Activities of Bernd LUCKE related to 2017/0359(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council on the prudential requirements of investment firms and amending Regulations (EU) No 575/2013, (EU) No 600/2014 and (EU) No 1093/2010 PDF (868 KB) DOC (136 KB)
Amendments (44)
Amendment 40 #
Proposal for a regulation
Recital 16
Recital 16
(16) Investment firms should be considered small and non-interconnected for the purposes of the specific prudential requirements for investment firms where they do not conduct investment services which carry a high risk for clients,if size and kind of their activities markets or themselves and whose size means they are less unlikely to cause widespread negative impacts for clients and markets in case risks inherent in their business materialise or in case they fail. Accordingly, small and non-interconnected investment firms should be defined as those that do not deal on own account or incur risk from trading financial instruments, have nolimited client assets or money under their control, have assets under both discretionary portfolio management and non-discretionary (advisory) arrangements of less than EUR 1.2 billion, handle fewer than EUR 100 million per day of client orders in cash trades or EUR 1 billion per day in derivatives, and have a balance sheet smaller than EUR 100 million and total gross annual revenues from the performance of their investment services of less than EUR 30 million.
Amendment 43 #
Proposal for a regulation
Recital 19
Recital 19
(19) All investment firms should calculate their capital requirement with reference to a set of K-factors which capture Risk-To-Customer (‘RtC’), Risk- to-Market (‘RtM’) and Risk-to-Firm (‘RtF’). The K-factors under RtC capture client assets under management and ongoing advice (K-AUM), assets safeguarded and administered (K- ASA), client money held (K-CMH), and customer orders handled (K-COH).
Amendment 49 #
Proposal for a regulation
Recital 23
Recital 23
(23) The K-factors under RtC are proxies covering the business areas of investment firms from which harm to clients can conceivably be generated in case of problems. K-AUM captures the risk of harm to clients from an incorrectthe discretionary management of customer portfolios or poor execution and provides reassurance and customer benefits in terms of the continuity of service of ongoing portfolio management and advice. K-ASA captures the risk of safeguarding and administering customer assets, and ensures that investment firms hold capital in proportion to such balances, regardless of whether they are on its own balance sheet or segregated in other accounts. K-CMH captures the risk of potential for harm where an investment firm holds the money of its customers, regardless of whether they are on its own balance sheet or segregated in other accounts. K-COH captures the potential risk to clients of a firm which executes its orders (in the name of the client, and not in the name of the firm itself), for example as part of execution-only services to clients or when a firm is part of a chain for client orders.
Amendment 56 #
Proposal for a regulation
Recital 36
Recital 36
(36) To ensure investor protection as well as the integrity and the stability of financial markets in the Union, the Commission, when adopting an equivalence decision, should take into account the potential risks posed by the services and the activities that firms from thatcentral role that the Union plays in worldwide financial markets and ensure that the application of third- country requirements does not prevent Union investors and issuers from investing in or obtaining funding from third countries or third-country investors and issuers from investing, raising capital or obtaining other financial services in Union markets unless that is necessary for objective and evidence-based prudential reasons, including potential risks posed by the services and the activities which a third-country firm could carry out in the Union following that decision. Their systemic importance should be considered based on criteria such as the likely scale and scope of service provision Commission should initiate the equivalence assessment on its own initiative. The equivalence assessment should be outcome-based; it should assess to what extent the respective third-country regulatory and superformance of activities by firms from the third country concerned. For the same purpose, the Commission may consider appropriate to take into account whether the third county is identified as a non- cooperative jurisdiction for tax purposes under the relevant Union policy or as a high-risk third country pursuant to Article 9(2) of Directive (EU) 2015/84932 . visory framework achieves similar and adequate regulatory effects and to what extent it meets the same objectives as Union law. The Commission may delay or discard any initiation of equivalence assessments if the third county is identified as a non- cooperative jurisdiction for tax purposes under the relevant Union policy or as a high-risk third country pursuant to Article 9(2) of Directive (EU) 2015/84932. When initiating equivalence assessments, the Commission should be able to prioritise among third-country jurisdictions taking into account the materiality of the equivalence finding to Union firms and clients, the existence of supervisory and cooperation agreements between the third country and the Union or its Member States, the existence of an effective equivalent system for the recognition of investment firms authorised under foreign regimes as well as the interest and willingness of the third country to engage in the equivalence assessment process. The Commission should monitor any significant changes to the regulatory and supervisory framework of the third country and review the equivalence decisions where appropriate. __________________ 32 Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).
