Changes from report parliamentary committee draft to plenary report

AddedSmaller regulated markets and SME Growth Markets, independent and not part of any bigger exchange group, shall benefit from a more important remuneration in order to incentivize their contribution to the CTP.

AddedRevenue generated from pre-trade and post-trade consolidated data streams shall be redistributed exclusively to the contributors to a given data stream.

Added1a. ESMA shall develop draft regulatory technical standards to specify the features of the revenue redistribution scheme aimed at remunerating market data providers, such as the maximum amount per user of the consolidated tape that would contribute to the revenue redistribution scheme put in place by the CTP, and the arrangements regarding the allocation of revenues. In particular, when specifying the allocation of revenues, ESMA shall take into account the following aspects, in the following order of priority:

Added(i) a fixed reward per contributor, reflecting fixed costs linked to their contribution;

Added(ii) revenue sharing towards smaller exchanges contributing to the CT;

Added(iii) revenue sharing based on an allocation key based on the contribution to price formation that each contributor’s data represents, giving consideration to the value and number of trades and quotes, the transparency of the underlying trading mechanism, and the extent to which a contributor’s pre-trade and post-trade data is disseminated by the CTP.

AddedESMA shall submit those draft regulatory technical standards to the Commission by ... [six months after the date of entry into force of this amending Regulation].

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

Added2. CTPs shall adopt and publish on their website on a quartely basis service level standards covering all of the following:

Added(a) an inventory of market data contributors from whom market data are received;

Added(aa) an assessment of the quality of data received per contributor;

Added(ab) the number of data quality incidents and the measures adopted to address them;

Added(b) modes and speed of delivery of consolidated market data to users;

Added(c) measures taken to ensure operational continuity in the provision of consolidated market data.

Added3. CTPs shall have sound security mechanisms in place designed to guarantee the security of the means of transfer of market data between the market data contributors and the CTP and between the CTP and the users and to minimise the risk of data corruption and unauthorised access. CTPs shall maintain adequate resources and have back-up facilities in place to offer and maintain its services at all times.

Added3a. CTPs shall publish a list of EEA International Securities Identification Number (ISIN) for all financial instruments that are covered by each CTP’s mandate in accordance with this Regulation.

AddedEach CTP shall offer free access to this list, and shall ensure that it is regularly reviewed and updated, to offer a comprehensive view of all the financial instruments covered by the consolidated tape

Added4. After 18 months of full operation of the CTP for shares, ESMA shall provide the Commission with an evidence-based motivated opinion on the effectiveness and fairness of the level of participation of market data contributors in the revenues generated by the CTP as set out in accordance with the second subparagraph of paragraph 1. The Commission may request ESMA to provide further opinions, where necessary or appropriate. The Commission shall be empowered to adopt a delegated act in accordance with Article 50 to revise the allocation key for the revenue redistribution, where appropriate.’;

Added(17) the following Article 27ha is inserted:

Added‘Article 27ha Reporting obligations for consolidated tape providers

Added1. CTPs shall, at the end of each quarter, publish on their website, which shall be accessible for free, performance statistics and incident reports relating to data quality and systems.

Added2. 2. ESMA shall develop draft regulatory technical standards to specify the content, timing, format and terminology of the reporting obligation.

AddedESMA shall submit those draft regulatory technical standards to the Commission by [OP please insert nine months after entry into force].

AddedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

Added3. CTPs shall keep and preserve records relating to their business for a period of no less than five years. Information concerning the first two years shall be kept in an easily accessible place, and the CTP shall promptly provide ESMA with such records upon request.’;

Added(17a) in Article 27i, the following paragraphs are inserted:

Added'4a. An ARM shall have objective, non-discriminatory and publicly disclosed requirements for access to its services by undertakings that are subject to the reporting obligation set out in Article 26.

AddedAn ARM shall publicly disclose the prices and fees associated with the data reporting services provided under this Regulation. It shall disclose separately the prices and fees of each service provided, including discounts and rebates and the conditions to benefit from those reductions. It shall allow reporting entities to access specific services separately. The prices and fees charged by an ARM shall be cost-related.

Added4b. ARMs shall keep and preserve records relating to their business for at least five years. The information concerning the first two years shall be kept in an easily accessible place and ARM shall provide such records to ESMA without delay upon request.’;

Added(18) in Article 28(1), paragraph 1, the introductory wording is replaced by the following:

Added(a) in paragraph 1, the introductory part is replaced by the following:

Added▌Transactions in OTC derivatives pertaining to a class of derivatives that has been declared subject to the trading obligation in accordance with the procedure set out in Article 32 of this Regulation and listed in the register referred to in Article 34 of this Regulation between counterparties as referred to in Article 4(1)(a) of Regulation (EU) No 648/2012 shall be concluded only on:’;

Added(b) the following paragraph 2a is inserted:

Added'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.';

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

Added‘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.

Added7a. 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.

AddedThe 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.

Added8. The request referred to in paragraphs 7 and 7a shall not be made public.

Added9. 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:

Added(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;

Added(b) reject the requested suspension.

AddedFor 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.’;

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

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

Added1. 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:

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

Added(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

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

Added1a. 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:

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

Added(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;

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

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

Added2. 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.

AddedThe 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.

Added2a. The implementing acts referred to in paragraphs 1 and 1a shall be adopted in accordance with the examination procedure referred to in Article 51.

Added3. The implementing act referred to in paragraphs 1 and 1a shall be accompanied by the evidence presented by the competent authority requesting the suspension.

Added4. 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.

Added5. The Commission shall regularly review whether the grounds for the suspension of the derivatives trading obligation continue to apply.’;