Changes from report parliamentary committee draft to plenary report

RemovedArticle 1 – paragraph 1 – point 29 – point a, Article 37 – paragraph 1: 1. A CCP shall establish, where relevant per type of product cleared, the categories of admissible clearing members and the admission criteria, upon the advice of the risk committee pursuant to Article 28(3). Such criteria shall be non-discriminatory, transparent and objective so as to ensure fair and open access to the CCP and shall ensure that clearing members have sufficient financial resources and operational capacity to meet the obligations arising from participation in a CCP. Criteria that restrict access shall be permitted only to the extent that their objective is to control the risk for the CCP. Without prejudice to interoperability arrangements, the criteria shall ensure that CCPs or clearing houses cannot be clearing members, directly or indirectly, of the CCP.;

Added(c) the following paragraph is inserted:

RemovedSee recital 21.

Added‘4a. For the purposes of carrying out the review and evaluation referred to in paragraph 1 of this Article, as well as establishing its frequency, depth and substantive focus in accordance with paragraph 3 of this Article, ESMA shall consider the outcome of the work the Joint Monitoring Mechanism has carried out pursuant to Article 23c, to the extent that such outcome is relevant for the CCP subject to such review and evaluation.’;

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

RemovedArticle 1 – paragraph 1 – point 29 – point b, Article 37 – paragraph 1a – subparagraph 2: ESMA shall regularly review the arrangements put in place by a CCP accepting non-financial counterparties and report to the CCP's competent authority and to the college on their appropriateness.

Added‘5. ESMA shall require any CCP that does not meet the requirements laid down in this Regulation to take the necessary action or steps at an early stage to address the situation.’;

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

Added(16 a) in Article 22(1), the first subparagraph is amended as follows:

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Added"1. Each Member State shall designate the competent authority responsible for carrying out the duties resulting from this Regulation for CCPs established in its territory and shall inform the Commission and ESMA thereof.";

RemovedArticle 1 – paragraph 1 – point 29 – point c, Article 37 – paragraph 7 – subparagraph 1: ESMA shall, after having consulted the EBA, develop draft regulatory technical standards further specifying the elements to be considered when laying down the admission criteria referred to in paragraph 1 and the participation requirements for accepting non-financial counterparties as clearing members in accordance with paragraph 1a

Added(16b) the following articles are inserted:

RemovedESMA’s mandate to develop the relevant draft regulatory technical standards should also extend to non-financial counterparties’ direct access to a CCP. The liquidity profile of such types of counterparties should need to be more carefully assessed by a CCP,especially whether they are able to meet potential increases in margin requirements or default fund contributions on a timely basis, even under stressed market conditions.

Added‘Article 22a

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AddedPowers of ESMA

RemovedArticle 1 – paragraph 1 – point 30, Article 38: deleted / (deleted) / (deleted) / (deleted) / (deleted)

Added1. ESMA shall be responsible for carrying out its duties under this Regulation for the authorisation and supervision of CCPs established in the Union.

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Added2. ESMA shall ensure on an ongoing basis the compliance by CCPs established in the Union with Articles 7 to 8, Articles 14 to 17ba, Article 20, 21, and 24 and Titles IV and V.

RemovedArticle 1 – paragraph 1 – point 30 a (new), Article 38: (30 a) Article 38 is replaced by the following: / "Article 38 / "1. A CCP and its clearing members shall publicly disclose the prices and fees associated with the services provided. They shall disclose the prices and fees of each service provided separately, including discounts and rebates and the conditions to benefit from those reductions. A CCP shall allow its clearing members and, where relevant, their clients separate access to the specific services provided. / A CCP shall account separately for costs and revenues of the services provided and shall disclose that information to ESMA and the competent authority. / 3. A CCP shall disclose to ESMA, its clearing members and to its competent authority the price information used to calculate its end-of-day exposures to its clearing members. / 5. A CCP shall publicly disclose any breaches by clearing members of the criteria referred to in Article 37(1) and the requirements laid down in paragraph 1 of this Article, except where ESMA, after consulting the competent authority, considers that such disclosure would constitute a threat to financial stability or to market confidence or would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved. / 8. Clearing members providing clearing services and clients providing clearing services shall inform their clients in a clear and transparent manner of the way the margin models of the CCP work, including in stress situations, and provide them wit…

Added3. ESMA shall be empowered with the supervisory, investigatory and enforcement powers necessary for the exercise of its functions under this Regulation.

Removed(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02012R0648-20220812)

Added4. The powers referred to in paragraph 3 shall include at least powers to:

RemovedThe development of draft regulatory technical standards in relation to transparency requirements applicable to CCPs and client clearing service providers would considerably enhance the standardisation and the quality of such disclosures. These draft regulatory technical standards would also ensure effective interaction between CCPs and client clearing service providers concerning their respective margin practices disclosure responsibilities. Furthermore, ongoing international work under the auspices of the Basel Committee on Banking Supervision, the Bank for International Settlements' Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions may result in further elaborations with respect to margin transparency, in particular the elements referred to in paragraphs 6 to 8 of Article 38 of EMIR.

