39 Amendments of Molly SCOTT CATO related to 2018/0179(COD)
Amendment 51 #
Proposal for a regulation
Recital 2
Recital 2
(2) A common objective of Directive 2009/65/EC of the European Parliament and of the Council32 , Directive 2009/138/EC of the European Parliament and of the Council33 , Directive 2011/61/EU of the European Parliament and of the Council34 , Directive 2014/65/EU of the European Parliament and of the Council35 , Directive (EU) 2016/97 of the European Parliament and of the Council36 , Directive (EU) 2016/2341 of the European Parliament and of the Council37 , Regulation (EU) No 345/2013 of the European Parliament and of the Council38 and Regulation (EU) No 346/2013 of the European Parliament and of the Council39 is to facilitate the taking- up and pursuit of the activities of undertakings for collective investment in transferable securities (UCITS), alternative investment fund managers (AIFMs), insurance undertakings, investment firms, insurance intermediaries, institutions for occupational retirement provision (IORPs), managers of qualifying venture capital funds (EuVECA managers), and managers of qualifying social entrepreneurship funds (EuSEF managers). Those Directives and Regulations ensure more uniform protection of end-investors and make it easier for them to benefit from a wide range of financial products and services, and at the same time provide for rules that enable investors to make informed investment decisions. While those objectives have been largely achieved, disclosures to end-investors on the integration of sustainability risks and sustainable investment targets in investment decision-making by UCITS management companies, AIFMs, insurance undertakings, investment firms which provide portfolio management, IORPs, pension providers, EuVECA managers, credit institutions and EuSEF managers (financial market participants) and disclosures to end- investors on the integration of sustainability risks in advisory processes by insurance intermediaries which provide insurance advice with regard to insurance- based investment products (IBIPs) and investment firms which provide investment advice (financial advisors) are insufficiently developed because such disclosures are not yet subject to harmonised requirements. _________________ 32 Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32). 33 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1). 34 Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers (OJ L 174, 1.7.2011, p. 1). 35 Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349). 36 Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (OJ L 26, 2.2.2016, p. 19). 37 Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (OJ L 354, 23.12.2016, p. 37). 38 Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013 on European venture capital funds (OJ L 115, 25.4.2013, p. 1). 39 Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds (OJ L 115, 25.4.2013, p. 18).
Amendment 64 #
Proposal for a regulation
Recital 5
Recital 5
(5) Remuneration policies of financial market participants and financial advisors should be consistent withThe variable remuneration component in an employee’s overall remuneration package is intended to create incentives for positive behaviour in their daily work. Aligning the culture of the financial sector with the Unions’ commitments under the Paris Agreement to combat climate change and the United Nations Sustainable Development Goals requires changing these integration of sustainability risks and, where relevant, scentive structures to incorporate sustainable investing and the avoidance of sustainability risks as goals. The aim can no longer be better-than-average performance in purely financial terms, but musta inable investment targets and should be designed to contribute to long-term sustainable growthclude the above-mentioned goals and commitments. Therefore this Regulation requires that financial service providers set a sustainable investment target of at least 50 per cent when establishing performance criteria for variable remuneration. Pre-contractual disclosures should therefore include information on how the remuneration policies of those entities are consistent with the integration of sustainability risks and are in line, where relevant, withwhat the sustainable investment targets of the financial products and services are that the financial market participants make available or financial advisors advise on.
Amendment 66 #
Proposal for a regulation
Recital 5 a (new)
Recital 5 a (new)
(5a) The definition of sustainability risks shall comprise not only the impact of the non-mitigation of environmental, social and governance risks on the performance of a financial product, but importantly the adverse non-financial impact that the non-mitigation of these risks has on the broader society. The definition of such risks is required to ensure a minimum level of consistency in regulatory outcomes, but is also meant as an evolving and dynamic tool able to integrate emerging risks.
Amendment 87 #
Proposal for a regulation
Article 2 – paragraph 1 – point a – point iv a (new)
Article 2 – paragraph 1 – point a – point iv a (new)
(iva) a credit institution.
