Changes from plenary report to adopted text

Removedbodies referred to in Articles 70 and 71 of the Financial Regulation;

Removedpublic law bodies;

Removedbodies governed by private law with a public service mission to the extent that they are provided with adequate financial guarantees;

Removedbodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that are provided with adequate financial guarantees;

Removedpersons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU, and identified in the relevant basic act.

RemovedIf more than one management mode is indicated, please provide details in the ‘Comments’ section.

RemovedComments

RemovedN/A

Removed2. MANAGEMENT MEASURES

Removed2.1. Monitoring and reporting rules

RemovedSpecify frequency and conditions.

RemovedIn line with already existing arrangements ESMA prepares regular reports on its activity (including internal reporting to Senior Management, Management Board reporting, six month activity reporting to the Board of Supervisors and the production of the annual report), and undergoes audits by the Court of Auditors and the Internal Audit Service on its use of resources. In addition the proposal provides some further monitoring and reporting obligations on ESMA in relation to the new features of the Regulation, including the active account. The Commission shall provide a report 5 years after the Regulation enter into force.

Removed2.2. Management and control system(s)

Removed2.2.1. Justification of the management mode(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed

RemovedIn relation to the legal, economic, efficient and effective use of appropriations resulting from the proposal, it is expected that the proposal would not bring about new risks that would not be currently covered by an existing internal control framework.

Removed2.2.2. Information concerning the risks identified and the internal control system(s) set up to mitigate them

RemovedManagement and control systems as provided for in the ESMA Regulation are already implemented. ESMA works closely together with the Internal Audit Service of the Commission to ensure that the appropriate standards are met in all internal controls areas. These arrangements will apply also with regard to the role of ESMA according to the present proposal. Annual internal audit reports are sent to the Commission, Parliament and Council.

Removed2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of "control costs ÷ value of the related funds managed"), and assessment of the expected levels of risk of error (at payment & at closure)

RemovedN/A

Removed2.3. Measures to prevent fraud and irregularities

RemovedSpecify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy.

RemovedFor the purposes of combating fraud, corruption and any other illegal activity, the provisions of Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 apply to ESMA without any restrictions.

RemovedESMA has acceded to the Interinstitutional Agreement of 25 May 1999 between the European Parliament, the Council of the European Union and the Commission of the European Communities concerning internal investigations by the European Anti-Fraud Office (OLAF) and adopt appropriate provisions for all ESMA staff.

RemovedThe funding decisions and the agreements and the implementing instruments resulting from them explicitly stipulate that the Court of Auditors and OLAF may, if need be, carry out on the spot checks on the beneficiaries of monies disbursed by ESMA as well as on the staff responsible for allocating these monies.

Removed3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

Removed3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s) affected

RemovedExisting budget lines

RemovedIn order of multiannual financial framework headings and budget lines.

RemovedNew budget lines requested

RemovedIn order of multiannual financial framework headings and budget lines.

Removed3.2. Estimated financial impact of the proposal on appropriations

RemovedThis legislative initiative will have no impact on expenditures for the European Securities and Markets Authority (ESMA) or other bodies of the European Union.

RemovedESMA: The impact assessment identified only moderate additional costs for ESMA, while at the same time the proposed measures create efficiencies that will lead to cost reductions. In addition, some provisions clarify and recalibrate the role of ESMA whilst not constituting new tasks and are therefore to be considered budget neutral.

RemovedCosts identified relate to the setting up and operation of a new IT tool for the submission of supervisory documents. However, even though ESMA might incur higher costs related to developing or choosing such a new IT tool as well as operating it, this IT tool will also create efficiencies and ESMA will benefit from those. These efficiencies relate to considerably less manual work in the reconciliation and sharing of documents, the following up on deadlines and questions as well as coordination with national competent authorities (NCAs), the college and the CCP Supervisory Committee. These benefits are likely to outweigh the costs incurred.

