Changes from plenary report to adopted text

Removed(16) It is necessary to ensure that Commission Delegated Regulation (EU) No 149/2013 of 19 December 2012 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council relating to the criteria for establishing which OTC derivative contracts are objectively measurable as reducing risks continues to be appropriate in light of market developments. It is also necessary to ensure that the clearing thresholds laid down in that Commission Delegated Regulation relating to values of those thresholds properly and accurately reflect the different risks and characteristics in derivatives, other than interest rate, foreign exchange, credit and equity derivatives. ESMA should therefore also review and clarify, where appropriate, that Commission Delegated Regulation and propose amending it if necessary. ESMA is encouraged to consider and provide, inter alia, more granularity for commodity derivatives. That granularity could be achieved by separating the clearing thresholds by sector and type, such as differentiating between agriculture, energy or metal related commodities or differentiating those commodities based on other features such as environmental, social and governance criteria, environmentally sustainable investments or crypto-related features. During the review, ESMA should endeavour to consult relevant stakeholders that have specific knowledge on particular commodities.

Removed(17) Non-financial counterparties that have to exchange collateral for OTC derivative contracts not cleared by a CCP should have sufficient time to negotiate and test the arrangements to exchange such collateral.

Removed(18) To ensure a uniform application of the risk-management procedures requiring the timely, accurate and appropriately segregated exchange of collateral with respect to OTC derivative contracts entered into by financial counterparties and non-financial counterparties, the European Supervisory Authorities (ESAs) should take the necessary actions to ensure such uniform application.

Removed(18a) A number of public entities, such as central government, local authorities and other public sector entities, clear on a voluntary basis. When using clearing services, public entities should, in principle, use Union CCPs clearing services. In its letter of 1st April 2022, ESMA stressed that the modalities of public entities participation in CCPs vary across Member States. In particular, ESMA identified diverging practices regarding the calculation of the exposures of public entities to Union CCPs and their contributions to the financial resources of the CCP. Therefore, ESMA should be invited to work on further harmonisation and coordination regarding public entities’ clearing activities.

Removed(18b) In order to avoid market fragmentation and ensure a level playing field, while acknowledging the fact that in some jurisdictions the exchange of variation and initial margin for single-stock options and equity index options is not subject to equivalent margin requirements, the treatment of those products should be phased in. That phase-in period would give ESMA time to monitor regulatory developments in other jurisdictions and for the Commission to ensure that appropriate requirements are in place in the Union to mitigate counterparty credit risk in respect of such contracts whilst avoiding any scope for regulatory arbitrage.

Removed(18c) In order to comply with the initial margin requirements set out in Regulation (EU) No 648/2012, many Union market participants use industry-wide initial margin models, such as the standard initial margin model (SIMM) developed by the International Swaps and Derivatives Association (ISDA). The design of those models is centrally decided and cannot be significantly affected by the preferences of every single user or by the different assessments of each competent authority validating the use of those models by entities it supervises. In practice, since the same model is used by a large number of Union counterparties, the resulting need for that model to be validated by a plurality of competent authorities gives rise to a coordination problem. To address that problem, EBA should be given the task of operating as the central validator of the general elements of such industry-wide models. In its role as central validator, EBA should develop a common view on the general aspects of those models, such as their calibration, design, and instruments and assets class coverage. To assist EBA in its work, EBA should collect feedback from competent authorities, ESMA and EIOPA, and coordinate their views. Given that competent authorities would continue to be responsible for validating the implementation of those models at the supervised entity level, EBA should assist them in their approval processes regarding the general aspects of the implementation of those models. In addition, EBA should serve as a single point of discussion with the industry to help ensure a more effective Union influence on the design of those models.

Removed(19) To ensure a consistent and convergent approach amongst competent authorities throughout the Union, authorised CCPs or legal persons that wish to be authorised under Article 14 of Regulation (EU) No 648/2012 to provide clearing services and activities in financial instruments should also be able to be authorised to provide clearing services and other activities in relation to non-financial instruments. Regulation (EU) No 648/2012 applies to CCPs as entities, and not to specific services, as set out in Article 1(2) of that Regulation. When a CCP clears non-financial instruments, in addition to financial instruments, ESMA should be able to ensure that the CCP complies with all requirements of Regulation (EU) No 648/2012 for all services it offers.

