Changes from report parliamentary committee draft to plenary report

RemovedRegulation (EU) No 648/2012

Added4. ESMA and authorities participating to the joint supervisory activities shall consult each other and agree on the use of resources with regard to the joint supervisory activities.”;

RemovedArticle 1 – paragraph 1 – point 34 – point b, Article 49 – paragraph 1f: 1f. The CCP may not adopt any significant change to the models and parameters referred to in paragraph 1, before obtaining the validations by ESMA. ESMA, may allow for a provisional adoption of a significant change of those models prior to their validations where duly justified due to an emergency situation under Article 24 of this Regulation. Such a temporary change to the models shall only be allowed for a certain period of time specified by ESMA. After the expiry of this period, the CCP shall not be allowed to use such model change unless it has been approved pursuant to paragraphs 1a, 1c, 1d and 1e.

AddedJoint Monitoring Mechanism

RemovedRegulation (EU) No 648/2012

Added1. ESMA shall establish a Joint Monitoring Mechanism for the exercise of the tasks referred to in paragraph 2.

RemovedArticle 1 – paragraph 1 – point 34 – point b, Article 49 – paragraph 1g: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

AddedThe Joint Monitoring Mechanism shall be composed of:

RemovedReplaced by below paragraph 1g

Added(a) representatives of ESMA;

RemovedRegulation (EU) No 648/2012

Added(b) representatives of EBA and EIOPA;

RemovedArticle 1 – paragraph 1 – point 34 – point b, Article 49 – paragraph 1ga (new): 1g a. Changes to parameters derived from external input or which are within a pre-defined range, where such amendment or range to recalibrate a model is part of the model or methodology approved and validated under this Article, shall not be considered a change to the models and parameters and require a validation in accordance with this Article.

Added(c) representatives of the Commission, the ESRB, the ECB and the ECB in the framework of the tasks concerning the prudential supervision of credit institutions within the single supervisory mechanism conferred upon it in accordance Council Regulation (EU) No 1024/2013.

RemovedNew paragraph to reflect that minor 'business-as-usual' changes do not require to follow a full approval process. Having minor changes not subject to any approval procedure represent the current practice of CCPs in line with EMIR and avoid unnecessarily burdening the relevant authorities with bureaucratic procedures.

Added(ca) representatives of the central banks of issue of the currencies other than the euro in which the derivative contracts referred to in Article 7a(2) are denominated.

RemovedRegulation (EU) No 648/2012

AddedESMA shall manage and chair the meetings of the Joint Monitoring Mechanism. The Chair of the Joint Monitoring Mechanism, upon request of the other members of the Joint Monitoring Mechanism or on his own initiative, may invite other authorities to participate in the meetings when relevant to the topics to be discussed.

RemovedArticle 1 – paragraph 1 – point 34 – point b, Article 49 – paragraph 1g b (new): 1g b. A change shall be considered as significant where one or more of the following conditions is met: / (a) the change leads to a decrease or increase of the total pre-funded financial resources, including margin requirements, default fund and skin-in-the-game, of more than 15%; / (b) the methodology for defining and calibrating stress test scenarios for the purpose of determining default fund exposures, is changed, leading to a decrease or increase of more than 20 % of a default fund or of more than 50 % of any individual default fund contribution; / (c) the methodology applied to assess liquidity risk and monitor concentration risk, is changed, leading to a decrease or increase of the estimated liquidity needs in any currency of more than 20 % or the total liquidity needs of more than 20 %; / (d) the methodology applied to value collateral, or calibrate collateral haircut, is changed, such that the total value of collateral decreases or increases by more than 20%; / (e) any other change to the models that could have a material effect on the overall risk of the CCP.

Added2. The Joint Monitoring Mechanism shall:

RemovedRegulation (EU) No 648/2012

Added(a) monitor the implementation of the requirements set out in Articles 7a and 7b, including all of the following:

RemovedArticle 1 – paragraph 1 – point 34 – point c, Article 49 – paragraph 5 – subparagraph 1: ESMA shall, in close cooperation with the ESCB, develop draft regulatory technical standards specifying: / (a) the list of required documents that shall accompany an application for validation pursuant to paragraph 1a and shall specify the information such documents shall contain to demonstrate that the CCP complies with all relevant requirements of this Regulation; and / (b) the elements and indicators to assess for the purposes of deciding whether an effect is to be considered as having a material effect on the overall risk of the CCP under paragraph 1g(g).

