Changes from report parliamentary committee draft to plenary report

AddedESMA shall promptly provide the information referred to in the first subparagraph of this paragraph to the college of the CCP referred to in Article 18.

RemovedClarifying cross-reference to Article 24a(7)

Added2. ESMA shall, in close cooperation with EBA and the ESCB, develop draft regulatory technical standards further specifying the details and content of the information to be provided under paragraph 1.

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AddedESMA shall submit those draft regulatory technical standards to the Commission by … [12 months from the date of entry into force of this amending Regulation].

RemovedArticle 1 – paragraph 1 – point 12, Article 17a – paragraph 1: 1. The non-objection procedure shall apply to non-material changes to a CCP’s existing authorisation in cases where the proposed additional clearing service or activity does one or more of the following: / (a) adds a new currency to a class of financial instruments already covered by the CCP’s authorisation for which the CCP does not have in place the relevant payment facility; / (deleted) / (deleted) / (deleted) / (b) includes offering a new settlement or delivery mechanism or service which involves establishing links with a different securities settlement system, CSD or payment system that the CCP did not previously use; / (c) includes offering contracts that cannot be liquidated in the same manner, such as via direct offer or auction, or together with contracts already cleared by the CCP.

AddedPower is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

RemovedSee corresponding recital 21.

Added3. To ensure uniform conditions of application of paragraph 1, ESMA shall develop draft implementing technical standards specifying the data standards and formats for the information to be reported.

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AddedESMA shall submit those draft implementing technical standards to the Commission by … [12 months from the date of entry into force of this amending Regulation].

RemovedArticle 1 – paragraph 1 – point 12, Article 17a – paragraph 2: 2. The proposed additional clearing service or activity shall be considered a material change and subject to the procedure set out in Article 17 where it results in the CCP undertaking any of the following: / (a) significantly adapting its operational structure, at any point in the contract cycle; / (b) offering a service or performing an activity relating to a new category of financial instruments or a new type of products or a new type of transactions; / (c) offering a service or performing an activity for contracts traded on a trading venue, where the CCP was previously providing a service or performing an activity for those contracts traded on a bilateral basis only; / (d) offering a service or performing an activity for contracts traded on a bilateral basis, where the CCP was previously providing a service or performing an activity for those contracts on a trading venue only; / (e) taking into account material new contract specifications, such as a new option exercise styles within a category of contracts; / (f) the introduction of materially new risks, linked to the different characteristics of the assets referenced.

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

RemovedSee corresponding recital 21.

Added(5) Article 9 is amended as follows:

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Added(-a) paragraph 1 is amended as follows:

RemovedArticle 1 – paragraph 1 – point 12, Article 17a – paragraph 3 – subparagraph 2: deleted

Addedi. the first subparagraph is replaced by the following:

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Added‘Counterparties, including those established outside the Union and belonging to a group subject to consolidated supervision in the Union, and CCPs shall ensure that the details are reported of any derivative contract that they have concluded and of any modification or termination of the contract, in accordance with paragraphs 1a to 1f of this Article, to a trade repository registered in accordance with Article 55 or recognised in accordance with Article 77. The details shall be reported no later than on the working day following the conclusion, modification or termination of the contract.’

RemovedArticle 1 – paragraph 1 – point 12, Article 17a – paragraph 4: 4. Within 10 working days of receipt of an application pursuant to paragraph 2, ESMA shall, after considering the input of the college, decide whether the application shall be subject to the non-objection procedure set out in this Article or, if ESMA has identified material risks as a result of the proposed extension of the CCP’s business to additional clearing services or activities, that the procedure set out in Article 17 shall apply. ESMA shall notify the applicant CCP of its decision.

Addedii. the third and fourth subparagraphs are replaced by the following:;

RemovedThe 5 days period is removed as the possibility for CCPs to start providing clearing services prior to the approval is also removed.

Added‘Notwithstanding Article 3, the reporting obligation shall not apply to derivative contracts within the same group where at least one of the counterparties is a non-financial counterparty that is not subject to the clearing obligation, or would be qualified as a non-financial counterparty not subject to the clearing obligation, if it were established in the Union, provided that:

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Added(a) both counterparties are included in the same consolidation on a full basis;

RemovedArticle 1 – paragraph 1 – point 12, Article 17a – paragraph 5: 5. Where ESMA, after considering the input of the college, has not expressed its objection to the CCP’s proposed additional services or activities within 10 working days of receipt of the application where paragraph 1 applies or of receipt of the notification referred to in paragraph 4, where that paragraph applies, confirming that the non-objection procedure set out in this Article applies, the authorisation shall be deemed as granted.