Amendment 89 #
Proposal for a regulation
Article 2 – paragraph 1 – point d a (new)
Article 2 – paragraph 1 – point d a (new)
(da) ‘credit institution’ means a credit institution as defined in Article 4(1)(1) of Regulation (EU) No 575/2013 with the exception of small and non-complex institutions defined under Article 4(1), point 144a thereof;
Amendment 90 #
Proposal for a regulation
Article 2 – paragraph 1 – point e
Article 2 – paragraph 1 – point e
(e) ‘investment firm’ means an investment firm as defined in Article 4(1)(1) of Directive 2014/65/EU with the exception of small and non- interconnected investment firms defined under Article 12 of Regulation [PO : Please insert reference to Regulation on the prudential requirements of investment firms];
Amendment 94 #
Proposal for a regulation
Article 2 – paragraph 1 – point n a (new)
Article 2 – paragraph 1 – point n a (new)
(na) “relevant competent authorities” means the competent or the designated authorities for the supervision of financial market participants referred to under point a of this Article;
Amendment 101 #
Proposal for a regulation
Article 2 – paragraph 1 – point o – point i
Article 2 – paragraph 1 – point o – point i
(i) investments in an economic activity that contributes substantially to an environmental objective, including an environmentally sustainable investment as defined in Article 2 of [PO: Please insert reference to Regulation on the establishment of a framework to facilitate sustainable investment] and does not harm the objectives of investments under points (ii) and (iii);
Amendment 104 #
Proposal for a regulation
Article 2 – paragraph 1 – point o – point ii
Article 2 – paragraph 1 – point o – point ii
(ii) investments in an economic activity that contributes substantially to a social objective, and in particular an investment that contributes to tackling inequality, an investment fostering social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities and does not harm the objectives of investments under points (i) and (iii);
Amendment 107 #
Proposal for a regulation
Article 2 – paragraph 1 – point o – point iii
Article 2 – paragraph 1 – point o – point iii
(iii) investments in companies that do not harm the objectives of investment under points (i) and (ii) and contribute substantially to following good governance practices, and in particular companies with sound management structures, employee relations, remuneration of relevant staff and tax compliance;
Amendment 109 #
Proposal for a regulation
Article 2 – paragraph 1 – point o – point iii – indent 1 (new)
Article 2 – paragraph 1 – point o – point iii – indent 1 (new)
Amendment 111 #
Proposal for a regulation
Article 2 – paragraph 1 – point s a (new)
Article 2 – paragraph 1 – point s a (new)
Amendment 116 #
Proposal for a regulation
Article 2 – paragraph 1 – point s b (new)
Article 2 – paragraph 1 – point s b (new)
(sb) ‘due diligence’ is the continuous process through which an investor or investment services provider identifies, prevents, mitigates and communicates about their actual and potential sustainability risks, prior to making an investment and until sale or maturity of the investment in accordance with the OECD's work on "Responsible business conduct for institutional investors: Key considerations for due diligence under the OECD Guidelines for Multinational Enterprises" and the UN Guiding Principles on Business and Human Rights.
Amendment 119 #
Proposal for a regulation
Article 3 – title
Article 3 – title
Amendment 120 #
Proposal for a regulation
Article 3 – paragraph 1
Article 3 – paragraph 1
1. Financial market participants shall publish written policies ohave in place written and sufficiently detailed due diligence policies and report them to the relevant competent authorities on an annual basis. As a minimum, these concern the integration of sustainability risks in the investment decision-making procesir governance structures, investment strategies, risk management procedures, the exercise of their shareholder voting rights and engagement with companies. They shall publish these policies on their websites in written form.
Amendment 131 #
Proposal for a regulation
Article 3 – paragraph 2
Article 3 – paragraph 2
2. Insurance intermediaries which provide insurance advice with regard to IBIPs and investment firms which provide investment advice shall publish written policies ohave in place written and sufficiently detailed due diligence policies and report them to relevant competent authorities on an annual basis. As a minimum, these concern the integration of sustainability risks in their investment advice or insurance advice on their websites. activities, their governance structures, investment strategies, risk management procedures and engagement with companies. They shall publish these policies on their websites in written form.
Amendment 137 #
Proposal for a regulation
Article 3 – paragraph 2 a (new)
Article 3 – paragraph 2 a (new)
2a. The information to be disclosed pursuant to paragraphs 1 and 2 shall be published in a clear way and in a prominent area of the website to be understandable to different stakeholders, including the general public, and to ensure accessibility and comprehension by a non-specialised audience.
Amendment 138 #
Proposal for a regulation
Article 3 – paragraph 2 b (new)
Article 3 – paragraph 2 b (new)
2b. The Commission shall adopt delegated acts in accordance with Article 9a to specify: (a) binding standards for the due diligence policies that financial market participants and insurance intermediaries must implement to ensure that adverse sustainability risks are integrated in the activities referred to paragraphs 1 to 2 of this Article; (b) the details of the presentation and content of the information to be disclosed pursuant to paragraphs 1 to 2a.
Amendment 146 #
Proposal for a regulation
Article 4 – paragraph 1 – point a
Article 4 – paragraph 1 – point a
(a) the due diligence procedures and conditions applied for integrating sustainability risks in investment decisions;
Amendment 148 #
Proposal for a regulation
Article 4 – paragraph 1 – point a a (new)
Article 4 – paragraph 1 – point a a (new)
(aa) how much, in percentage terms, of a financial product made available is invested in economic activities that are defined as sustainable unsustainable under Regulation [PO: Please insert reference to Regulation on the establishment of a framework to facilitate sustainable investment];
Amendment 152 #
Proposal for a regulation
Article 4 – paragraph 1 – point b
Article 4 – paragraph 1 – point b
(b) the extent to which sustainability risks are expected to have a relevant impact on the returnstemming from the economic activities of the financial products made available;
Amendment 159 #
Proposal for a regulation
Article 4 – paragraph 1 – point c
Article 4 – paragraph 1 – point c
(c) how the remuneration policies of financial market participants are consistent with the integration of sustainability risks and are in line, where relevant, with the sustainable investment target of the financial productthe requirements in Article 4(a).