Removed(20) It is necessary to explore additional means of enhancing the attractiveness of Union CCPs and increasing the competitiveness of Union firms. To achieve a proportionate approach that bolsters Union capital markets, maintains financial stability and strengthens the competitiveness of the Union's clearing system on a global scale, it is necessary to implement an incentives regime to encourage international counterparties to clear in the Union. However, Union CCPs face challenges in expanding their product offer and experience difficulties in bringing new products to the market. Those challenges and difficulties can be explained by certain provisions of Regulation (EU) No 648/2012 that render some authorisation procedures too long, complex and uncertain in their outcome. The process of authorising Union CCPs or extending their authorisation should therefore be simplified, while ensuring the appropriate involvement of ESMA and the college referred to in Article 18 of Regulation (EU) No 648/2012. First, to avoid significant, and potentially indefinite, delays when ESMA assesses the completeness of an application for an authorisation, ESMA should swiftly acknowledge receipt of that application and quickly verify whether the CCP has provided the documents required for the assessment. To ensure that Union CCPs submit all required documents with their applications, ESMA should develop draft regulatory and implementing technical standards specifying which documents should be provided, what information those documents should contain and in which format they should be submitted. When preparing the draft regulatory technical standards, ESMA should take into account existing documentation requirements and practices under Regulation (EU) No 648/2012 and streamline their submission where possible, as well as the importance of avoiding an excessive time to market and of ensuring that the information to be provided by the CCP applying for an extension of authorisation is proportional to the materiality of the change for which the CCP is applying. Second, to ensure an efficient and concurrent assessment of applications, CCPs should be able to submit all documents via a central database where they should be shared instantaneously with the CCP’s competent authority, ESMA and the college. Third, a CCP’s competent authority, ESMA and the college should, during the assessment period, engage and ask the CCP any questions to ensure a swift, flexible, and cooperative process for a comprehensive review. To avoid duplication and unnecessary delays, all questions and subsequent clarifications should also be shared simultaneously between the CCP’s competent authority, ESMA and the college.

Removed(21) There is currently uncertainty as to when an additional service or activity is covered by a CCP’s existing authorisation. It is necessary to address that uncertainty and to ensure proportionality when the proposed additional service or activity does not increase the risks for the CCP. It is therefore necessary to lay down that applications in those cases should not undergo the full assessment procedure. For that reason, it should be specified which additional clearing services and activities are non-material, and thus do not increase the risks for a Union CCP, and should be approved through a non-objection procedure by ESMA. That non-objection procedure should be applied where the CCP intends to clear a new currency in a class of financial instruments already covered by the CCP’s authorisation for which the CCP does not have in place the relevant payment facility, or where it intends to offer a new settlement or delivery mechanism or service which involves establishing links with a different securities settlement system, central securities depository or payment system, or where it intends to offer contracts that cannot be liquidated in the same manner or together with contracts already cleared by it. In addition, a CCP should also be able to ask ESMA for the non-objection procedure to apply where that CCP considers that the proposed additional service or activity would not increase its risks, in particular where the new clearing service or activity is similar to the services the CCP is already authorised to provide. The non-objection procedure should not require a separate opinion from ESMA and the college since such requirement would be disproportionate. There are also a number of changes that a CCP adopts on a regular basis ('business as usual' changes) that might not qualify as material or non-material. For those changes, the CCPs should not be subject to the procedures to extend the authorisations, but should notify ESMA before implmenting them directly. ESMA should regularly check those changes as part of the CCP annual review. That measure should significantly alleviate the burden on competent authorities, and greatly increase the capacity of CCPs to implement changes that do not modify their overall risk profile. Nonetheless, ESMA should regularly review how the changes in the authorisation and assessment procedures are implemented in practice, to ensure that they do not increase the financial stability risk for the Union.

Removed(22) To foster a cooperative supervision of CCPs on an ongoing basis, the college should issue an opinion where ESMA considers withdrawing a CCP’s authorisation and when ESMA conducts the annual review and evaluation of that CCP.

