Changes from report parliamentary committee draft to plenary report

AddedThe funding decisions and the agreements and the implementing instruments resulting from them explicitly stipulate that the Court of Auditors and OLAF may, if need be, carry out on the spot checks on the beneficiaries of monies disbursed by ESMA as well as on the staff responsible for allocating these monies.

Added3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

Added3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s) affected

AddedExisting budget lines

AddedIn order of multiannual financial framework headings and budget lines.

AddedNew budget lines requested

AddedIn order of multiannual financial framework headings and budget lines.

Added3.2. Estimated financial impact of the proposal on appropriations

AddedThis legislative initiative will have no impact on expenditures for the European Securities and Markets Authority (ESMA) or other bodies of the European Union.

AddedESMA: The impact assessment identified only moderate additional costs for ESMA, while at the same time the proposed measures create efficiencies that will lead to cost reductions. In addition, some provisions clarify and recalibrate the role of ESMA whilst not constituting new tasks and are therefore to be considered budget neutral.

AddedCosts identified relate to the setting up and operation of a new IT tool for the submission of supervisory documents. However, even though ESMA might incur higher costs related to developing or choosing such a new IT tool as well as operating it, this IT tool will also create efficiencies and ESMA will benefit from those. These efficiencies relate to considerably less manual work in the reconciliation and sharing of documents, the following up on deadlines and questions as well as coordination with national competent authorities (NCAs), the college and the CCP Supervisory Committee. These benefits are likely to outweigh the costs incurred.

AddedFurthermore, initial additional (paper-)work related to the modification of tools and procedures, as well as to enhanced cooperation, may increase costs initially, but is likely to be reduced, or remain stable, over time. Notably, ESMA will be required to draft regulatory / implementing technical standards (RTS/ITS) on the format and content of the documents CCPs are required to submit to supervisory authorities, the specification of the requirement for clearing members and clients to have an active account at a Union CCP, the calculation methodology to be used to calculate the proportion, the scope and details of the reporting by EU clearing members and clients to their competent authorities on their clearing activity in third-country CCPs and whilst providing the mechanisms triggering a review of the values of the clearing thresholds following significant price fluctuations in the underlying class of OTC derivatives to also review the scope of the hedging exemption and thresholds for the clearing obligation to apply as well as an annual report on the results of their monitoring activity. In undertaking those activities, ESMA can build on already existing internal processes and procedures, and it may convert, where relevant, those procedures into RTSs/ITSs. In defining the active account requirement, for some already identified instruments, and their ongoing monitoring, ESMA can take into account the work it has undertaken under Article 25(2c) of EMIR when assessing which Tier 2 CCPs’ clearing services are of substantial systemic importance to the Union or one or more of its Member States and might therefore only require some very limited additional resources.

AddedAnother category to be considered in the cost analysis is the modification of procedures and tools to the new supervisory cooperation framework. The cooperation in joint supervisory teams and the establishment of a joint monitoring mechanism at EU level are new elements in the supervisory framework. However, they are mainly tools to improve the cooperation between authorities and cover tasks that are already, in all essential parts, performed by the authorities, except for the monitoring of the implementation of the requirements set out for active accounts at EU CCPs, such as fees for access charged by CCPs to clients for active accounts. These new structures will likely require some reorganisation of staff and potentially create the need for additional meetings but will not have substantial budgetary implications. Moreover, the recalibrated supervisory process also comes with benefits, notably clearer responsibilities avoiding unnecessary duplicative work and less work due to the introduction of non-objection procedures which enable ESMA and NCAs to focus on the material aspects of supervision in relation to the extension of clearing services and changes to CCPs’ risk models.

AddedThe proposed approach towards third-country CCPs that refuse to pay fees to ESMA consists in issuing a public notice after 6 months due and initiate the withdrawal of recognition after 1 year due. This change will be positive in terms of costs. This avoids ESMA from having to invest a considerable amount of work without getting remunerated for it.

AddedIn addition, further provisions are introduced which clarify and recalibrate the role of ESMA and are therefore to be considered budget neutral. For instance, ESMA already has the obligation to issue opinions in relation to certain aspects of supervision, however the content of those opinions is recalibrated to ensure a higher degree of efficiency in the supervisory process and ESMA is given a formal opportunity to issue an opinion on CCPs’ annual review and evaluation as well as on the withdrawal of their authorisation and to take a clear role in coordinating emergency situations. These are tasks that, in all material respects, relate to their already existing ongoing work and the provisions clarify and therefore strengthen ESMA’s position, providing clear responsibilities.

AddedOther European Union bodies: Even though smaller changes to the role of other European Union bodies, such as the European Commission or the European Central Bank, are introduced, they will not have budgetary implications.

Added3.2.1. Summary of estimated impact on operational appropriations

AddedThe proposal/initiative does not require the use of operational appropriations

AddedThe proposal/initiative requires the use of operational appropriations, as explained below:

AddedEUR million (to three decimal places)

AddedIf more than one operational heading is affected by the proposal / initiative, repeat the section above:

AddedThis section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative Financial Statement (Annex V to the internal rules), which is uploaded to DECIDE for interservice consultation purposes.

AddedEUR million (to three decimal places)

AddedEUR million (to three decimal places)

Added3.2.2. Estimated output funded with operational appropriations

AddedCommitment appropriations in EUR million (to three decimal places)

Added3.2.3. Summary of estimated impact on administrative appropriations

AddedThe proposal/initiative does not require the use of appropriations of an administrative nature

AddedThe proposal/initiative requires the use of appropriations of an administrative nature, as explained below:

AddedEUR million (to three decimal places)

AddedThe appropriations required for human resources and other expenditure of an administrative nature will be met by appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.

Added3.2.3.1. Estimated requirements of human resources

AddedThe proposal/initiative does not require the use of human resources.

AddedThe proposal/initiative requires the use of human resources, as explained below:

AddedEstimate to be expressed in full time equivalent units

AddedXX is the policy area or budget title concerned.

AddedThe human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.

AddedDescription of tasks to be carried out:

Added3.2.4. Compatibility with the current multiannual financial framework

AddedThe proposal/initiative:

Addedcan be fully financed through redeployment within the relevant heading of the Multiannual Financial Framework (MFF).

AddedExplain what reprogramming is required, specifying the budget lines concerned and the corresponding amounts. Please provide an excel table in the case of major reprogramming.

Addedrequires use of the unallocated margin under the relevant heading of the MFF and/or use of the special instruments as defined in the MFF Regulation.

AddedExplain what is required, specifying the headings and budget lines concerned, the corresponding amounts, and the instruments proposed to be used.

Addedrequires a revision of the MFF.

AddedExplain what is required, specifying the headings and budget lines concerned and the corresponding amounts.

Added3.2.5. Third-party contributions

AddedThe proposal/initiative:

Addeddoes not provide for co-financing by third parties

Addedprovides for the co-financing by third parties estimated below:

AddedAppropriations in EUR million (to three decimal places)

Added3.3. Estimated impact on revenue

AddedThe proposal/initiative has no financial impact on revenue.

AddedThe proposal/initiative has the following financial impact:

Addedon own resources

Addedon other revenue

Addedplease indicate, if the revenue is assigned to expenditure lines

AddedEUR million (to three decimal places)

AddedFor assigned revenue, specify the budget expenditure line(s) affected.

Added[…]