Changes from plenary report to adopted text

Removed‘Article 7a

RemovedActive Account

Removed1. Financial counterparties or a non-financial counterparties that are subject to the clearing obligation in accordance with Articles 4a and 10 and clear any of the categories of the derivative contracts referred to in paragraph 2 shall clear at least a proportion of such contracts at accounts at CCPs authorised under Article 14.

Removed1a. For the purposes of paragraph 1 of this Article, an account at a CCP authorised under Article 14 shall be deemed active where:

Removed(a) initial and daily variation margins are posted against existing positions; (b) the necessary IT connectivity, internal processes and legal documentation are in place; and

Removed(c) the CCP demonstrates to ESMA through regular stress tests that in the event of a significant and sudden increase of clearing activity, the regular functioning of that account and the internal functioning of the CCP would not be affected.

RemovedFinancial or non-financial counterparties subject to the requirement laid down in paragraph 1 shall ensure that their active accounts are fully operational by ... [6 months from the date of entry into force of this amending Regulation].

RemovedESMA shall develop draft regulatory technical standards to further specify how the conditions listed in the first subparagraph of this paragraph are to be applied in order for that account to be considered active.

RemovedESMA shall submit those draft regulatory technical standards to the Commission by … [12 months from the date of entry into force of this amending Regulation].

RemovedPower is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the third subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Removed1b. By ... [24 months after the date of entry into force of this amending Regulation] the Commission shall adopt a delegated act in accordance with Article 82 supplementing this Regulation by introducing a requirement for financial counterparties or non-financial counterparties as referred to in paragraph 1 of this Article to clear a proportion of contracts in any of the categories of the derivative contracts referred to in paragraph 2 at a CCP authorised under Article 14. If necessary, the delegated act shall also specify the relevant reporting obligations related to the introduction of that requirement.

RemovedThe Commission shall only adopt the delegated act referred to in the first subparagraph of this paragraph if it has received the notification from ESMA as referred to in Article 22a, and where it considers that the introduction of a requirement to have a specific proportion of contracts cleared at a CCP authorised under Article 14 meets all of the following criteria:

Removed(a) the requirement would not result in a distortion of competition in the Union;

Removed(b) the requirement would contribute to the financial stability of the Union; and

Removed(c) the international competitiveness of the financial and non-financial counterparties subject to this Regulation would not be adversely affected by the introduction of the requirement.

RemovedFor the purposes of assessing point (c) of the second subparagraph of this paragraph, the Commission shall assess whether the requirement would result in a reduction of market share of clearing members established in the Union and counterparties and, for those counterparties which are subject to the best execution obligation under Article 27 of Directive 2014/65/EU, whether the requirement would lead to an increase in the prices that would be offered to end investors as a result of differences in liquidity and prices between CCPs authorised under Article 14 and under Article 25 would be significantly affected. In particular, the Commission shall carry out a cost-benefit analysis, including a measurement of the differences in prices of the instruments cleared at one CCP versus another, as well as their volatility.

RemovedThe Commission may also request ESMA to provide a report on the proportion of contracts to be cleared at a CCP authorised under Article 14 that would meet the criteria set out in the second subparagraph of this paragraph and on whether different proportions should be set for different sub-types of derivative contracts, for different types of counterparty, and for different types of activity.

Removed1c. By 24 months after the adoption of the delegated act as referred to in paragraph 1b of this Article the Commission shall conduct an assessment of whether the proportion of contracts to be cleared at a CCP authorised under Article 14, specified in that delegated act, still meets the criteria listed in paragraph 1b of this Article, and whether it needs to be adjusted. In such a case, the Commission is empowered to adopt a delegated act amending the delegated act referred to in paragraph 3 of this Article.

Removed2. In determining its obligations with regard to paragraphs 1 and 1b, a financial or a non-financial counterparty belonging to a group subject to consolidated supervision in the Union shall consider all derivative contracts referred to in paragraph 3 that are cleared by that counterparty or by other entities within the group to which that counterparty belongs.

Removed3. The obligation laid down in paragraphs 1 and 1b shall apply to the following:

Removed(a) OTC interest rate derivatives denominated in euro and Polish zloty;

Removed(b) short-term interest rate derivatives (STIR) denominated in euro;

Removed(c) other categories of derivative contracts pertaining to clearing services identified by ESMA as being of substantial systemic importance in accordance with Article 25(2c).

RemovedWhere ESMA undertakes an assessment pursuant to Article 25(2c), as referred to in point (c) of the first subparagraph of this paragraph, and concludes that certain services or activities provided by Tier 2 CCPs that were previously identified by ESMA as being of substantial systemic importance for the Union or one or more of its Member States no longer are of such importance, the Commission is empowered to adopt a delegated act to amend paragraph 3 of this Article accordingly, in accordance with Article 82.