Added(i) the overall exposures and reduction of exposures to substantially systemically important clearing services identified pursuant to Article 25(2c);

RemovedRegulation (EU) No 648/2012

Added(ii) developments related to clearing in CCPs authorised under Article 14 and access to clearing by clients to such CCPs, including fees charged by such CCPs for establishing accounts pursuant to Article 7a and any fees charged by clearing members to their clients for establishing accounts and undertaking clearing pursuant to Article 7a;

RemovedArticle 1 – paragraph 1 – point 34 – point d a (new), Article 49 – paragraph 7 (new): (d a) the following paragraph is added: / '7. The Commission is empowered to adopt delegated acts in accordance with Article 82 to supplement this Regulation by specifying any changes to the list of conditions defining a significant change listed under paragraph 1g, where such a change would not result in an increased risk to the CCP.’;

Added(iii) other significant developments in clearing practices having an impact on the level of clearing at CCPs authorised under Article 14;

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Added(b) monitor client clearing relationships, including portability and clearing members and clients’ interdependencies and interactions with other financial market infrastructures;

RemovedArticle 1 – paragraph 1 – point 35, Article 54 – paragraph 1: deleted / (deleted)

Added(c) contribute to the development of Union-wide assessments of the resilience of CCPs focussing on liquidity, credit and operational risks concerning CCPs, clearing members and clients;

RemovedRegulation (EU) No 648/2012

Added(d) identify concentration risks, in particular in client clearing, due to the integration of Union financial markets, including where several CCPs, clearing members or clients use the same service providers, due to clients accessing the same CCP via different clearing members of that CCP, or due to clients maintaining large positions in markets of products that the CCP clears, or due to several clients clearing through few clearing members;

RemovedArticle 1 – paragraph 1 – point 35 a (new), Article 54: (35 a) Article 54 is replaced by the following: / "1. An interoperability arrangement shall be subject to the prior approval of ESMA. ESMA shall request the opinion of the college in accordance with Article 19, and issued in accordance with the procedure set out in Article 17b. / ESMA shall assess whether authorised and recognised CCPs that at the time of the entry into force of this Regulation already have interoperability arrangements in place shall be subject to this Article, and communicate its decision in writing to the relevant CCPs within 60 working days from ... [the date of the entry into force of this Regulation]. / 2. ESMA shall grant approval of the interoperability arrangement only where the CCPs involved have been authorised to clear under Article 17 or recognised under Article 25 or authorised under a pre-existing national authorisation regime for a period of at least three years, the requirements laid down in Article 52 are met and the technical conditions for clearing transactions under the terms of the arrangement allow for a smooth and orderly functioning of financial markets and the arrangement does not undermine the effectiveness of supervision. / 3. Where ESMA considers that the requirements laid down in paragraph 2 are not met, it shall provide explanations in writing regarding its risk considerations to the CCPs involved. / 4. By 31 December 2012, ESMA shall issue guidelines or recommendations with a view to establishing consistent, efficient and effec…

Added(e) monitor the effectiveness of the measures aimed at improving the attractiveness of Union CCPs, encouraging clearing at Union CCPs and enhancing the monitoring of cross-border risks.

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

AddedThe bodies participating in the Joint Monitoring Mechanism and national competent authorities shall cooperate and share the information necessary to carry out the monitoring activities referred to in the first subparagraph.

RemovedRegulation (EU) No 648/2012

AddedWhere the required information is not made available, including information referred to in Article 7a(4), ESMA may, by simple request, require authorised CCPs, their clearing members and their clients to provide the necessary information enabling ESMA and the other bodies participating to Joint Monitoring Mechanism to perform the assessment referred to in the first subparagraph.