Removed▌

Removed(24) The clearing landscape in the Union has undergone major changes since 2019, when amending regulations to Regulation (EU) No 1095/2010 and Regulation (EU) No 648/2012 were adopted, and a more coordinated and integrated approach to the supervision of Union CCPs now appears necessary, especially as more systemic activity is expected to shift towards the Union due to the requirement to hold active accounts at Union CCPs for services of substantial systemic importance. ESMA should therefore be the direct supervisor of Union CCPs, and enhanced cooperation and integration between all relevant authorities is necessary to ensure that risks concentrated in Union CCPs are adequately monitored and managed, in order to minimise systemic risk and spill-over effects across Member States. Empowering ESMA with a direct supervisory role vis-a-vis Union CCPs requires adapting the existing supervisory framework under Regulation (EU) No 648/2012 , providing ESMA with decision-making powers over Union CCPs, but also clarifying how those new powers would interact with the supervisory role of the national competent authorities. Under a new and more integrated approach, relevant supervisory decisions should be drafted and adopted by ESMA, having taken into account the opinion of the college. The competent authority of the CCP may be requested by ESMA to assist with drafting decisions, the verification of activities of the CCP, and the day-to-day assessments. ESMA should be empowered to delegate specific supervisory tasks to competent authorities. ESMA should be in charge of coordinating the joint supervisory activities, including in relation to on-site inspections of Union CCPs. The change in approach should also cover the annual reviews.

Removed(25) It is necessary to ensure that the CCP complies with Regulation (EU) No 648/2012 on an ongoing basis, including after a non-objection procedure approving the provision of additional clearing services or activities, or after a non-objection procedure for the validation of a model change in which cases ESMA and the college do not issue a separate opinion. The review conducted by ESMA at least on an annual basis should therefore in particular consider such new clearing services or activities and any model changes. To ensure supervisory convergence and that Union CCPs are safe, robust and competitive in providing their services throughout the Union, the report of ESMA should be subject to an opinion by▌ the college and should be submitted every year.

Removed(26) ESMA should have the means to identify potential risks to the Union’s financial stability. ESMA should therefore, in cooperation with the ESRB, EBA, EIOPA, and the ECB in the framework of the tasks concerning the prudential supervision of credit institutions within the single supervisory mechanism conferred upon it in accordance with Council Regulation (EU) No 1024/2013, identify the interconnections and interdependencies between different CCPs and legal persons, including, as far as possible, shared clearing members, clients and indirect clients, shared material service providers, shared material liquidity providers, cross-collateral arrangements, cross-default provisions and cross-CCP netting, cross-guarantee agreements and risks transfers and back-to-back trading arrangements.

Removed(27) The central banks of issue of the Union currencies of the financial instruments cleared by authorised CCPs that have requested membership of the CCP Supervisory Committee are non-voting members of that committee. They only participate to its meetings for Union CCPs in the context of discussions about the Union-wide assessments of the resilience of those CCPs to adverse market developments and relevant market developments. Contrary to their involvement in the supervision of third-country CCPs, central banks of issue are thus insufficiently involved on supervisory matters for Union CCPs that are of direct relevance to the conduct of monetary policy and the smooth operation of payments systems, which leads to insufficient consideration of cross-border risks. It is therefore appropriate that those central banks of issue are able to attend as non-voting members all meetings of the CCP Supervisory Committee when it convenes for Union CCPs.

Removed(28) It is necessary to ensure a prompt exchange of information, knowledge sharing and effective cooperation between the authorities involved in the supervision of authorised CCPs, and in the monitoring of risks to the financial stability of the Union, and in particular where a swift decision by ESMA is required. It is therefore appropriate to create a framework for joint supervisory activities for each Union CCP to assist those supervisory authorities, including by providing input to ESMA within the context of the non-objection procedure for extending a CCP’s existing authorisation, assisting in establishing the frequency and depth of a CCP’s review and evaluation, and participating to on-site inspections. ▌

Removed(29) To enhance the ability of relevant Union bodies to have a comprehensive overview of market developments relevant for clearing in the Union, monitor the implementation of certain clearing related requirements of Regulation (EU) No 648/2012 and collectively discuss the potential risks arising from the interconnectedness of different financial actors and other issues related to the financial stability it is necessary to establish a cross-sectoral monitoring mechanism bringing together the relevant Union bodies involved in the supervision of Union CCPs, clearing members and clients. Such Joint Monitoring Mechanism should be managed and chaired by ESMA as the Union authority▌ supervising Union CCPs and supervising systemically important third-country CCPs. Other participants should include representatives from the Commission, the EBA, EIOPA, the ESRB, the ECB and the ECB in the framework of the tasks concerning the prudential supervision of credit institutions within the single supervisory mechanism conferred upon it in accordance with Council Regulation (EU) No 1024/2013.

