Changes from report parliamentary committee draft to plenary report

Added(16) Article 30 is amended as follows:

Added(a) in paragraph 2, points (b), (c) and (e) are deleted;

Added(b) paragraph 5 is deleted.

Added(17) ▌Article 32 is amended as follows:

Added(a) in paragraph 1, the first subparagraph, is amended as follows:

Added(i) the introductory wording is replaced by the following:

Added‘Without prejudice to the right for Member States to provide for and impose criminal sanctions pursuant to Article 34, Member States shall lay down rules establishing appropriate administrative sanctions, in the case of negligence or intentional infringement, and remedial measures, applicable to situations where:’;

Added(ii) points (e) to (h) are deleted.

Added(iii) the following point (i) is added:

Added‘(i) an institutional investor, other than the originator, sponsor or original lender, has failed to meet the requirements provided for in Article 5.’;

Added(b) paragraph 2 is amended as follows:

Added(i) the introductory wording is replaced by the following:

Added‘2. Member States shall confer on competent authorities the power to apply the following sanctions and measures in the event of the infringements referred to in paragraph 1:’;

Added(ii) point (d) is deleted;

Added(iii) the following point is inserted:

Added‘(fa) in the case of an institutional investor, or the delegate pursuant to Article 5(5), maximum administrative pecuniary sanctions of up to the half of the invested amount;’;

Added(iv) point (h) is deleted;

Added(v) the following subparagraph is added:

Added‘When laying down rules establishing administrative sanctions and administrative measures, Member States shall take into account any sanctions and measures implemented in accordance with sectoral regulation in order to avoid duplications for the same infringement by reason of negligence or omission;’;

Added(17a) the following article is inserted:

Added‘Article 33a

AddedDirect supervision of STS securitisations and third party verifiers

Added1. Where the EBA´s Board of Supervisors finds that an originator, sponsor, SSPE or, in the case of securitisations of trade receivables where no SSPE is used in accordance with Article 20, the buyer of the underlying exposures has, intentionally or negligently, committed one of the infringements listed in the second subparagraph, the EBA shall adopt a decision imposing one or more of the relevant sanctions or measures listed in paragraph 3 of this Article.

AddedThe infringements referred to in the first subparagraph are the following:

Added(a) a securitisation is designated as STS and an originator, sponsor or SSPE of that securitisation has failed to meet the requirements provided for in Articles 19 to 22, Articles 23 to 26 or Articles 26a to 26e;

Added(b) an originator, sponsor or the buyer of the underlying exposures makes a misleading notification pursuant to Article 27(1); or

Added(c) an originator, sponsor or the buyer of the underlying exposures has failed to meet the requirements provided for in Article 27(4).

Added2. Where ESMA´s Board of Supervisors finds that a third party verifying STS compliance with Article 28 has, intentionally or negligently, failed to notify material changes to the information provided in accordance with Article 28(1), or any other changes that could reasonably be considered to affect the assessment of ESMA, ESMA shall adopt a decision imposing one or more of the sanctions or measures listed in paragraph 3 of this Article.

Added3. The EBA and ESMA shall have the power to apply one or more of the following sanctions and measures in the event of infringements referred to in paragraphs 1 and 2, respectively:

Added(a) a public statement which indicates the identity of the natural or legal person and the nature of the infringement in accordance with Article 37;

Added(b) an order requiring the natural or legal person to cease the conduct and to desist from a repetition of that conduct;

Added(c) a temporary ban preventing any member of the originator’s, sponsor’s or SSPE’s management body or any other natural person held responsible for the infringement from exercising management functions in such undertakings;

Added(d) in the case of an infringement as referred to in paragraph 1, point (a) or (b), of this Article a temporary ban preventing the originator and sponsor from notifying under Article 27(1) that a securitisation meets the requirements set out in Articles 19 to 22, Articles 23 to 26 or Articles 26a to 26e;

Added(e) in the case of a natural person, maximum administrative pecuniary sanctions of at least EUR 5 000 000 or, in the Member States whose currency is not the euro, the corresponding value in the national currency on 17 January 2018;

Added(f) in the case of a legal person, maximum administrative pecuniary sanctions of at least EUR 5 000 000, or in the Member States whose currency is not the euro, the corresponding value in the national currency on 17 January 2018 or of up to 10 % of the total annual net turnover of the legal person according to the last available accounts approved by the management body; where the legal person is a parent undertaking or a subsidiary of the parent undertaking which has to prepare consolidated financial accounts in accordance with Directive 2013/34/EU, the relevant total annual net turnover shall be the total net annual turnover or the corresponding type of income in accordance with the relevant accounting legislative acts according to the last available consolidated accounts approved by the management body of the ultimate parent undertaking;

Added(g) maximum administrative pecuniary sanctions of at least twice the amount of the benefit derived from the infringement where that benefit can be determined, even if that exceeds the maximum amounts in points (e) and (f);

Added(h) in the case of an infringement as referred to in paragraph 2, a temporary withdrawal of the authorisation referred to in Article 28 for the third party authorised to assess the compliance of a securitisation with Articles 19 to 22, Articles 23 to 26 or Articles 26a to 26e.