RemovedArticle 1 – paragraph 1 – point 35 b (new), Article 81 – paragraph 3 – subparagraph 1 – point s (new): (35 b) in Article 81(3), the following point is added : / "(s) the members of the Joint Monitoring Mechanism referred to in Article 23c."

Added3. ESMA shall, in cooperation with the other bodies participating to the Joint Monitoring Mechanism, submit an annual report to the European Parliament, the Council and the Commission on the results of its activities pursuant to paragraph 2.

RemovedExtension of Article 81 to grant the JMM members access to trade repository data to facilitate the exercise of its functions and to facilite exchange of information between its member institutions.

AddedWhere appropriate, this report shall include recommendations for potential Union-level action to address identified horizontal risks.

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Added▌

RemovedArticle 1 – paragraph 1 – point 37 – point c a (new), Article 89 – paragraph 10: (c a) in Article 89, the following paragraph is added : / “ 10. Financial counterparties that are subject to the clearing obligation referred to in Article 4(1) on ... [the date of entry into force of this Regulation] or that become subject to the clearing obligation in accordance with Article 4a(1) and non-financial counterparties that are subject to the clearing obligation referred to in Article 4(1) on ... [the date of entry into force of this Regulation] or that become subject to the clearing obligation in accordance with Article 10(1), second subparagraph, shall remain subject to that clearing obligation and shall continue clearing until such financial counterparty or non-financial counterparty demonstrates to the relevant competent authority that its aggregate month-end average position for the previous 12 months does not exceed the relevant clearing thresholds set by the regulatory technical standards referred to in Article 10(4), point (b), and where such regulatory technical standards have entered into force providing the levels of the clearing thresholds for uncleared derivatives and the level of any activity threshold.”

Added▌

RemovedRegulation (EU) No 648/2012

Added(19) Article 24 is replaced by the following:

RemovedArticle 1 – paragraph 1 – point 37 – point c b (new), Article 89 – paragraph 10 (new): (c b) the following paragraph is added: / 10. By ... [18 months after the date of entry into force of this Regulation] ESMA shall, in close cooperation with the ESRB and the Joint Monitoring Mechanism, assess how the provisions of Article 15, Articles 17 to 17b and Article 49 have been applied. / In particular, that assessment shall establish: / (a) whether the changes introduced by Regulation (EU) .../... of the European Parliament and of the Council*+ have obtained the desired effect with respect to increasing the competitiveness of EU CCPs and reduce the regulatory burden they face; / (b) whether the changes introduced by Regulation (EU) .../...+ have reduced the time-to-market for new services and products without negatively impacting the risk for the CCP or its clearing members or their clients; / (c) whether the introduction of the possibility for CCPs to implement directly changes that qualify neither as material nor as non-material for the purposes of Articles 17, 17a and 49, have negatively impacted the risk profile of that CCP or have increased the overall financial stability risks in the Union, and whehter they should be amended. / ESMA shall submit that report to the European Parliament, the Council and the Commission. / The Commission shall be empowered to adopt delegated acts in accordance with Article 50 to modify certain elements of the definitions laid down in Article 15, Articles 17 to 17b and Article 49 to consider the assessment contained in the report pur…

Added‘Article 24

RemovedRegulation (EU) 2017/1131

AddedEmergency situations

RemovedArticle 3 – paragraph 1 – point 2 – point a, Article 17 – paragraph 4: 4. The aggregate risk exposure to the same counterparty of an MMF stemming from derivative or repurchase agreement transactions which fulfil the conditions set out in Article 13 and which are not centrally cleared through a CCP authorised in accordance with Article 14 of Regulation (EU) No 648/2012 or recognised in accordance with Article 25 of that Regulation, shall not exceed 5 % of the assets of the MMF.;

Added1. ESMA shall inform ESMA, the college, the relevant members of the ESCB, the Commission and other relevant authorities without undue delay of any emergency situation relating to a CCP, including all of the following:

RemovedLimiting MMF uncleared exposure to the repo market (currently widely used) would incentivize central clearing by MMFs.

Added(a) situations or events which impact, or are likely to impact, the prudential or financial soundness or the resilience of CCPs authorised in accordance with Article 14, their clearing members or clients;