Removed(30) To inform future policy decisions, ESMA, in cooperation with the other bodies participating in the Joint Monitoring Mechanism, should submit an annual report to the European Parliament, the Council and the Commission on the results of their activities.▌

Removed(31) The 2020 market turmoil as a result of the Covid-19 pandemic and the 2022 high prices on energy wholesale markets following Russia’s unprovoked and unjustified aggression against Ukraine showed that, while it is essential for competent authorities to cooperate and exchange information to address ensuing risks when events with cross-border impacts emerge, ESMA still lacks the necessary tools to ensure such coordination and a convergent approach at Union level. ESMA should therefore be able to convene meetings of the CCP Supervisory Committee, either on its own initiative or upon request, potentially with an enlarged composition, to coordinate effectively competent authorities’ responses in emergency situations. ESMA should also be able to ask, by simple request, information from market participants which is necessary for ESMA to perform its coordination function in those situations and to be able to issue recommendations to the competent authority. Finally, given that developments in financial markets could have direct implications for the banking system or for monetary policy decisions, representatives of relevant central banks of issue should always be invited to participate in the coordination meetings of the CCP Supervisory Committee in response to such emergency situations.

Removed(32) To reduce the burden on CCPs and ESMA, it should be clarified that where ESMA undertakes a review of a third-country CCP’s recognition pursuant to Article 25(5), first subparagraph, point (b), that third-country CCP should not be obliged to submit a new application for recognition. It should, however, provide ESMA with all information necessary for such review. Consequently, ESMA's review of a third-country CCP’s recognition should not constitute a new recognition of that CCP.

Removed(33) The Commission should be able, when adopting an equivalence decision, to waive the requirement for that third country to have an effective equivalent system for the recognition of third-country CCPs. In considering where such an approach would be proportionate, the Commission might consider a range of different factors, including compliance with the Principles for Financial Market Infrastructures published by the Committee on Payments and Market Infrastructures and the International Organisation of Securities Commissions, the size of the third-country CCPs established in that jurisdiction and, where known, the expected activity in these third-country CCPs by clearing members and trading venues established in the Union.

Removed(34) To ensure that cooperation arrangements between ESMA and the relevant competent authorities of third countries are proportionate, such arrangements should reflect the specific features of the scope of services provided, or intended to be provided, within the Union by CCPs authorised in that third-country and whether those services entail specific risks to the Union or to one or more of its Member States. The cooperation arrangements should therefore reflect the degree of risk that the CCPs established in a third country potentially present to the financial stability of the Union or of one or more of its Member States.

Removed(35) ESMA should therefore tailor its cooperation arrangements to different third-country jurisdictions based on the CCPs established in the respective jurisdiction. In particular, Tier 1 CCPs cover a wide range of CCP profiles hence ESMA should ensure that a cooperation arrangement is proportionate to the CCPs established in each third-country jurisdiction. ESMA should consider, amongst others, the liquidity of the markets concerned, the degree to which the CCPs’ clearing activities are denominated in euro or other Union currencies and the extent to which Union entities use the services of such CCPs. Considering that the vast majority of Tier 1 CCPs provide clearing services to a limited extent to clearing members and trading venues established in the Union, ESMA’s scope of assessment and information to be requested should also be limited in all those jurisdictions. To limit information requests for Tier 1 CCPs, a pre-defined range of information should in principle be requested by ESMA annually. Where the risks from a Tier 1 CCP or jurisdiction are potentially greater, more, and at least quarterly, requests and a wider scope of information requested would be justified. However, any cooperation arrangements in place when this Regulation enters into force should not be required to be adjusted unless the relevant third-country authorities so request.