Amendment 59 #
Proposal for a regulation
Article 4 – paragraph 1 – point 25
Article 4 – paragraph 1 – point 25
(25) ‘K-AUM’ or ‘K-factor in relation to assets under management (AUM)’ means the capital requirement relative to the value of assets that an investment firm manages for its clients under both discretionary portfolio management and non- discretionary arrangements constituting investment advice, including assets delegated to another undertaking and excluding assets that another undertaking has delegated to the investment firm;
Amendment 84 #
Proposal for a regulation
Article 11 – paragraph 2
Article 11 – paragraph 2
2. ABy way of derogation from paragraph 1 an investment firm that meets the conditions set out in Article 12(1) shall at all times only have capital which amounts to the highest of the amounts specified in points (a) and (b) of paragraph 1.
Amendment 85 #
Proposal for a regulation
Article 11 – paragraph 3
Article 11 – paragraph 3
3. Where competent authorities consider that there has been an exceptional material change in the business activities of an investment firm, they may require the investment firm to be subject to a different capital requirement referred to in this Article, in accordance with Title IV, Chapter 2, section IV of Directive (EU) ---- /--[IFD].
Amendment 91 #
Proposal for a regulation
Article 12 – paragraph 1 – subparagraph 1 – point c
Article 12 – paragraph 1 – subparagraph 1 – point c
(c) ASA (or assets safeguarded and administered) calculated in accordance with Article 19 is zeroEUR [XXX] million;
Amendment 94 #
Proposal for a regulation
Article 12 – paragraph 1 – subparagraph 1 – point d
Article 12 – paragraph 1 – subparagraph 1 – point d
(d) CMH (or client money held) calculated in accordance with Article 18 is zeroEUR [XXX] million;
Amendment 100 #
Proposal for a regulation
Article 12 – paragraph 1 – subparagraph 1 – point e
Article 12 – paragraph 1 – subparagraph 1 – point e
(e) DTF (daily trading flow) calculated in accordance with Article 32 is zero;EUR [xxx] million.
Amendment 101 #
Proposal for a regulation
Article 12 – paragraph 1 – subparagraph 1 – point f
Article 12 – paragraph 1 – subparagraph 1 – point f
(f) NPR (net position risk) or CMG (clearing member guarantee) calculated in accordance with Articles 22 and 23 is zero;EUR [xxx] million.
Amendment 104 #
Proposal for a regulation
Article 12 – paragraph 1 – subparagraph 1 – point g
Article 12 – paragraph 1 – subparagraph 1 – point g
(g) TCD (trading counterparty default) calculated in accordance with Article 26 is zero;EUR [xxx] million.
Amendment 106 #
Proposal for a regulation
Article 12 – paragraph 1 a (new)
Article 12 – paragraph 1 a (new)
1a. ESMA shall be empowered to adopt implementing acts adjusting the thresholds in paragraph 1(c), (d), (e), (f) and (g). ESMA shall make use of this power whenever the size of the thresholds may constitute a barrier to market entry or a threat to financial stability.
Amendment 107 #
Proposal for a regulation
Article 12 – paragraph 2 – subparagraph 3
Article 12 – paragraph 2 – subparagraph 3
Where an investment firm no longer meets all the conditions set out in paragraph 1, it shall not be considered a small and non- interconnected investment firm with immediate effectafter a period of 3 months, calculated from the date when the threshold has been exceeded.
Amendment 108 #
Proposal for a regulation
Article 12 – paragraph 2 a (new)
Article 12 – paragraph 2 a (new)
2a. For the purposes of points (a) to (d) of paragraph 1, an investment firm shall not be considered to be a small and non-interconnected investment firm in the event that the investment firm exceeds, on an average rolling basis, the applicable threshold during the preceding 12 month period.
Amendment 109 #
Proposal for a regulation
Article 12 – paragraph 2 b (new)
Article 12 – paragraph 2 b (new)
2b. For the purposes of points (e), (f) and (g) of paragraph 1, an investment firm shall not be considered to be a small and non-interconnected investment firm after a period of three months from the date on which the threshold was not met.
