59 Amendments of Fabio DE MASI related to 2014/0020(COD)
Amendment 99 #
Proposal for a regulation
Recital 2 a (new)
Recital 2 a (new)
(2 a) The current economic crisis was largely caused by the financial industry where many actors have become too-big- to fail and had to be bailed-out with public funds. In contrast to any market- economy logic, losses were socialised and profits privatised. It needs to be recalled that the key role of financial institutions is to channel savings into productive investments. With the invention of various toxic financial instruments and dubious business practices, which for example set exorbitantly high profit targets, this role has been squeezed out to the benefit of short-term profit maximisation with limited added value for society. It is therefore imperative to reduce the financial sector to its core functions. Hence, institutions that have reached a size and level of interconnectedness which is likely to pose a systemic threat to the functioning of the economies of single Member States or the Union as a whole should be separated as this will in the long term lead to more balanced and sustainable growth.
Amendment 100 #
Proposal for a regulation
Recital 2 b (new)
Recital 2 b (new)
(2 b) Financial market stability should be seen in the context of overall sustainable and balanced economic growth. It cannot be a stand-alone objective but needs to be seen in a broader macro-economic perspective.
Amendment 117 #
Proposal for a regulation
Recital 12
Recital 12
(12) This Regulation intends to reducminimise excessive risk taking and rapid balance sheet growth, difficult resolution, difficult monitoring, conflicts of interest, competition distortions, including any implicit or explicit public subsidies for large, profit-oriented private institutions and misallocation of capital. It also intends to shield institutions carrying out activities that deserve a public safety net from losses incurred as a result of other activities. Necessary rules should therefore contribute to refocusing banks on their core relationship-oriented role of serving the real economy, and avoid that bank capital be excessively allocated to trading at the expense of lending to the non-financial economy.
Amendment 123 #
Proposal for a regulation
Recital 13
Recital 13
(13) This Regulation will apply only to credit institutions and groups with trading activities that meet thresholds set out in the Regulation. This is in line with the explicit focus on the limitedfocuses on the subset of the largest and most complex credit institutions and groups that in spite of other legislative acts remain too-big-to-fail, too- big-to-save and too complex to manage, supervise and resolve. The provisions of this Regulation should accordingly only apply to those Union credit institutions and groups that either are deemed of global systemic importance or exceed certain relative and absolute accounting-based thresholds in terms of trading activity or absolute size. Member States or the competent authorities may decide to impose similar measures also on smaller credit institutions which may equally pose significant financial risks to the Union or parts of it.
Amendment 130 #
Proposal for a regulation
Recital 15
Recital 15
(15) Credit institutions and entities belonging to the same group, should be prohibited from buying and selling financial instruments and commodities for their own account, as this activity has limited or no added value for the public good and is inherently risky. Moreover, they should not be exposed or connected through investments, guarantees or lending to funds or other investment vehicles conducting such business.
Amendment 135 #
Proposal for a regulation
Recital 16
Recital 16
(16) It is difficult to distinguish proprietary trading from market making. To overcome this difficulty, the prohibition of proprietary trading should be limited to desks, units, divisions or individual traders specifically dedicated to proprietary trading. Banks should not be able to circumvent the prohibition by running or benefiting from investments in non-bank entities engaging in proprietary tradingMarket making often contains hidden proprietary trading elements and has thereby contributed to the build-up of systemic risks in the financial sector. It is therefore essential to define proprietary trading explicitly through a profit motif on own account and a lack of connection to actual or anticipated client activity.
Amendment 145 #
Proposal for a regulation
Recital 20
Recital 20
(20) Remuneration policies which encourage excessive risk-taking can undermine sound and effective risk management of banks, contribute to the TBTF problem and significantly increase the likelihood of banks acting against societal interests. By complementing relevant existing Union law in this area, remuneration provisions should contribute to preventing circumvention of the prohibition of proprietary trading and excessive speculation. Similarly, it should curtail any residual or hidden proprietary trading activity by core credit institutions when carrying out prudent risk management.
