Changes from report parliamentary committee draft to plenary report

Added(c) in paragraph 15, first subparagraph is amended as follows:

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

Addedi. point (aa) is replaced by the following:.

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Added‘(aa) the supervisory procedures, to ensure initial and ongoing validation of the risk-management procedures referred to in paragraph 3, applied by the largest credit institutions authorised in accordance with Directive 2013/36/EU and the largest investment firms authorised in accordance with Directive 2014/65/EU as defined under paragraph 15(a);’

RemovedArticle 1 – paragraph 1 – point 15, Article 20 – paragraph 5: 5. ESMA may limit the withdrawal to a particular service, activity, or class of financial instruments or non-financial instruments.

Addedii. the following point is inserted:

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

Added‘(ab) the data standards, formats and type of information to be reported and disclosed on risk-management procedures, including where relevant on initial margin models, in accordance with the supervisory requirements referred to in point (aa);

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Addediii. the following subparagraph is inserted after point (c):

RemovedArticle 1 – paragraph 1 – point 15, Article 20 – paragraph 6: 6. Before ESMA takes a decision to withdraw a particular service, activity, or class of financial instruments or non-financial instruments, it shall request the opinion of the college in accordance with Article 17b.

Added‘In specifying the scope of application of the obligation under point (aa) of the first subparagraph, EBA shall ensure that only those counterparties that are particularly active in uncleared OTC derivatives are subject to initial and ongoing validation of the risk management procedures referred to in that paragraph.’’

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

Added(8) Article 13 is replaced by the following:

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Added‘Article 13

RemovedArticle 1 – paragraph 1 – point 15, Article 20 – paragraph 7: 7. Where ESMA takes a decision on the withdrawal of authorisation in full or in relation to a particular service, activity, or class of financial instruments or non-financial instruments, that decision shall take effect throughout the Union.;

AddedMechanism to avoid duplicative or conflicting rules

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

Added1. The Commission shall be assisted by the ESAs in monitoring the international application of the principles laid down in Article 11, in particular with regard to potential duplicative or conflicting requirements on market participants, and recommend possible action.

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Added2. The Commission may adopt implementing acts declaring that the legal, supervisory and enforcement arrangements of a third country:

RemovedArticle 1 – paragraph 1 – point 16 – point a, Article 21 – paragraph 1 – introductory part: 1. ESMA shall do all of the following:

Added(a) are equivalent to the requirements laid down in Article 11;

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

Added(b) ensure protection of professional secrecy that is equivalent to that set out in this Regulation; and

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Added(c) are being effectively applied and enforced in an equitable and non-distortive manner so as to ensure effective supervision and enforcement in that third country.

RemovedArticle 1 – paragraph 1 – point 16 – point a, Article 21 – paragraph 1 – point c a (new): (c a) prepare a plan for joint supervisory activities pursuant to Article 23b.

AddedThose implementing acts shall be adopted in accordance with the examination procedure referred to in Article 86(2).

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Added3. An implementing act on equivalence as referred to in paragraph 2, point (a), shall imply that counterparties entering into an OTC derivative contract not cleared by a CCP subject to this Regulation are to be deemed to have fulfilled the obligations contained in Article 11 where at least one of the counterparties is established in, or subject to the equivalent requirements of, that third country

RemovedArticle 1 – paragraph 1 – point 16 – point b – introductory part, Article 21 – paragraphs 3 to 5: (b) paragraphs 3, 4 and 5 are replaced by the following:

Added(9) Article 14 is amended as follows:

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Added(-a) paragraph 1 is replaced by the following:

RemovedArticle 1 – paragraph 1 – point 16 – point b, Article 21 – paragraph 3 – subparagraph 1: ESMA shall, after having considered the input of the college, establish the frequency, depth and substantive focus of the review and evaluation referred to in paragraph 1 of this Article, having particular regard to the size, systemic importance, nature, scale, complexity of the activities and interconnectedness with other financial market infrastructures of the CCPs concerned and to the supervisory priorities established by ESMA in accordance with Article 24a(7), first subparagraph, point (ba). ESMA shall update the review and evaluation at least on an annual basis.

Added‘Where a legal person established in the Union intends to provide clearing services as a CCP, it shall apply for authorisation to ESMA in accordance with the procedure set out in Article 17.

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

AddedESMA shall inform the competent authority of the Member State where that legal person is established without delay.’

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Added(a) paragraph 3 is replaced by the following:

RemovedArticle 1 – paragraph 1 – point 16 – point b, Article 21 – paragraph 3 – subparagraph 2: CCPs shall be subject to on-site inspections. ESMA shall invite the college to participate in on-site inspections.

Added‘3. The authorisation referred to in paragraph 1 shall be granted for activities linked to clearing and shall specify the services or activities which the CCP is authorised to provide or perform including the classes of financial instruments covered by such authorisation.

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

AddedAn entity applying for authorisation as a CCP to clear financial instruments shall include in its application, in addition to the classes of financial instrument it applies to clear, the classes of non-financial instruments suitable for clearing that such CCP intends to clear.

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AddedWhere a CCP authorised pursuant to this Article intends to clear classes of non-financial instruments suitable for clearing, it shall apply for an extension of its authorisation pursuant to Article 15.’;

RemovedArticle 1 – paragraph 1 – point 16 – point b, Article 21 – paragraph 3 – subparagraph 3: ESMA shall forward to the college the information received from the CCPs during or in relation to on-site inspections.

Added(aa) paragraph 4 is replaced by the following:

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

Added‘4. A CCP shall comply at all times with the conditions necessary for authorisation. A CCP shall, without undue delay, notify ESMA and the competent authority of any material changes affecting the conditions for authorisation.’

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Added(b) the following paragraphs 6 and 7 are added:

RemovedArticle 1 – paragraph 1 – point 16 – point b, Article 21 – paragraph 4: 4. ESMA shall regularly, and at least annually, submit a report to the college that includes the following: / (a) the results of the review and evaluation as referred to in paragraph 1, including whether ESMA has taken any remedial action or imposed penalties; and / (b) a plan for joint supervisory activities pursuant to Article 23b for the following calendar year. / ESMA shall communicate the report covering a calendar year to the CCP's competent authority and the college by 30 March of the following calendar year. That report shall be subject to an opinion of the college pursuant to Article 19 and issued in accordance with the procedure set out in Article 17b.;

Added‘6. To ensure the consistent application of this Article, ESMA shall, in close cooperation with the ESCB, develop draft regulatory technical standards specifying the list of required documents that shall accompany an application for authorisation pursuant to paragraph 1 and specifying the information that such documents shall contain with a view to demonstrating that the CCP complies with all relevant requirements of this Regulation.

RemovedChange to reflect the move to ESMA as the supervisor of EU CCPs. See explanatory statement for greater details.

AddedESMA shall submit those draft regulatory technical standards to the Commission by … [PO: please insert the date =12 months after the date of entry into force of this Regulation]

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