Changes from report parliamentary committee draft to plenary report

AddedMember States shall also ensure that the provision of research by third parties to investment firms providing portfolio management or other investment or ancillary services to clients is to be regarded as fulfilling the obligations under paragraph 1 if the research is provided by an independent research provider that is not engaged in execution services and is not part of a financial services group that includes an investment firm that offers execution or brokerage services.

AddedInvestment firms shall keep a record of separate payments and gather information distinguishing the part of combined charges or joint payments for execution services and research that is attributable to research provided to them. Investment firms shall inform their clients annually, in an aggregated form, of their annual expenditure on research that is attributable to clients.

AddedMember States shall ensure that third party providers of research are not required to facilitate joint payment for execution services and research from investment firms. Member States shall also ensure that investment firms purchasing research from third party providers of research shall always be able to pay separately for the execution services and research that they receive.

AddedBy … [3 years from the date of entry into force of this amending Directive], ESMA shall prepare a report with a comprehensive assessment of the market developments regarding research within the meaning of this Article. That assessment shall incorporate at least the research coverage of listed firms, the costs and quality of that research, the impact of joint payments on best execution by investment firms, the share of separate and joint payments made by investment firms to third party providers for execution services and research, and the level of fulfillment of the demand for research by investors and other buyers.

AddedBased on that report, the Commission may, if appropriate, submit to the European Parliament and the Council a legislative proposal concerning changes to the rules laid down in this Directive regarding research.

Added(c) the following paragraph is inserted:

Added9b. ESMA shall organise a procedure for the establishment of a voluntary Union-wide research marketplace focusing on research into small and medium-sized enterprises and initial public offerings (IPOs). The research marketplace shall be funded through fixed contributions by participating firms. Research shall be commissioned by independent research providers.

AddedESMA shall develop draft regulatory technical standards setting out the conditions for establishment of a voluntary Union-wide research marketplace on research into small and medium-sized enterprises, including at least the following elements:

Added(a) the conditions for joining the research marketplace;

Added(b) the governance principles;

Added(c) the funding arrangements;

Added(d) the research coverage of the research marketplace.

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

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

Added__________________

Added* Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).

Added** Regulation (EU) …/… of the European Parliament and of the Council of… establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability (OJ L... ELI:....).

Added*** Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004, p. 38).’;

Added(2a) Article 27 is amended as follows:

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

Added‘1. Member States shall require that investment firms take all sufficient steps to obtain, when executing orders, the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature, the provision of investment research, or any other consideration relevant to the execution of the order. Nevertheless, where there is a specific instruction from the client the investment firm shall execute the order in accordance with that specific instruction.’;

Added(ab) the following paragraph is inserted:

Added‘1a. ESMA shall develop guidelines on how investment firms providing portfolio management or other investment or ancillary services to clients can comply with their best execution obligations when the investment firm uses joint payments for execution services and research as permitted under Article 24(9a).’;

Added(3) Article 33 is amended as follows:

Added(a) paragraphs 1 and 2 are replaced by the following:

Added‘1. Member States shall provide that the operator of a MTF may apply to its home competent authority to have the MTF or a segment thereof, registered as an SME growth market.

Added2. Member States shall provide that the home competent authority may register the MTF, or a segment thereof, as an SME growth market if the competent authority receives an application as referred to in paragraph 1 and is satisfied that the requirements in paragraph 3 are complied with in relation to the MTF, or that the requirements in paragraph 3a are complied with in relation to a segment of the MTF.’;

Added(b) the following paragraph▌ is inserted:

Added‘3a. Member States shall ensure that the relevant segment of the MTF is subject to effective rules, systems and procedures which ensure that the conditions referred to in paragraph 3 and all of the following conditions have been complied with:

Added(a) the segment of the MTF registered as ‘SME growth market’ is clearly separated from the other market segments operated by the MTF operator, which is inter alia indicated by a different name, different rulebook, different marketing strategy, and different publicity, as well as a specific allocation of the market identification code to the SME growth market segment;

Added(b) the transactions made on the specific SME growth market segment are clearly distinguished from other market activity within the other segments of the MTF;

Added(c) upon request of the MTF’s home competent authority, the MTF shall provide a comprehensive list of the instruments listed on the SME growth market segment concerned, as well as any information on the operation of the SME growth market segment that the competent authority may request.’;

Added(c) paragraphs 4 to 8 are replaced by the following:

Added‘4. The criteria laid down in paragraphs 3 and 3a are without prejudice to compliance by the investment firm or market operator operating the MTF, or a segment thereof, with other obligations under this Directive relevant to the operation of MTFs. Those criteria do not prevent the investment firm or market operator operating the MTF from imposing additional requirements to those laid down in paragraphs 3 and 3a.

Added5. Member States shall provide that the home competent authority may deregister a MTF, or a segment thereof, as an SME growth market in any of the following cases:

Added(a) the investment firm or market operator operating the MTF, or a segment thereof, applies for its deregistration;

Added(b) the requirements in paragraph 3 or 3a are no longer complied with in relation to the MTF, or a segment thereof.