Amendment 151 #
Proposal for a regulation
Recital 22
Recital 22
(22) Other than proprietary trading, large credit institutions engage in numerous other trading activities, such as market making, issuance, investment and sponsorship activity linked to risky securitisation, or the structuring, arranging, or execution of complex derivative transactions. These trading activities are often related to client activity but may nevertheless give rise to concerns. Considering, however, the potentially useful nature of these activities they should not be subject to a direct prohibition. Instead, such activities should remain subject to an ex post assessment by the competent authority and, potentially, to a requirement to be separated from the rest of the groups’ activitiesbe transferred to an economically, legally and organisationally separate trading entity for all entities falling under the scope of this Regulation.
Amendment 154 #
Proposal for a regulation
Recital 23
Recital 23
Amendment 161 #
Proposal for a regulation
Recital 24
Recital 24
(24) There are particular concerns in relation to market making. The resolvability of a bank may be impeded by the presence of trading and inventory within a large banking group, as individual trading positions are treated the same way in a resolution process, whether they result from client activity driven market making or from speculation. Additionally, market makers are interconnected with other large banking groups. Furthermore, market makers can be exposed to substantial counterparty risk and the concrete functioning of market making can vary in relation to different financial instruments and market models. Therefore, particular attention to those activities should be made during the assessment of the competent authorcarried out in a separated trading entity.
Amendment 171 #
Proposal for a regulation
Recital 26
Recital 26
(26) To ensure an effective separation in legal, economic, governance and operational terms, both core credit institutions and trading entities should meet capital, liquidity, and large exposure rules on a functional sub-group basis. They should have strong independent governance and separate management bodies.
Amendment 175 #
Proposal for a regulation
Recital 28
Recital 28
(28) Large exposure limits aim at protecting credit institutions against the risk of incurring losses because of an excessive concentration on one client or a group of connected clients. Applying those restrictions between the separated parts within the credit institution or group, as well as between the core credit institution and external entities carrying out trading activities are an integral part of this Regulation. However, irrespective of individual exposure limits, aggregate large exposures can still be substantial. The individual limits should therefore be complemented by an aggregate large exposure limit. In order to limit the application of the public safety net to the activities subject to separation and to clearly distinguish the activities of a trading entity from the core credit institution, the trading entities should be prohibited from taking deposits eligible for deposit insurance. This prohibition should not prevent the exchange of collateral strictly relating to their trading activities. However, in order not to close down an additional source of credit, the trading entity should be allowed to extend credit to all clients. Furthermore, whereas the trading entity may need to provide wholesale payment, clearing and settlement services, it should not be involved in retail payment services.
Amendment 188 #
Proposal for a regulation
Recital 34
Recital 34
(34) Separation entails changes to the legal, organisation and operational structure of affected banking groups, all of which generate costs. In order to limit the risk of costs being passed on to clients and grant the credit institutions the time necessary to execute a separation decision in an orderly fashion, separation should not be applicable immediately upon entry into force of the Regulation but apply as of [OP please enter the exact date 182 months from the date of publication of this Regulation].
Amendment 193 #
Proposal for a regulation
Recital 38
Recital 38
(38) In order to specify the requirements set out in this Regulation, the power to adopt acts in accordance with Article 290 of the TFEU should be delegated to the Commission in respect of the following non-essential elements: expanding the type of government bonds that should not prohibited under Article 6 and which competent authorities do not have to review or consider for separation; setting the relevant limits and conditions for when a competent authority shall presume that certain trading activities must be separated; expanding the list of instruments that are allowed for the management of a credit institution's own risk; expanding the list of instruments that a credit institution may transact in to manage clients' risks; calculating the limit above which derivatives may not be sold nor recorded on the balance sheet of a core credit institution; large exposures and the extent of recognition of credit risk mitigation techniques; amending the components of the concept of ‘trading activities’ used for establishing the conditions of application of Chapter II and Chapter III of this Regulation; specifying the types of securitisations that do not pose a threat to the financial stability of a core credit institution or to parts of or the whole of the Union financial system; the criteria for assessing the equivalence of third country legal and supervisory frameworks. It is of particular importance that the Commission carries out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.