Amendment 111 #
Proposal for a regulation
Article 12 – paragraph 4
Article 12 – paragraph 4
4. Where an investment firm which has not met all of the conditions set out in paragraph 1 subsequently meets those conditions, it shall be considered, subject to approval by the competent authority, a small and non-interconnected investment firm after a period of 63 months from the date when those conditions are met.
Amendment 113 #
Proposal for a regulation
Article 13 – paragraph 2
Article 13 – paragraph 2
2. Where the competent authority considers that there has been an exceptional material change in the activity of an investment firm, the competent authority may adjust the amount of capital referred to in paragraph 1.
Amendment 114 #
Proposal for a regulation
Article 13 – paragraph 4 – subparagraph 1
Article 13 – paragraph 4 – subparagraph 1
EBSMA, in consultation with ESMBA, and taking into account Commission Delegated Regulation (EU) 2015/488 shall develop draft regulatory technical standards to further specify the calculation of the requirement referred to in paragraph 1.
Amendment 116 #
Proposal for a regulation
Article 13 – paragraph 4 – subparagraph 2
Article 13 – paragraph 4 – subparagraph 2
EBSMA shall submit those draft regulatory technical standards to the Commission by [nine month from the date of entry into force of this Regulation].
Amendment 117 #
Proposal for a regulation
Article 15 – paragraph 2 – table 1 – column K-Factors – first cell
Article 15 – paragraph 2 – table 1 – column K-Factors – first cell
Assets under management under both discretionary portfolio management and non-discretionary (advisory) arrangements
Amendment 122 #
Proposal for a regulation
Article 15 – paragraph 2 a (new)
Article 15 – paragraph 2 a (new)
2a. ESMA shall be empowered to adopt implementing acts adjusting the K- DTF coefficients in Table 1. ESMA shall make use of this power if in situations of market stress the K-DTF requirements seem overly restrictive and detrimental to financial stability.
Amendment 123 #
Proposal for a regulation
Article 15 – paragraph 4
Article 15 – paragraph 4
4. Where competent authorities consider that there has been an exceptional material change in the business activities of an investment firm that impacts the amount of a relevant K-factor, they may adjust the corresponding amount in accordance with Article 36(2)(a) of Directive (EU) ----/-- [IFD].
Amendment 131 #
Proposal for a regulation
Article 18 – paragraph 1 – subparagraph 1
Article 18 – paragraph 1 – subparagraph 1
For the purposes of calculating K-CMH, CMH shall be the rolling average of the value of total daily client money held, measured at the end of each business day for the previous 312 calendar months.
Amendment 132 #
Proposal for a regulation
Article 18 – paragraph 1 – subparagraph 2
Article 18 – paragraph 1 – subparagraph 2
CMH shall be the average or simple arithmetic mean of the daily measurements in the 312 calendar months.
Amendment 137 #
Proposal for a regulation
Article 18 – paragraph 2 – introductory part
Article 18 – paragraph 2 – introductory part
2. Where an investment firm has been holding client money for less than 312 months, it may use business projections to calculate K-CMH, subject to the following cumulative requirements:
Amendment 145 #
Proposal for a regulation
Article 21 – paragraph 1
Article 21 – paragraph 1
The RtM K-factor requirement for the trading book positions of an investment firm dealing on own account, whether for itself or on behalf of a client shall be the highlower of K-NPR calculated in accordance with Article 22 or K-CMG calculated in accordance with Article 23.
Amendment 153 #
Proposal for a regulation
Article 22 – paragraph 1 – subparagraph 1 – point a
Article 22 – paragraph 1 – subparagraph 1 – point a
(a) the [simplified standardised] approach set out in Chapters 2 to 4 of Title IV of Part Three of Regulation (EU) No 575/2013 where the investment firm's trading book business is equal to or less than EUR 300 million;
Amendment 155 #
Proposal for a regulation
Article 22 – paragraph 1 – subparagraph 1 – point b
Article 22 – paragraph 1 – subparagraph 1 – point b
Amendment 158 #
Proposal for a regulation
Article 23 – paragraph 1 – subparagraph 1 – introductory part
Article 23 – paragraph 1 – subparagraph 1 – introductory part
Amendment 164 #
Proposal for a regulation
Article 23 – paragraph 1 – subparagraph 1 – point d
Article 23 – paragraph 1 – subparagraph 1 – point d
Amendment 165 #
Proposal for a regulation
Article 23 – paragraph 1 – subparagraph 2
Article 23 – paragraph 1 – subparagraph 2
If conditions set out in points (a) to (d) are satisfied, K-CMG shall be the highest total amount of initial margin posted to the clearing member by the investment firm over the preceding 3 months.