RemovedThe obligation referred to in paragraphs 1 and 1b shall remain for as long as the derivative contracts referred to in the first subparagraph of this paragraph are being cleared.

Removed4. ESMA shall monitor and calculate on an entity, group and aggregate average basis the level of activity in the derivative contracts referred to in paragraph 2 of this Article and shall transmit that information to the Joint Monitoring Mechanism referred to in Article 23c.

RemovedWhere a financial or non-financial counterparty is found to be in breach of its obligations under this Article, ESMA shall, by decision, impose periodic penalty payments in order to compel that counterparty to put an end to its infringement.

RemovedThe periodic penalty payment referred to in the second subparagraph shall be effective and proportionate, not exceeding a maximum 3 % of the average daily turnover in the preceding business year. It shall be imposed for each day of delay, and calculated from the date stipulated in the decision imposing the periodic penalty payment.

RemovedThe periodic penalty payment referred to in the second subparagraph shall be imposed for a maximum period of six months following the notification of ESMA's decision. Following the end of that period, ESMA shall review the measure and extend it if necessary.

Removed5. ESMA shall monitor the implementation of the obligation set out in paragraph 1 and 1b and report on it on an annual basis to the European Parliament, the Council and the Commission.

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RemovedInformation on clearing services

Removed1. Clearing members and clients that provide clearing services both at a CCP authorised under Article 14 and at a CCP recognised under Article 25 shall, when one of their clients submits a contract for clearing, inform that client about the possibility to clear such contract at the CCP authorised under Article 14.

RemovedThe clearing members and clients that provide clearing services shall also disclose, in a clear and understandable manner, the costs associated with clearing services of the different CCPs at which it is possible to clear the contract.

Removed1a. ESMA shall, in consultation with EBA, develop draft regulatory technical standards specifying the type of information to be provided by clearing members and clients providing clearing services on costs to their clients.

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Removed(4a) the following article is inserted:

Removed‘Article 7c

RemovedInformation on CCPs established in the Union

Removed1. CCPs authorised under Article 14 shall report on a monthly basis to ESMA at least the following information:

Removed(a) the values and volumes cleared per currency and per asset class, including the value of positions held by clearing participants;

Removed(b) the CCP’s investments, capital, including dedicated own resources used in the waterfall or referred to in Article 45(4) of this Regulation and in Article 9(14) of Regulation (EU) 2021/23;

Removed(c) the clearing members’ margin requirements, default fund contributions, and contractually committed resources in the default management or in the recovery plans referred to in Article 9 of Regulation (EU) 2021/23;

Removed(d) the adequacy of the margin and default fund contributions and waterfall resources;

Removed(e) the CCP’s available liquid resources and the results of the liquidity stress-testing;

Removed(f) the details of the clearing members, clients holding individually segregated accounts, third parties providing major activities linked to the CCP’s risk management, material liquidity providers connected to the CCP, as well as interoperable and linked CCPs;

Removed(fa) any change that the CCP has directly implemented in accordance with Article 17ba.

RemovedESMA shall promptly provide the information referred to in the first subparagraph of this paragraph to the college of the CCP referred to in Article 18.

Removed2. ESMA shall, in close cooperation with EBA and the ESCB, develop draft regulatory technical standards further specifying the details and content of the information to be provided under paragraph 1.

RemovedESMA shall submit those draft regulatory technical standards to the Commission by … [12 months from the date of entry into force of this amending Regulation].

RemovedPower is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Removed3. To ensure uniform conditions of application of paragraph 1, ESMA shall develop draft implementing technical standards specifying the data standards and formats for the information to be reported.

RemovedESMA shall submit those draft implementing technical standards to the Commission by … [12 months from the date of entry into force of this amending Regulation].

RemovedPower is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph of this paragraph in accordance with Article 15 of Regulation (EU) No 1095/2010.’;

Removed(5) Article 9 is amended as follows:

Removed(-a) paragraph 1 is amended as follows:

Removedi. the first subparagraph is replaced by the following:

Removed‘Counterparties, including those established outside the Union and belonging to a group subject to consolidated supervision in the Union, and CCPs shall ensure that the details are reported of any derivative contract that they have concluded and of any modification or termination of the contract, in accordance with paragraphs 1a to 1f of this Article, to a trade repository registered in accordance with Article 55 or recognised in accordance with Article 77. The details shall be reported no later than on the working day following the conclusion, modification or termination of the contract.’