Amendment 195 #
Proposal for a regulation
Recital 41
Recital 41
Amendment 205 #
Proposal for a regulation
Article 1 – paragraph 1 – point a
Article 1 – paragraph 1 – point a
(a) to reducminimise excessive risk taking within the credit institution;
Amendment 210 #
Proposal for a regulation
Article 1 – paragraph 1 – point a a (new)
Article 1 – paragraph 1 – point a a (new)
(a a) to significantly reduce excessive speculation with financial products that have limited added value for financing the real economy and where risks exceed their economic benefits;
Amendment 217 #
Proposal for a regulation
Article 1 – paragraph 1 – point d
Article 1 – paragraph 1 – point d
(d) to contribute to undistorted conditions of competition for all credit institutions within the internal market; and to rule out explicit or implicit public subsidies for profit-oriented private credit institutions;
Amendment 220 #
Proposal for a regulation
Article 1 – paragraph 1 – point e
Article 1 – paragraph 1 – point e
(e) to reduce interconnectedness within the financial sector leading to systemic risk; and to insulate core credit services from the risks associated with trading activity;
Amendment 222 #
Proposal for a regulation
Article 1 – paragraph 1 – point g
Article 1 – paragraph 1 – point g
(g) to facilitate the orderly resolution and recovery of the group without public bail- outs.
Amendment 231 #
Proposal for a regulation
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
(a) the prohibition of proprietary trading and of exposures to financial institutions that engage in proprietary trading;
Amendment 236 #
Proposal for a regulation
Article 2 – paragraph 1 – point b
Article 2 – paragraph 1 – point b
(b) the mandatory separation of certain trading activities from core credit activities for entities falling under the scope pursuant to Article 3.
Amendment 248 #
Proposal for a regulation
Article 3 – paragraph 1 – point b – introductory part
Article 3 – paragraph 1 – point b – introductory part
(b) any of the following entities that for a period of three cons(i - iii) that has eligible deposits as defined in Direcutive years has total assets amounting at least to EUR 30 billion and has trading activities amounting at least to2014/49/EU amounting to more than 5% of its total assets and that satisfies at least one of the following criteria: - the total value of its assets exceeds EUR 30 billion; - the ratio of its total assets over the GDP of the participating Member State of establishment exceeds 20 %, unless the total value of its assets is below EUR 705 billion or 10 per cent of its total assets:; - the ratio of its trading activities over its total assets exceeds 20 % and the value of its total assets exceeds EUR 20 billion.