Amendment 166 #
Proposal for a regulation
Article 23 – paragraph 2 – subparagraph 1
Article 23 – paragraph 2 – subparagraph 1
EBSMA, in consultation with ESMBA, shall develop draft regulatory technical standards to specify the calculation of the amount of the initial margin referred to in paragraph 1(c).
Amendment 168 #
Proposal for a regulation
Article 23 – paragraph 2 – subparagraph 2
Article 23 – paragraph 2 – subparagraph 2
The EBSMA shall submit those draft regulatory technical standards to the Commission by [nine months from the date of entry into force of this Regulation].
Amendment 175 #
Proposal for a regulation
Article 25 – paragraph 1 – point a – point i
Article 25 – paragraph 1 – point a – point i
(i) OTC derivatives traded with central governments and central banks of Member States; not subject to an assistance program of the European Stability Mechanism or a comparable institution.
Amendment 176 #
Proposal for a regulation
Article 25 – paragraph 1 – point a – point ii
Article 25 – paragraph 1 – point a – point ii
(ii) OTC derivatives cleared through a qualifying central counterparty (QCCP) or through a clearing bank which is a clearing member of a QCCP;
Amendment 178 #
Proposal for a regulation
Article 26 – paragraph 1 – introductory part
Article 26 – paragraph 1 – introductory part
For the purposes of K-TCD, the capital requirement shall be determined by the following formula: Capital requirement = Exposure value * RF where RF is a risk factor of 1.6% defined uniformly across counterparties.
Amendment 217 #
Proposal for a regulation
Article 40 – paragraph 2 – point d
Article 40 – paragraph 2 – point d
(d) exposures to recognised exchanges as defined in Article 4(1)(72) of Regulation (EU) 575/2013, to qualifying central counterparties (QCCP) or to clearing members.
Amendment 220 #
Proposal for a regulation
Article 42 – paragraph 1 – subparagraph 2 – point b
Article 42 – paragraph 1 – subparagraph 2 – point b
(b) unencumbered cash, including the investment firm’s unencumbered cash pooled at group level.
Amendment 228 #
Proposal for a regulation
Article 47 – paragraph 1 – point b
Article 47 – paragraph 1 – point b
Amendment 232 #
Proposal for a regulation
Article 51
Article 51
Amendment 264 #
Proposal for a regulation
Article 59 – paragraph 1 – point f a (new)
Article 59 – paragraph 1 – point f a (new)
(fa) the provisions set out in Article 46 and 47 of Regulation (EU) No 600/2014 and their alignment with a consistent framework for equivalence in financial services.
Amendment 318 #
Proposal for a regulation
Article 61 – paragraph 1 – point 2 – point a
Article 61 – paragraph 1 – point 2 – point a
Regulation (EU) No 600/2014
Article 47 – paragraph 1 – subparagraph 2
Article 47 – paragraph 1 – subparagraph 2
Where the services provided and the activities performed by third-country firms in the Union following the adoption of the decision referred to in the first subparagraph are likely to be of systemic importance for the Union, the legally binding prudential and business conduct requirements referred to in the first subparagraph may only be considered to have equivalent effect to the requirements set out in the acts referred to in that subparagraph after a detailed and granular assessment. For these purposes of this assessment, the Commission shall also assess and take into account the supervisory convergence between the third country concerned and the Union.
Amendment 324 #
Proposal for a regulation
Article 61 – paragraph 1 – point 2 – point c
Article 61 – paragraph 1 – point 2 – point c
Regulation (EU) No 600/2014
Article 47 – paragraph 5
Article 47 – paragraph 5
5. ESMA shall monitor the regulatory and supervisory developments, and the enforcement practices and other relevant market developments in third countries for which equivalence decisions have been adopted by the Commission pursuant to paragraph 1 in order to verify whether the conditions on the basis of which those decisions have been taken are still fulfilled. The Authority shall submit a confidential report on its findings to the Commission, the European Parliament and the Council on an annual basis.’’.