RemovedFurthermore, initial additional (paper-)work related to the modification of tools and procedures, as well as to enhanced cooperation, may increase costs initially, but is likely to be reduced, or remain stable, over time. Notably, ESMA will be required to draft regulatory / implementing technical standards (RTS/ITS) on the format and content of the documents CCPs are required to submit to supervisory authorities, the specification of the requirement for clearing members and clients to have an active account at a Union CCP, the calculation methodology to be used to calculate the proportion, the scope and details of the reporting by EU clearing members and clients to their competent authorities on their clearing activity in third-country CCPs and whilst providing the mechanisms triggering a review of the values of the clearing thresholds following significant price fluctuations in the underlying class of OTC derivatives to also review the scope of the hedging exemption and thresholds for the clearing obligation to apply as well as an annual report on the results of their monitoring activity. In undertaking those activities, ESMA can build on already existing internal processes and procedures, and it may convert, where relevant, those procedures into RTSs/ITSs. In defining the active account requirement, for some already identified instruments, and their ongoing monitoring, ESMA can take into account the work it has undertaken under Article 25(2c) of EMIR when assessing which Tier 2 CCPs’ clearing services are of substantial systemic importance to the Union or one or more of its Member States and might therefore only require some very limited additional resources.

RemovedAnother category to be considered in the cost analysis is the modification of procedures and tools to the new supervisory cooperation framework. The cooperation in joint supervisory teams and the establishment of a joint monitoring mechanism at EU level are new elements in the supervisory framework. However, they are mainly tools to improve the cooperation between authorities and cover tasks that are already, in all essential parts, performed by the authorities, except for the monitoring of the implementation of the requirements set out for active accounts at EU CCPs, such as fees for access charged by CCPs to clients for active accounts. These new structures will likely require some reorganisation of staff and potentially create the need for additional meetings but will not have substantial budgetary implications. Moreover, the recalibrated supervisory process also comes with benefits, notably clearer responsibilities avoiding unnecessary duplicative work and less work due to the introduction of non-objection procedures which enable ESMA and NCAs to focus on the material aspects of supervision in relation to the extension of clearing services and changes to CCPs’ risk models.

RemovedThe proposed approach towards third-country CCPs that refuse to pay fees to ESMA consists in issuing a public notice after 6 months due and initiate the withdrawal of recognition after 1 year due. This change will be positive in terms of costs. This avoids ESMA from having to invest a considerable amount of work without getting remunerated for it.

RemovedIn addition, further provisions are introduced which clarify and recalibrate the role of ESMA and are therefore to be considered budget neutral. For instance, ESMA already has the obligation to issue opinions in relation to certain aspects of supervision, however the content of those opinions is recalibrated to ensure a higher degree of efficiency in the supervisory process and ESMA is given a formal opportunity to issue an opinion on CCPs’ annual review and evaluation as well as on the withdrawal of their authorisation and to take a clear role in coordinating emergency situations. These are tasks that, in all material respects, relate to their already existing ongoing work and the provisions clarify and therefore strengthen ESMA’s position, providing clear responsibilities.

RemovedOther European Union bodies: Even though smaller changes to the role of other European Union bodies, such as the European Commission or the European Central Bank, are introduced, they will not have budgetary implications.

Removed3.2.1. Summary of estimated impact on operational appropriations

RemovedThe proposal/initiative does not require the use of operational appropriations

RemovedThe proposal/initiative requires the use of operational appropriations, as explained below:

RemovedEUR million (to three decimal places)

RemovedIf more than one operational heading is affected by the proposal / initiative, repeat the section above:

RemovedThis section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative Financial Statement (Annex V to the internal rules), which is uploaded to DECIDE for interservice consultation purposes.

RemovedEUR million (to three decimal places)

RemovedEUR million (to three decimal places)

Removed3.2.2. Estimated output funded with operational appropriations

RemovedCommitment appropriations in EUR million (to three decimal places)

Removed3.2.3. Summary of estimated impact on administrative appropriations

RemovedThe proposal/initiative does not require the use of appropriations of an administrative nature

RemovedThe proposal/initiative requires the use of appropriations of an administrative nature, as explained below:

RemovedEUR million (to three decimal places)

RemovedThe appropriations required for human resources and other expenditure of an administrative nature will be met by appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.

Removed3.2.3.1. Estimated requirements of human resources

RemovedThe proposal/initiative does not require the use of human resources.

RemovedThe proposal/initiative requires the use of human resources, as explained below:

RemovedEstimate to be expressed in full time equivalent units

RemovedXX is the policy area or budget title concerned.

RemovedThe human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.