Amendment 273 #
Proposal for a regulation
Article 5 – paragraph 1 – point 4
Article 5 – paragraph 1 – point 4
4. ‘proprietary trading’ means using own capital or borrowed money to take positions in any type of transaction to purchase, sell or otherwise acquire or dispose of any financial instrument or commodities for the sole purpose of making a profit for own account, and without any connection to actual or anticipated client activity or for the purpose of hedging the entity’s risk as result of actual or anticipated client activity, through the use of desks, units, divisions or individual traders specifically dedicated to such position taking and profit making, including through dedicated web-basedincluding any such transaction undertaken with the aim of making profit, irrespective of whether such profit would be realised in the short term or in the longer term, or is in fact realised. Unless an institution proves to the satisfaction of the competent authority that an activity is not covered by this definition, it shall be considered as proprietary trading platforms;
Amendment 295 #
Proposal for a regulation
Article 5 – paragraph 1 – point 22 a (new)
Article 5 – paragraph 1 – point 22 a (new)
22 a. "real economy" means all activities that contribute in a sustainable manner to the provision of goods and services;
Amendment 298 #
Proposal for a regulation
Article 5 – paragraph 1 – point 22 b (new)
Article 5 – paragraph 1 – point 22 b (new)
22 b. "excessive speculation" means any activity which causes or is intended to cause sudden or unreasonable fluctuations or unwarranted changes in the price of the traded financial instrument and has potential negative consequences for the real economy;
Amendment 302 #
Proposal for a regulation
Article 6 – title
Article 6 – title
Prohibition of certain trading activities
Amendment 308 #
Proposal for a regulation
Article 6 – paragraph 1 – point b – introductory part
Article 6 – paragraph 1 – point b – introductory part
(b) with its own capital or borrowed money and for the sole purpose of making a profit for own account:
Amendment 322 #
Proposal for a regulation
Article 6 – paragraph 1 – point b – point iii a (new)
Article 6 – paragraph 1 – point b – point iii a (new)
(iii a) engage in lending or issuing of guarantees to AIFs;
Amendment 324 #
Proposal for a regulation
Article 6 – paragraph 1 – point b – point iii b (new)
Article 6 – paragraph 1 – point b – point iii b (new)
(iii b) engage in excessive speculation.
Amendment 361 #
Proposal for a regulation
Chapter 3 – title
Chapter 3 – title
Separation of certain tradingtrading and core credit activities
Amendment 365 #
Proposal for a regulation
Article 8 – title
Article 8 – title
Amendment 369 #
Proposal for a regulation
Article 8 – paragraph 1 – introductory part
Article 8 – paragraph 1 – introductory part
1. FCor the purposes of this Chapter, trading activities shall includee credit institutions shall not conduct activities other than:
Amendment 386 #
Proposal for a regulation
Article 8 – paragraph 1 – point i a (new)
Article 8 – paragraph 1 – point i a (new)
(i a) at clients' request offering advice on and marketing third-party financial instruments without acting as a principal.
Amendment 397 #
Proposal for a regulation
Article 8 – paragraph 1 a (new)
Article 8 – paragraph 1 a (new)
1 a. In addition to the activities permitted under paragraph 1, core credit institutions may carry out certain trading activities as detailed below provided they can demonstrate to the competent authority that they are solely used for the purpose of prudently managing capital, liquidity and funding. (a) the use of interest rate derivatives, foreign exchange derivatives and credit derivatives eligible for central counterparty clearing to hedge its overall balance sheet risk where the hedging activity is designed to reduce, and demonstrably reduces or significantly mitigates, specific, identifiable risks of individual or aggregated positions of the core credit institution; (b) purchasing and disposing of high quality liquid assets that at least meet the standards set out in Article 416 of the Regulation (EU) No 575/2013 for the purpose of managing the cash and liquidity position of the CCI; (c) lending to and borrowing in the interbank markets for the purpose of managing the cash and liquidity position of the CCI subject to the conditions in Article 15 paragraph 1; (d) issuance and repurchase of securities for the purpose of meeting the capital management needs of the CCIs core activities. This may include securitisation not considered to pose a threat to the financial stability of the CCI or to parts of or the whole of the Union financial system.
Amendment 400 #
Proposal for a regulation
Article 8 – paragraph 1 b (new)
Article 8 – paragraph 1 b (new)
1 b. Without prejudice to the remuneration rules laid down in Directive 2013/36/EU, the remuneration policy applicable to staff of the core credit institution engaged in hedging activities shall: (a) aim at preventing any residual or hidden proprietary trading activities, whether disguised as risk management or otherwise; (b) reflect the legitimate hedging objectives of the core credit institution as a whole and ensure that remuneration awarded is not directly determined by reference to the profits generated by such activities but takes account of the overall effectiveness of the activities in reducing or mitigating risk. The management body shall ensure that the remuneration policy of the core credit institution is in line with the provisions set out in the first subparagraph, acting on the advice of the risk committee, where such a committee is established in accordance with Article 76(3) of Directive 2013/36/EU.
