Changes from report parliamentary committee draft to plenary report

Added1c. Within 30 working days of the date referred to in the third subparagraph of paragraph 1a, ESMA shall conduct a risk assessment of the significant change and transmit its draft decision to the CCP's competent authority and the college.

AddedWithin 10 working days of receipt of the draft decision of ESMA, the college shall adopt an opinion pursuant to Article 19 and transmit it to ESMA

Added▌

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Added1d. Within 10 working days of receipt of the college opinion, ESMA shall, after duly considering the opinion of the college, including any conditions or recommendations contained therein, adopt its final decision and transmit it to the CCP's competent authority and the college.

AddedWhere ESMA does not agree with the opinion of the college, including any conditions or recommendations contained therein, its decision shall contain full reasons and an explanation of any significant deviation from that opinion or conditions or recommendations. Where ESMA decides not to validate the change, the CCP's application for validation shall be refused.

Added1e. Within 5 working days of the decisions being adopted under paragraph 1c, ▌ESMA shall inform the CCP’s competent authority and the CCP in writing, including a fully reasoned explanation, whether the validation has been granted or refused.

Added(b) the following paragraphs 1f and 1g are inserted:

Added1f. The CCP may not adopt any significant change to the models and parameters referred to in paragraph 1, before obtaining the validations by its competent authority and ESMA. The competent authority, in agreement with 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 jointly specified by the CCP’s competent authority and 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.

Added1g. 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 requiring validation in accordance with this Article. .”

Added1ga. A change shall be considered as significant where one or more of the following conditions is met:

Added(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%;

Added(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;

Added(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 %;

Added(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%;

Added(e) the change could have a material effect on the overall risk of the CCP.

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

Added‘5. ESMA shall, in close cooperation with the ESCB, develop draft regulatory technical standards specifying:

Added(a) the elements to be considered when assessing the conditions referred to in paragraphs 1g and 1ga; and

Added(b) 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.

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

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.’;

Added(d) the following paragraph 6 is added:

Added‘6. ESMA shall develop draft implementing technical standards specifying the electronic format of the application for validation referred to in paragraph 1a to be submitted to the central database.

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

AddedPower is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.’

Added(35) ▌Article 54▌ is replaced by the following:

Added‘Article 54

AddedApproval of interoperability arrangements

Added‘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.’;

AddedInteroperability arrangements that were approved prior to the entry into force of this Regulation shall not be subject to the requirements of the first subparagraph.

Added2. 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.

Added3. 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.

Added4. By 31 December 2012, ESMA shall issue guidelines or recommendations with a view to establishing consistent, efficient and effective assessments of interoperability arrangements, in accordance with the procedure laid down in Article 16 of Regulation (EU) No 1095/2010.’

Added(36)iIn Article 81(3), the following point is inserted:

Added‘(s) the designated national macroprudential authorities entrusted with the conduct of macroprudential policy’ referred to in Recommendation B1 of the Recommendation of the European Systemic Risk Board (ESRB) of 22 December 2011 on the macroprudential mandate of national authorities (ESRB/2011/3).’;

Added(37) In Article 82, paragraphs 2 and 3 are replaced by the following:

Added“2. The power to adopt delegated acts referred to in Articles 1(6), Article 3(5), Article 4(3a), Article 7a(6), Article 17a(6), Article 25(2a), Article 25(6a), Article 25a(3), Article 25d(3), Article 25i(7), Article 25o, Article 64(7), Article 70, Article 72(3), and Article 85(2) shall be conferred to the Commission for an indeterminate period of time.

Added3. The delegation of power referred to in Article 1(6), Article 3(5), Article 4(3a), Article 7a(6), Article 17a(6), Article 25(2a), Article 25(6a), Article 25a(3), Article 25d(3), Article 25i(7), Article 25o, Article 64(7), Article 70, Article 72(3) and Article 85(2) 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(38) in Article 84, the following paragraph is inserted:

Added‘3a. The Agency implementing Article 8(2) and (6) of Regulation (EU) No 1227/2011 shall transmit to ESMA the amount of trading taking place and on positions held in wholesale energy products.’

Added(39) Article 85 is amended as follows;

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

Added‘1. By [PO: please insert the date =5 years after the date of entry into force of this Regulation] the Commission shall assess the application of this Regulation and prepare a general report. The Commission shall submit that report to the European Parliament and to the Council, together with any appropriate proposals.’;

Added(b) the following paragraph 1b is inserted:

Added‘1b. By [PO: please insert the date = 1 year after the entry into force of this Regulation] ESMA shall submit a report to the Commission on the possibility and feasibility to require the segregation of accounts across the clearing chain of non-financial and financial counterparties. The report shall be accompanied by a cost-benefit analysis.’;

Added(bb) the following paragraph is inserted:

Added‘1d. By ... [24 months from the date of entry into force of this amending Regulation], the European Commission, after having consulted the ECB and the relevant central banks of issue, shall provide a report to the European Parliament and the Council assessing level playing field and financial stability considerations in relation to generalized central bank access for EMIR-authorized Union CCPs without the condition of maintaining a banking license. In this context, the Commission shall also take into consideration the situation in third-country jurisdictions. If appropriate, the report shall be accompanied by a legislative proposal.' (AM 532 Ferber);

Added(bc) the following paragraph is inserted:

Added‘5a. By ... [36 months from the date of entry into force of this amending Regulation] ESMA shall present a report to the European Parliament, the Council and the Commission on the overall activity in derivative transactions of financial and non-financial counterparties subject to this Regulation, providing, inter alia, the following information on those counterparties, differentiating between their financial or non-financial nature:

Added(a) the potential risks to Union financial stability that may arise from this type of activity;

Added(b) the positions in OTC commodity derivatives in excess of EUR 1 billion, specifying the exact amount of the positions concerned;

Added(c) the total volume of energy derivative contracts traded, distinguishing, where relevant, between those used for hedging and non-hedging purposes;

Added(d) the total volume of agricultural derivative contracts traded, distinguishing, where relevant, between those used for hedging and non-hedging purposes; and

Added(e) the share of OTC and exchange-traded energy/agriculture derivative contracts that are physically delivered on the expiry date in the total volume of energy derivative contracts traded.

Added(c) paragraph 7 is replaced by the following:

Added“7. By ... [5 years from the date of entry into force of this amending Regulation] the Commission, in close cooperation with ESMA and the Joint Monitoring Mechanism, shall publish a review report on the application of this Regulation. That report shall evaluate, inter alia, the following:

Added(a) the effectiveness of the provisions under Article 7a in mitigating the financial stability risks for the Union represented by the concentration of outstanding derivative contracts as referred to in paragraph 3 of Article 7a at those Tier 2 CCPs offering services of substantial systemic importance pursuant to Article 25(2c), as well as their impact on the international competitiveness of EU financial counterparties and non-financial counterparties. The report shall also indicate, taking into due account the goals of the capital markets union, whether those provisions should be adjusted or removed altogether;

Added(b) the effectiveness of the provisions of this Regulation on increasing the attractiveness of the Union clearing framework, looking in particular at the clearing activities of non-EU counterparties in Union CCPs and the amount of clearing volumes in Union CCPs in derivative contracts other than those referred to in paragraph 3 of Article 7a;

Added(c) an assessment of the developments related to supervisory arrangements and supervisory cooperation between ESMA and third-country authorities, and whether those developments may require changes to Article 25(2c) of this Regulation.