Removed(36) Where recognition is provided under Article 25(2b) of Regulation (EU) No 648/2012, considering that those CCPs are of systemic importance for the Union or one or more of its Member States, the cooperation arrangements between ESMA and the relevant third-country authorities should cover the exchange of information for a broader range of information and with increased frequency. In that case, the cooperation arrangements should also entail procedures to ensure such a Tier 2 CCP is supervised pursuant to Article 25 of that Regulation. ESMA should ensure it can obtain all information necessary to fulfil its duties under that Regulation, including information necessary to ensure compliance with Article 25(2b) of that Regulation and to ensure that information is shared where a CCP has been granted, partially or fully, comparable compliance. ESMA should also, where comparable compliance is granted, regularly assess the continued compliance by Tier 2 CCPs with the conditions for their recognition through comparable compliance, by monitoring CCPs’ compliance with the requirements set out in Article 16 and Titles IV and V under the Commission dDelegated Regulation (EU) 2020/1304. In undertaking that assessment ESMA, should also be able, in addition to receiving the relevant information and confirmations from the Tier 2 CCP, to cooperate and agree on administrative procedures with the third country authority to ensure ESMA has the relevant information and to reduce the administrative and regulatory burdens for those Tier 2 CCPs. To enable ESMA to carry out full and effective supervision of Tier 2 CCPs, it should be clarified that those CCPs should provide ESMA with information periodically.

Removed(37) To ensure that ESMA is also informed about how a Tier 2 CCP is prepared for, can mitigate and recover from financial distress, the cooperation arrangements should include the right for ESMA to be informed where a Tier 2 CCP establishes a recovery plan or where a third-country authority establishes resolution plans. ESMA should also be informed on the aspects relevant for the financial stability of the Union, or of one or more of its Member States, and on how individual clearing members, and to the extent known clients and indirect clients, could be materially affected by the implementation of such a recovery or resolution plan. The cooperation arrangements should also indicate that ESMA should be informed when a Tier 2 CCP intends to activate its recovery plan or where the third-country authorities have determined that there are indications of an emerging crisis situation that could affect the operations of the CCP, its clearing members, clients and indirect clients.

Removed(38) To mitigate potential risks for the financial stability of the Union, or of one or more of its Member States, CCPs and clearing houses should not be allowed to be clearing members of other CCPs nor should CCPs be able to accept to have other CCPs as clearing members or indirect clearing members. That exclusion should not affect interoperability arrangements, or other arrangements such as sponsored-memberships or direct access to cleared repo markets, between CCPs.

Removed(39) The recent events on commodity markets as a result of Russia’s unprovoked and unjustified aggression against Ukraine illustrate the fact that non-financial counterparties do not have the same access to liquidity as financial counterparties. Therefore, non-financial counterparties should not be allowed to offer client clearing services and should be only allowed to keep accounts at the CCP for assets and positions held for their own account. Where a CCP has or intends to accept non-financial counterparties as clearing members that CCP should ensure that the non-financial counterparties can fulfil the margin requirements and default funds contributions, including in stressed conditions. Considering non-financial counterparties are not subject to the same prudential requirements and liquidity safeguards as financial counterparties, their direct access to CCPs should be monitored by the competent authorities of CCPs accepting them as clearing members. . The competent authority for the CCP should report to ESMA and the college on a regular basis on the appropriateness of accepting non-financial counterparties as clearing members. ESMA might issue an opinion on the appropriateness of such arrangements following an ad-hoc peer review.

Removed(40) To ensure clients and indirect clients have better visibility and predictability of margin calls, and thus further develop their liquidity management strategies, clearing members and clients providing clearing services should ensure transparency towards their clients. Due to their closer relationship with CCPs and their professional experience with central clearing and liquidity management, clearing members are best placed to communicate in a clear and transparent manner to clients how CCP models work, including in stress events, and the implications such events can have on the margins clients are requested to post, including any additional margin clearing members themselves may ask. A better understanding of CCP margin models can improve clients’ ability to reasonably predict margin calls and prepare themselves for collateral requests, particularly in stress events. In order to ensure that clearing members are able to provide effectively the required levels of transparency on margin calls and CCP margin models to their clients, CCPs should also provide them with the information needed. ESMA, in consultation with EBA and the ESCB, should further specify the scope and format of the exchange of information between CCPs and clearing members and between clearing members and their clients.

Removed(41) To ensure that margin models reflect current market conditions, CCPs should continuously and not only regularly revise the level of their margins taking into account any potentially procyclical effects of such revisions. When calling and collecting margins on an intraday basis, CCPs should further consider the potential impact of their intraday margin collections and payments on the liquidity position of their participants.