Added(a) authorise a CCP for a particular clearing service or activity in financial instruments or non-financial instruments;

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Added(b) supervise the CCP’s compliance with the requirements laid down in this Regulation and adopt decisions and conduct supervisory assessments in relation to Articles 7 to 8, 14 to 17ba, 20, 21, and 24 and Titles IV and V;

RemovedArticle 1 – paragraph 1 – point 31 – point a, Article 41 – paragraph 2: 2. A CCP shall adopt models and parameters in setting its margin requirements that capture the risk characteristics of the products cleared and take into account the interval between margin collections, market liquidity and the possibility of changes over the duration of the transaction. The models shall be validated by ESMA and subject to an opinion in accordance with Article 19 in accordance with the procedure under Article 17b.

Added(c) have access to any document or other data from the CCP in a form which ESMA considers relevant for the performance of its duties and to receive or take a copy of such documents or data;

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

Added(d) require or demand the provision of information from any person related to the CCP and if necessary to summon and question a person with a view to obtaining information;

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Added(e) carry out joint on-site inspections or investigations with the CCP competent authority;

RemovedArticle 1 – paragraph 1 – point 31 – point a, Article 41 – paragraph 3: 3. A CCP shall call and collect margins on an intraday basis, at least when predefined thresholds are exceeded. In doing so a CCP shall consider the potential impact of its intraday margin collections and payments on the liquidity position of its participants.

Added(f) require the auditors of authorised CCPs to provide information ;

RemovedThe sentence should be deleted. The wording "shall strive to the best of its ability" is unclear and creates significant legal uncertainty. In addition, the article already includes a requirement for CCP to consider the impact that intraday margin calls may have on the liquidity positions of their participants, and margin requirements are already regulated via this Article and the related RTS (EU) No 153/2013.

Added(g) require, the temporary or permanent cessation of any practice or conduct that ESMA considers to be contrary to the provisions of this Regulation or where such practise or conduct may have an adverse effect on the CCPs cross-border activities or a possible cross-border impact;

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Added(h) require the removal of a natural person from the management board of an authorised CCP;

RemovedArticle 1 – paragraph 1 – point 32, Article 44 – paragraph 1 – subparagraph 2: A CCP shall measure, on a daily basis, its potential liquidity needs. It shall take into account the liquidity risk generated by the default of at least the two entities, being either clearing members or liquidity providers, to which it has the largest exposures.;

Added(i) impose fines and periodic penalty payments;

RemovedClarification that the requirement for CCPs to be prepared to cover the default of the two largest “entities” to which it has exposures covers clearing members and liquidity providers, but not other Financial Market Infrastructures such as interoperable CCPs.

Added(j) issue public notices; and

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Added(k) withdraw the authorisation of the CCP, or its authorisation for a particular service, activity or class of financial instruments or non-financial contract.

RemovedArticle 1 – paragraph 1 – point 33 – point a, Article 46 – paragraph 1: 1. A CCP shall accept highly liquid collateral with minimal credit and market risk to cover its initial and ongoing exposure to its clearing members. A CCP may accept public guarantees or public bank or commercial bank guarantees, including on an uncollateralised basis for non-financial counterparties, provided that they are unconditionally available upon request within the liquidation period referred to in Article 41. Where bank guarantees are provided to a CCP, that CCP shall take them into account when calculating its exposure to the bank that is also a clearing member. The CCP shall apply adequate haircuts to asset values and guarantees to reflect the potential for their value to decline over the interval between their last revaluation and the time by which they can reasonably be assumed to be liquidated. It shall take into account the liquidity risk following the default of a market participant and the concentration risk on certain assets that may result in establishing the acceptable collateral and the relevant haircuts. When revising the level of the haircuts it applies to the assets it accepts as collateral, the CCP shall take into account any potential procyclicality effects of such revisions.;

AddedESMA shall charge fees for undertaking their duties as set out under paragraph 1 and in accordance with the delegated act adopted pursuant to the next subparagraph of this paragraph.

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AddedBy ... [6 months from the date of entry into force of this amending Regulation] the Commission shall adopt a delegated act in accordance with Article 82 in order to specify further the following:

RemovedArticle 1 – paragraph 1 – point 33 – point a, Article 46 – paragraph 1a (new): (aa) the following paragraph is inserted: / 1a. Until ... [the date of entry into force of this Regulation] and the application of paragraph 1 of this Article, the provisions included in Article 1 of the European Commission Delegated Regulation 2022/2311 shall continue to apply.

Added(a) the types of fees;

RemovedThe amendments extends the validity of the temporary measures (introduced during the energy crisis) allowing the use of uncollateralised bank guarantees in some cases until the entry into force of this Regulation, in order to give certainty to the markets regarding the acceptance of collaterals.

Added(b) the matters for which fees are due;

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Added(c) the amount of the fees;

RemovedArticle 1 – paragraph 1 – point 33 – point b a (new), Article 46 – paragraph 3 – subparagraph 1 – point c (new): (ba) in paragraph 3, first subparagraph, the following point (c) is replaced by the following: / “(c) the conditions under which public guarantees, public bank guarantees and commercial bank guarantees may be accepted as collateral under paragraph 1. / When specifying these conditions, ESMA shall establish a minimum standard of acceptance, and shall leave the CCP to decide the level of collateralisation of those guarantees based on its risk assessment, including the possibility for those guarantees to be uncollateralised where appropriate, subject to appropriate concentration limits, credit quality requirements and stringent wrong-way risk requirements.”

Added(d) the manner in which fees are to be paid. (AM 121 and 409 Hübner)