Added6. Members States shall require that if a home competent authority registers or deregisters a MTF, or a segment thereof, as an SME growth market under this Article, that authority shall as soon as possible notify ESMA of that registration or deregistration. ESMA shall publish on its website a list of SME growth markets and shall keep that list up to date.’;

Added▌

Added7. Member States shall require that a financial instrument of an issuer which is admitted to trading on an SME growth market is able to be traded on another trading venue only if the issuer has been duly informed and has not objected.

AddedESMA shall develop guidelines on the communication methods used and the relevant timelines.

Added8. The Commission is empowered to adopt delegated acts in accordance with Article 89 to supplement this Directive by further specifying the requirements laid down in paragraphs 3 and 3a of this Article. Those requirements shall take into account the need to maintain high levels of investor protection to promote investor confidence in those markets while minimising the administrative burdens for issuers on the market. They shall also take into account that de-registrations do not occur nor shall registrations be refused merely because of a temporary failure to comply with the requirement laid down in paragraph 3, point (a), of this Article.’;

Added(4) the following article ▌ is inserted:

Added‘Article 51a Specific conditions for the admission of shares to trading

Added1. Member States shall require that the foreseeable market capitalisation of the shares for which admission to trading is sought, or if this cannot be assessed, the company’s capital and reserves, including profit and loss, from the last financial year, shall be at least EUR 1 000 000 or an equivalent amount in a national currency other than the Euro.

Added2. Paragraph 1 shall however not apply to the admission to trading of shares fungible with shares already admitted to trading.

Added3. Where, as a result of an adjustment of the equivalent amount of the Euro in national currency, the market capitalisation expressed in national currency remains for a period of 1 year at least 10 % approximately the value of EUR 1 000 000, the Member State shall, within the 12 months following the expiry of that period, adjust its laws, regulations or administrative provisions to comply with paragraph 1.

Added4. Member States shall ensure that regulated markets require at least 10% of the subscribed capital represented by the class of shares concerned by the application for admission to trading to be held by the public at the time of admission.

Added5. Where the percentage of shares held by the public is below 10% of the subscribed capital, Member States shall ensure that regulated markets require that a sufficient number of shares is distributed to the public to fulfil the requirement laid down in paragraph 4.

Added6. Where admission to trading is sought for shares fungible with shares already admitted to trading, regulated markets shall assess, to fulfil the requirement laid down in paragraph 4, whether a sufficient number of shares has been distributed to the public in relation to all the shares issued and not only in relation to the shares fungible with shares already admitted to trading.

Added7. The Commission is empowered to adopt delegated acts in accordance with Article 89 to amend this Directive by modifying the thresholds referred to in paragraphs 1 and 3 or in paragraphs 4 and 5 or in both, when the applicable thresholds impede the liquidity on public markets taking into account the financial developments.’;

Added(4a) In Article 69(2), first subparagraph, the following point is added:

Added‘(v) supervise whether investment firms that produce or distribute issuer-sponsored research do so in compliance with the Union code of conduct developed by ESMA as referred to in Article 24.’;

Added(5) Article 89 is amended as follows:

Added(a) paragraphs 2 and 3 are replaced by the following:

Added‘2. The delegation of power referred to in Article 2(3), Article 2(4), Article 4(1)(2), second subparagraph, Article 4(2), Article 13(1), Article 16(12), Article 23(4), Article 24(13), Article 25(8), Article 27(9), Article 28(3), Article 30(5), Article 31(4), Article 32(4), Article 33(8), Article 51a(7), Article 52(4), Article 54(4), Article 58(6), Article 64(7), Article 65(7) and Article 79(8) shall be conferred on the Commission for an indeterminate period of time.

Added3. The delegation of power referred to in Article 2(3), Article 2(4), Article 4(1)(2), second subparagraph, Article 4(2), Article 13(1), Article 16(12), Article 23(4), Article 24(13), Article 25(8), Article 27(9), Article 28(3), Article 30(5), Article 31(4), Article 32(4), Article 33(8), Article 51a(7), Article 52(4) Article 54(4), Article 58(6), Article 64(7), Article 65(7) and Article 79(8) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.’;

Added(b) paragraph 5 is replaced by the following:

Added‘5. A delegated act adopted pursuant to Article 2(3), Article 2(4), Article 4(1)(2), second subparagraph, Article 4(2), Article 13(1), Article 16(12), Article 23(4), Article 24(13), Article 25(8), Article 27(9), Article 28(3), Article 30(5), Article 31(4), Article 32(4), Article 33(8), Article 51a(7), Article 52(4), Article 54(4), Article 58(6), Article 64(7), Article 65(7) or Article 79(8) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or of the Council.’.

AddedDirective 2001/34/EC is repealed as of … [OP please insert the date = 24 months from date of entry into force of this Directive].