Removed(42) To ensure the liquidity risk is accurately defined, the entities whose default a CCP should take into account to determine such risk should be expanded to cover not only the default of clearing members but also of liquidity service providers, settlement service providers or any other service providers.

Removed(43) To facilitate access to clearing to those entities that do not hold sufficient amounts of highly liquid assets and in particular energy companies, under conditions to be specified by ESMA and to ensure a CCP takes those conditions into account when calculating its overall exposure to a bank that is also a clearing member, commercial bank and public bank guarantees should be considered eligible collateral, even on an uncollateralised basis for non-financial counterparties, subject to concentration limits and specific requirements to be set by ESMA. In addition, given their low credit risk profile, it should be explicitly specified that public guarantees are also eligible as collateral. Finally, a CCP should, when revising the level of the haircuts it applies to the assets it accepts as collateral, take into account any potential procyclical effects of such revisions.

Removed(44) To facilitate CCPs’ ability to respond promptly to market developments that may require amendments to their risk models, the process of the validation of changes to such models should be simplified. Where a change is non-significant, a non-objection validation procedure should apply. To ensure supervisory convergence, Regulation (EU) No 648/2012 should specify the changes that should be considered as significant. This should be the case where certain conditions would be met referring to different aspects of the CCP’s financial position and overall risk level.

Removed(44a) The Report on the Functioning of Regulation (EU) No 575/2013 with the related obligations under Regulation (EU) No 648/2012 jointly issued by EBA and ESMA in January 2017 identifies multiple potentially duplicative and inconsistent requirements for CCPs holding a banking license. Consequently, the report recommends a number of clarifications to avoid increased regulatory risk, unnecessary burdens and costs for monitoring by the competent authorities. The duplication of capital requirements identified in that report has not yet been fully addressed. Therefore, as recommended in the report, it should be clarified that CCPs authorised in accordance with Article 14 of Regulation (EU) 648/2012, are not required to set aside own funds for their activities where the incumbent risks are already covered through the CCP-specific financial resources referred to in Articles 41 to 44 of that Regulation. Whilst the Eurosystem is looking into the issue of convergent central bank access policies for Union CCPs, the central banks of issue of the Eurosystem under the lead of the ECB should, at the request of the European Parliament, provide a report assessing the state of play and, if appropriate, provide recommendations how to ensure generalised central bank access for EMIR-authorised Union CCPs without the condition of maintaining a banking licence.

Removed(45) Regulation (EU) No 648/2012 should be reviewed no later than 5 years after the date of entry into force of this Regulation. This should allow time to apply the changes introduced by this Regulation. Whilst a review of Regulation (EU) No 648/2012 in its entirety should be carried out, that review should focus on the effectiveness and efficiency of that Regulation in meeting its aims, improving the efficiency and safety of Union clearing markets and preserving financial stability of the Union. The review should also consider the attractiveness of Union CCPs, the impact of this Regulation on encouraging clearing in the Union, and the extent to which the enhanced assessment and management of cross-border risks have benefited the Union.

Removed(46) To ensure consistency of Regulation (EU) 2017/1131 of the European Parliament and of the Council with Regulation (EU) No 648/2012 and to preserve the integrity and stability of the internal market, it is necessary to lay down in Regulation (EU) 2017/1131 a uniform set of rules to address counterparty risk in financial derivative transactions performed by money market funds (MMF), when the transactions have been cleared by a CCP that is authorised or recognised under Regulation (EU) No 648/2012. As central clearing arrangements mitigate counterparty risk that is inherent in financial derivative contracts, it is necessary to take into consideration whether a derivative has been centrally cleared by a CCP that is authorised or recognised under that Regulation, when determining the applicable counterparty risk limits. It is also necessary for regulatory and harmonisation purposes, to lift counterparty risk limits only where the counterparties use CCPs which are authorised or recognised in accordance with that Regulation, to provide clearing services to clearing members and their clients.