Added4. The EBA and ESMA, when determining the type and level of an administrative sanction or remedial measure imposed under this Article, shall take into account the extent to which the infringement is intentional or results from negligence and all other relevant circumstances, including, where appropriate:

Added(a) the materiality, gravity and the duration of the infringement;

Added(b) the degree of responsibility of the natural or legal person responsible for the infringement;

Added(c) the financial strength of the responsible natural or legal person;

Added(d) the importance of profits gained or losses avoided by the responsible natural or legal person, insofar as they can be determined;

Added(e) the losses for third parties caused by the infringement, insofar as they can be determined;

Added(f) the level of cooperation of the responsible natural or legal person with EBA or ESMA, without prejudice to the need to ensure disgorgement of profits gained or losses avoided by that person;

Added(g) previous infringements by the responsible natural or legal person.

Added5. Any decision by the EBA or ESMA imposing administrative sanctions or remedial measures set out in paragraph 3 of this Article shall be properly reasoned, shall be notified to the person concerned and shall be subject to a right of appeal in accordance with Article 25 of Regulation (EU) No 1060/2009.

Added6. Any decision referred in paragraph 5 of this Article shall be communicated to the competent authorities designated under Article 29 for the person concerned and to the other ESAs. The EBA or ESMA shall make public any such decision on its website within 10 working days from the date on which it was adopted subject to Article 37(2), (3) and (4).’;

Added(18) Article 36 is amended as follows:

Added(a) paragraph 2 is deleted

Added(b) paragraph 3, is replaced by the following:

Added‘A specific securitisation sub-committee shall be established within the framework of the Joint Committee of the European Supervisory Authorities, within which competent authorities shall closely cooperate, in order to carry out their duties pursuant to Articles 30 to 34. The securitisation sub-committee shall be led by the EBA with the cooperation of ESMA, ▌ EIOPA and ESRB. The EBA shall provide the secretariat and a vice-chairperson to the securitisation sub-committee on a permanent basis. The securitisation sub-committee shall foster supervisory convergence to ensure common supervisory practices. The members of the securitisation sub-committee, under the stewardship of the EBA, shall closely coordinate their supervisory actions in order to identify and remedy infringements of this Regulation, develop and promote best practices, facilitate collaboration, foster consistentapplication of law and provide cross-jurisdictional assessments in the event of any disagreements. The securitisation sub-committee shall regularly monitor the state of the market and the application of this Regulation.’;

Added(c) the following paragraphs 3a and 3b are inserted:

Added‘3a. The securitisation sub-committee referred to in paragraph 3 shall by [12 months after adoption] develop guidelines to establish common supervisory procedures.

Added3b. Where more than one competent authority is notified under Article 7(1), the competent authority responsible for the supervision of the originator or, if there are several originators, the competent authority supervising the originator that contributes the highest proportion of underlying exposures to the securitisation, shall be the lead supervisor for that specific securitisation. The lead supervisor shall coordinate actions and avoid divergences of application of this Regulation for transactions involving sell-side entities under the remit of competent authorities from more than one Member State. ▌ Competent authorities shall delegate the exercise of some or all of the tasks and powers referred to in this Regulation to the lead supervisor.’;

Added(ca) paragraphs 4 and 5 are replaced by the following:

Added‘4. Where a competent authority finds that one or more of the requirements under Articles 6 to 27 have been infringed or has reason to believe so, it shall inform the competent authority of the entity or entities suspected of such infringement, or the EBA, of its findings in a sufficiently detailed manner. The competent authorities responsible for supervision of compliance with Articles 6 to 17 shall closely coordinate their supervision in order to ensure consistent decisions.

Added5. Where the infringement referred to in paragraph 4 of this Article concerns, in particular, an incorrect or misleading notification pursuant to Article 27(1), the competent authority finding that infringement shall, without delay, notify the EBA of its findings.’;

Added(d) in paragraph 6, the first and second subparagraphs are replaced by the following:

Added‘Upon receipt of the information referred to in paragraph 4, the competent authority of the entity suspected of the infringement shall take within 15 working days any action necessary to address the infringement identified and notify the other competent authorities involved, in particular those of the originator, sponsor and SSPE, and the competent authorities of the holder of a securitisation position, where known. A competent authority that disagrees with another competent authority regarding the procedure or content of the action or inaction or that other competent authority shall notify all other competent authorities involved about its disagreement without undue delay. Where that disagreement is not resolved within three months of the date on which all competent authorities involved were notified, the matter shall be referred to the EBA in accordance with Article 19 and, where applicable, Article 20 of Regulation (EU) No 1093/2010. The conciliation period referred to in Article 19(2) of Regulation (EU) No 1093/2010 shall be one month.

AddedWhere the competent authorities concerned fail to reach an agreement within the conciliation phase referred to in the first subparagraph, the EBA shall take the decision referred to in Article 19(3) of Regulation (EU) No 1093/2010 within one month. During the procedure set out in this Article, a securitisation appearing on the list maintained by ESMA pursuant to Article 27 of this Regulation shall continue to be considered an STS pursuant to Chapter 4 of this Regulation and shall be kept on that list.’;