Amendment 408 #
Proposal for a regulation
Article 8 – paragraph 3 a (new)
Article 8 – paragraph 3 a (new)
3 a. The Commission shall by, [OP insert the correct date 6 months from publication of this Regulation] adopt delegated acts in accordance with Article 35 to specify which type of securitisation is not considered to pose a threat to the financial stability of the core credit institution or to the Union financial system as a whole with regard to each of the following aspects: (i) the structural features, such as the embedded maturity transformation and simplicity of the structure; (ii) the quality of the underlying assets and related collateral characteristics; (iii) the listing and transparency features of the securitisation and its underlying assets; (iv) the robustness and quality of the underwriting processes.
Amendment 409 #
Proposal for a regulation
Article 8 – paragraph 3 b (new)
Article 8 – paragraph 3 b (new)
3 b. The Commission shall, by [OP insert the correct date 6 months from publication of this Regulation] adopt delegated acts in accordance with Article 35 to specify the criteria for determining that the hedging activity referred to in paragraph 1 a (new) is designed to reduce, and demonstrably reduces or significantly mitigates, specific, identifiable risks of individual or aggregated positions of the core credit institution.
Amendment 410 #
Proposal for a regulation
Article 8 a (new)
Article 8 a (new)
Article 8 a Trading activities 1. All trading activities not prohibited by Article 6 and not permitted for a core credit institution in Article 8 paragraph 1 to 5 shall be transferred to an economically, legally and operationally separate institution ("trading entity"). 2. Trading entities shall not belong to the same group as core credit institutions. All contracts and other transactions entered into between core credit institutions and trading entities shall be done at arm's length. 3. Core credit institutions shall not hold capital instruments or voting rights in trading entities and vice versa. Notwithstanding the first subparagraph, the competent authority may decide to allow core credit institutions that meet the requirements set out in Article 49(3)(a) or (b) of Regulation (EU) No 575/2013 to hold capital instruments or voting rights in a trading entity where the competent authority considers that holding such capital instruments or voting rights is indispensable for the functioning of the group and that the core credit institution has taken sufficient measures in order to appropriately mitigate the relevant risks. A core credit institution, which is neither a central nor a regional credit institution, shall not, in any case, be allowed to directly hold capital instruments or voting rights in any trading entity. Prior to adopting a decision in accordance with this paragraph, the competent authority shall consult EBA. The competent authority shall notify its decision to EBA. EBA shall publish a list of those institutions to which this paragraph has been applied. 4. In accordance with the applicable national law, the name or the designation of trading entities and core credit institutions shall be such that the public can easily identify which entity is a trading entity and which entity is a core credit institution. 5. After separation, trading entities shall comply with the obligations laid down in Parts Two, Three and Four and Parts Six, Seven and Eight of Regulation (EU) No 575/2013 and in Title VII of Directive 2013/36/EU. 6. Notwithstanding the criteria laid out in Article 3, trading entities shall in any case comply with the provisions of Article 6 of this Regulation.