Removed(47) To ensure consistent harmonisation of rules and supervisory practice on applications for authorisation, extension of authorisation and model validations the active account requirement and the CCP participation requirements, the Commission should be empowered to adopt regulatory technical standards developed by ESMA with regard to the following: the documents CCPs are required to submit when applying for authorisation, extension of authorisation and validation of model changes;▌ the calculation methodology to be used to calculate that proportion; the scope and details of the reporting by Union 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; and the elements to be considered when laying down the admission criteria to a CCP. The Commission should adopt those regulatory technical standards by means of delegated acts pursuant to Article 290 of the Treaty on the Functioning of the European Union (TFEU) and in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Removed(48) To ensure uniform conditions for the implementation of this Regulation, the Commission should also be empowered to adopt implementing technical standards developed by ESMA with regard to the format of the required documents for applications and the format of the reporting by Union clearing members and clients to their competent authorities on their clearing activity in third-country CCPs. The Commission should adopt those implementing technical standards by means of implementing acts pursuant to Article 291 TFEU and in accordance with Article 15 of Regulation (EU) No 1095/2010.

Removed(49) To ensure the list of third countries whose entities may not benefit from those exemptions despite not being identified in those lists is relevant for the objectives of Regulation (EU) No 648/2012, to ensure the consistent harmonisation of the obligation to clear certain transactions in an account with an authorised CCP where ESMA undertakes an assessment pursuant to Article 25(2c) and to ensure the list of non-material changes for the non-objection procedure to apply remains relevant, the power to adopt acts in accordance with Article 290 of the TFEU should be delegated to the Commission to adjust the transactions in scope of the obligation and to change the list of non-material changes. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts

Removed(50) Since the objectives of this Regulation, namely to increase the safety and efficiency of Union CCPs by improving their attractiveness, encouraging clearing in the Union and enhancing the cross-border consideration of risks cannot be sufficiently achieved by the Member States but can rather, by reason of their scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

Removed(51) Regulations (EU) No 648/2012, (EU) No 575/2013 and (EU) 2017/1131 should therefore be amended accordingly.

RemovedHAVE ADOPTED THIS REGULATION:

RemovedAmendments to Regulation (EU) No 648/2012

RemovedRegulation (EU) No 648/2012 is amended as follows:

Removed(-1) in Article 1, paragraph 5, the following subparagraph is added:

Removed‘Notwithstanding point (b) of the first subparagraph of this paragraph, by ... [18 months from the date of entry into force of this amending Regulation], ESMA shall issue guidelines in accordance with Article 16 of Regulation (EU) No 1095/2010 to further specify the modalities of public sector entities’ participation in Union CCPs, in particular regarding the calculation of the exposures of public sector entities to Union CCPs and public sector entities’ contributions to Union CCPs’ financial resources, duly taking account of the role and mandate of public entities and the objective of encouraging central clearing by them.”;

Removed(-1a) Article 2 is amended as follows:

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

Removed‘(1) “CCP” means a legal person that interposes itself between the counterparties to the contracts traded on one or more financial markets or commodity (spot) markets, including wholesale energy markets, as well as on one or more markets in crypto-assets, as defined in Article 3(5) of Regulation (EU) 2023/1114 of the European Parliament of Council, becoming the buyer to every seller and the seller to every buyer;’;

Removed(b) the following subparagraph is added:

Removed‘The Commission shall be empowered to adopt delegated acts in accordance with Article 82 to specify certain technical elements of the definitions laid down in the first paragraph of this Article, to adjust them to market and technological developments.’;

Removed(1) Article 3 is replaced by the following:

Removed‘Article 3

RemovedIntragroup transactions

Removed1. In relation to a non-financial counterparty, an intragroup transaction shall be an OTC derivative contract entered into with another counterparty which is part of the same group provided that both counterparties are included in the same consolidation on a full basis and they are subject to an appropriate centralised risk evaluation, measurement and control procedures and that counterparty is established in the Union or, if it is established in a third country that third country is not listed pursuant to paragraphs 4 and 5.

Removed2. In relation to a financial counterparty, an intragroup transaction shall be any of the following:

Removed(a) an OTC derivative contract entered into with another counterparty which is part of the same group, provided that all of the following conditions are met:

Removed(a) the financial counterparty is established in the Union or, if it is established in a third country, that third country is not listed pursuant to paragraphs 4 and 5;

Removed(b) the other counterparty is a financial counterparty, a financial holding company, a financial institution or an ancillary services undertaking subject to appropriate prudential requirements;

Removed(c) both counterparties are included in the same consolidation on a full basis;

Removed(d) both counterparties are subject to appropriate centralised risk evaluation, measurement and control procedures;