Added(b) both counterparties are subject to appropriate centralised risk evaluation, measurement and control procedures; and

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

Added(c) the parent undertaking is not a financial counterparty.

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AddedCounterparties shall notify their competent authorities of their intention to apply the exemption referred to in the third subparagraph. The exemption shall be valid unless the notified competent authorities do not agree upon the fulfilment of the conditions set out in the third subparagraph within three months of the date of notification.’

RemovedArticle 1 – paragraph 1 – point 12, Article 17b – paragraph 1 – subparagraph 1 – introductory part: When intending to adopt a decision in relation to Article 20, 21, 30, 31, 32, 35, 41, 49, 51 or 54, ESMA shall submit in electronic format via the central database referred to in Article 17(7) a request for an opinion by the college pursuant to Article 18.

Added(b) in paragraph 1a, fourth subparagraph,

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

Added- point (a) is replaced by the following:

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Added“(a) that third country entity would be qualified as a financial counterparty if it were established in the Union; and”

RemovedArticle 1 – paragraph 1 – point 12, Article 17b – paragraph 1 – subparagraph 1– point a: deleted

Added- point (b) is deleted.

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Added(ba) paragraph 1f is replaced by the following:

RemovedArticle 1 – paragraph 1 – point 12, Article 17b – paragraph 1 – subparagraph 1 – point b: deleted

Added“‘1f. Counterparties and CCPs that are subject to the reporting obligation referred to in paragraph 1 may delegate that reporting obligation. Where they do so, counterparties and CCPs remain fully responsible, and legally liable, for reporting the details of derivatives as well as for ensuring the correctness of the details reported.”;

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Added(bb) the following paragraphs are added:

RemovedArticle 1 – paragraph 1 – point 12, Article 17b – paragraph 1 – subparagraph 2: The request for an opinion referred to in the first subparagraph, together with all relevant documents, shall be shared immediately with the registered recipients.

Added"6a. Where the data reported in accordance with Article 9 contain manifest errors or where financial or non-financial counterparties have not exercised due diligence when checking and reporting those data, ESMA shall, by decision, impose periodic penalty payments in order to compel that counterparty to put an end to its infringement.

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AddedThe periodic penalty payment shall be effective and proportionate, not exceeding a maximum 1% of the average daily turnover in the preceding business year.

RemovedArticle 1 – paragraph 1 – point 12, Article 17b – paragraph 2 – introductory part: 2. Unless otherwise specified under the relevant Article, the college shall, within 30 working days of receipt of the request referred to in paragraph 1 (‘the assessment period’), assess the CCP’s compliance with the respective requirements. By the end of the assessment period, ESMA shall transmit its draft decision and report to the CCP’s competent authority and the college, and the college shall adopt an opinion pursuant to Article 19 and transmit it to ESMA and the CCP’s competent authority. The college may include in its opinion any conditions or recommendations that it considers necessary to mitigate any shortcomings in the CCP's risk management.

AddedBy ... [12 months from the date of entry into force of this amending Regulation] ESMA shall draft guidelines in accordance with Article 16 of Regulation (EU) No 1095/2010 further specifying the due diligence checks and procedures expected from financial and non-financial counterparties subject to the reporting obligation in accordance with Article 9 of this Regulation and the maximum penalties that can be imposed, which shall in any case not exceed the maximum laid down in the second subparagraph of this paragraph.

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

Added6b. By … [24 months from the date of entry into force of this amending Regulation] ESMA shall submit a report to the Commission on whether the changes under Article 9(1) and paragraph 1 of this Article have resulted in a sufficiently clear improvement in the conduct of ESMA’s supervisory tasks and whether they have had an excessive negative impact on market participants. The report shall be accompanied by a cost-benefit analysis."

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Added(6) in Article 10, paragraphs 2a to 5 are replaced by the following:

RemovedArticle 1 – paragraph 1 – point 12, Article 17b – paragraph 2 – point a: deleted

Added‘2a. The relevant competent authorities of the non-financial counterparty and of the other entities within the group shall establish cooperation procedures to ensure the effective calculation of the positions and evaluate and assess the level of exposure in OTC derivative contracts at the group level.

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