transactions in financial instruments that are concluded on that trading venue. That requirement shall not apply to:

Removed(a) any derivative contract that is already subject to the access obligations under Article 8 of Regulation (EU) No 648/2012;

Removed(b) exchange-traded derivatives.’;

Removed(b) paragraph 3 is replaced by the following:

Removed‘3. The trading venue shall provide a written response to the CCP within three months either permitting access, under the condition that the relevant competent authority has granted access pursuant to paragraph 4, or denying access. The trading venue may deny access only under the conditions specified pursuant to paragraph 6, point (a). When access is denied, the trading venue shall provide full reasons in its written response and forward that written response to its competent authority. Where the CCP is established in a different Member State than the trading venue, the trading venue shall also forward that written response to the competent authority of the CCP. The trading venue shall provide access within three months of providing a positive response to the access request.’;

Removed(ba) paragraph 4 is replaced by the following:

Removed‘4. The competent authority of the trading venue or that of the CCP shall grant a CCP access to a trading venue only where such access would not threaten the smooth and orderly functioning of the markets, in particular due to liquidity fragmentation, and where the trading venue has put in place adequate mechanisms to prevent such fragmentation, or would not adversely affect systemic risk.

RemovedIf a competent authority denies access it shall issue its decision within two months following receipt of the request referred to in paragraph 2 and provide full reasons to the other competent authority, the trading venue and the CCP including the evidence on which its decision is based.’;

Removed(c) paragraph 5 is deleted;

Removed(23) in Article 38, paragraph 1 is replaced by the following:

Removed‘1. A trading venue established in a third country may request access to a CCP established in the Union only if the Commission has adopted a decision in accordance with Article 28(4) relating to that third country.

RemovedA CCP established in a third country may request access to a trading venue in the Union subject to that CCP being recognised under Article 25 of Regulation (EU) No 648/2012.

RemovedCCPs and trading venues established in third countries shall only be permitted to make use of the access rights referred to in Articles 35 and 36 with regard to financial instruments covered by those Articles and provided that the Commission has adopted a decision in accordance with paragraph 3 of this Article, determining that the legal and supervisory framework of the third country is considered to provide for an effective equivalent system for permitting CCPs and trading venues authorised under foreign regimes access to CCPs and trading venues established in that third country.’;

Removed(24) in Article 38g(1), the introductory wording is replaced by the following:

Removed‘Where ESMA finds that a person listed in Article 38b(1), point (a), has not complied with any of the requirements laid down in Article 20, 21, 22, 22a, Article 22b or 26, or Title IVa, it shall take one or more of the following actions:’;

Removed(25) in Article 38h(1), the first subparagraph is replaced by the following:

Removed‘Where ESMA, in accordance with Article 38k(5), finds that a person listed in Article 38b(1), point (a), has intentionally or negligently not complied with any of the requirements provided for in Article 22, 22a, Article 22b or 26, or in Title IVa, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article.’;

Removed(26) the following Article 39a is inserted:

Removed‘Article 39a Ban on payment for forwarding client orders for execution

RemovedInvestment firms acting on behalf of clients shall not receive any fee or commission or non-monetary benefits from any third party for forwarding client orders to any third party for their execution.

RemovedThe first subparagraph shall not apply to fees, commissions or non-monetary benefits related to the forwarding of professional clients’ orders for execution, where permitted under the approved and public tariff structure of a regulated market or MTF.’;