Amendment 411 #
Proposal for a regulation
Article 9
Article 9
Amendment 487 #
Proposal for a regulation
Article 10
Article 10
Amendment 561 #
Proposal for a regulation
Article 11
Article 11
Amendment 584 #
Proposal for a regulation
Article 12
Article 12
[…] deleted
Amendment 609 #
Proposal for a regulation
Article 13
Article 13
Amendment 641 #
Proposal for a regulation
Article 14
Article 14
Amendment 656 #
Proposal for a regulation
Article 18 – paragraph 1 – subparagraph 1
Article 18 – paragraph 1 – subparagraph 1
Amendment 657 #
Proposal for a regulation
Article 18 – paragraph 1 – subparagraph 2
Article 18 – paragraph 1 – subparagraph 2
Amendment 659 #
Proposal for a regulation
Article 18 – paragraph 2 – subparagraph 2 – point a
Article 18 – paragraph 2 – subparagraph 2 – point a
(a) specification of assets and activities that will be separated from the core credit institution in line with Articles 8 and 8 a (new);
Amendment 660 #
Proposal for a regulation
Article 18 – paragraph 2 – subparagraph 2 – point b
Article 18 – paragraph 2 – subparagraph 2 – point b
Amendment 671 #
Proposal for a regulation
Article 19 – paragraph 1
Article 19 – paragraph 1
1. Before taking the decision referred to inWhen receiving a credit institution's separation plan in line with Article 10(3)8, the competent authority shall notify the relevant resolution authority designated in accordance with Article 3 of Directive [BRRD] thereof.
Amendment 674 #
Proposal for a regulation
Article 19 – paragraph 2
Article 19 – paragraph 2
Amendment 684 #
Proposal for a regulation
Article 19 – paragraph 4
Article 19 – paragraph 4
4. The competent authority shall ensure that measures imposed pursuant to this Chapter, are consistent with the measures imposed pursuant to Article 13(b) of Regulation (EU) No 1024/2013, Article 8(9) of Regulation (EU) No [SRM], Article 13 and 13(a), Articles 14 and 15 of Directive [BRRD] and Article 104 of Directive 2013/36/EU.
Amendment 758 #
Proposal for a regulation
Article 23 – paragraph 1 – subparagraph 2 – point a
Article 23 – paragraph 1 – subparagraph 2 – point a
(a) Trading Securities Assets (TSA) are total assets that are part of a portfolio managed as a whole and for which there is evidence of a recent actual pattern of short-term profit takingminus non-bank loans minus cash and deposits at central bank minus intangible assets, excluding derivative assets;
Amendment 761 #
Proposal for a regulation
Article 23 – paragraph 1 – subparagraph 2 – point b
Article 23 – paragraph 1 – subparagraph 2 – point b
(b) Trading Securities Liabilities (TSL) are liabilities taken with the intent of repurchasing in the near term, part of a portfolio managed as a whole, and for which there is evidence of a recent actual pattern of short-term profit-taking, excluding derivative liabilities;
Amendment 769 #
Proposal for a regulation
Article 24 – paragraph 1
Article 24 – paragraph 1
1. Entities referred to in Article 3, including separated trading entities in accordance with Article 8 a (new), shall submit, for the first time [PO to insert a date 93 months after the date of publication of this Regulation] and on a yearly basis thereafter, the relevant information concerning the total amount of their trading activities and the components thereof, as provided for in Article 23(1), to the competent authority.
Amendment 770 #
Proposal for a regulation
Article 25 – paragraph 2
Article 25 – paragraph 2
2. The entities subject to this Regulation shall provide the competent authority with all the information necessary, including the information necessary for the metrics- based assessment referred to in Article 9(2), for the assessment of their compliance with this Regulation. Those entities shall also ensure that their internal control mechanisms and administrative and accounting procedures permit the monitoring of their compliance with this Regulation at all times.
Amendment 802 #
Proposal for a regulation
Article 28 – paragraph 4 – subparagraph 1 – point h
Article 28 – paragraph 4 – subparagraph 1 – point h
(h) in respect of a natural person, a maximum administrative pecuniary sanction of at least EUR 15 000 000 or in the Member States whose currency is not the euro, the corresponding value in the national currency on the date of entry to force of this Regulation;
Amendment 816 #
Proposal for a regulation
Article 30 – paragraph 2 – point b
Article 30 – paragraph 2 – point b
(b) appropriate protection for persons working under a contract of employment, who report breaches or who are accused of breaches, against retaliation, discrimination or other types of unfair treatment. This includes prohibiting an institution from trying to investigate the source of the information;
Amendment 824 #
Proposal for a regulation
Article 33
Article 33