Amendment 167 #
Proposal for a regulation
Article 4 – paragraph 2 – point a
Article 4 – paragraph 2 – point a
(a) the due diligence procedures and conditions applied for integrating sustainability risks in investment advice or insurance advice;
Amendment 168 #
Proposal for a regulation
Article 4 – paragraph 2 – point a a (new)
Article 4 – paragraph 2 – point a a (new)
(aa) the percentage to which the financial products advised on are invested in economic activities defined as sustainable/ unsustainable under Regulation [PO: Please insert reference to Regulation on the establishment of a framework to facilitate sustainable investment];
Amendment 170 #
Proposal for a regulation
Article 4 – paragraph 2 – point b
Article 4 – paragraph 2 – point b
(b) the extent to which sustainability risks are expected to have a relevant impact on the returnstemming from the economic activities of the financial products advised on;
Amendment 174 #
Proposal for a regulation
Article 4 – paragraph 2 – point c
Article 4 – paragraph 2 – point c
(c) how the remuneration policies of investment firms which provide investment advice and insurance intermediaries which provide insurance advice with regard to IBIPs are consistent with the integration of sustainability risks and are in line, where relevant, with the sustainable investments target of the financial product advised onthe requirements in Article 4(a).
Amendment 179 #
Proposal for a regulation
Article 4 – paragraph 3 a (new)
Article 4 – paragraph 3 a (new)
3a. The European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA)and the European Securities and Markets Authority (ESMA) shall, through the Joint Committee of the European Supervisory Authorities (‘Joint Committee’) develop draft regulatory technical standards further specifying the alignment of the provisions referred to under paragraph 3 with the requirements of paragraph 1 and 2, relating to the details of the presentation and content of the information to be disclosed pursuant to this Article. EBA, EIOPA and ESMA shall submit those draft regulatory technical standards to the Commission by [PO: Please insert date 12 months after the date of entry into force]. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of Regulation(EU) No 1095/2010.
Amendment 180 #
Proposal for a regulation
Article 4 a (new)
Article 4 a (new)
Article 4a Integration of Sustainability in Remuneration Policies When establishing and applying the total remuneration policies, inclusive of salaries and discretionary pension benefits, for categories of staff including senior management, risk takers, staff engaged in control functions and any employee receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers, whose professional activities have a material impact on their risk profile, financial market participants shall set a sustainable investment target of at least 50 per cent for the variable remuneration component. The targets that determine the remaining part of variable remuneration shall include the avoidance of sustainability risks as defined in Article 2.
Amendment 189 #
Proposal for a regulation
Article 5 – paragraph 1 – point a a (new)
Article 5 – paragraph 1 – point a a (new)
(aa) an explanation as to how the indicators listed in Article 2(1)(sa) are considered in the methodology of the index
Amendment 197 #
Proposal for a regulation
Article 5 – paragraph 3 – subparagraph 1
Article 5 – paragraph 3 – subparagraph 1
Where a financial product has as its target the reduction inis explicitly intended to be in alignment with the Paris Agreement on climate change or aims to reduce carbon emissions, the information to be disclosed pursuant to Article 4(1) shall include the targeted degree of alignment with the Paris Agreement or low carbon emission exposure.
Amendment 201 #
Proposal for a regulation
Article 5 – paragraph 3 – subparagraph 2
Article 5 – paragraph 3 – subparagraph 2
By way of derogation from paragraph 2, where no [EU low carbon benchmark] or [positive carbon impact benchmark] in accordance with Regulation (EU) 2016/1011 is available, the information referred to in Article 4 shall include a detailed explanation of how the continued effort of reaching the target of reducing carbon emissions and/or attaining the goals of the Paris Agreement is ensured.
Amendment 203 #
Proposal for a regulation
Article 5 – paragraph 6 – subparagraph 1
Article 5 – paragraph 6 – subparagraph 1
EBA, EIOPA and ESMA shall submit those draft regulatory technical standards to the Commission by [PO: Please insert date 182 months after the date of entry into force].
Amendment 210 #
Proposal for a regulation
Article 6 – paragraph 1 – subparagraph 2
Article 6 – paragraph 1 – subparagraph 2
The information to be disclosed pursuant to the first subparagraph shall be published in a clear way and in a prominent area of the websiteclear, succinct and understandable for retail investors and the general public. It shall be published in a clear way and in a prominent area of the website. The website shall also provide more detailed information for professional investors and other experts. Where relevant, the information for retail investors shall include hyperlinks to the detailed information for professional investors.
Amendment 212 #
Proposal for a regulation
Article 6 – paragraph 2 – subparagraph 1
Article 6 – paragraph 2 – subparagraph 1
EBA, EIOPA and ESMA shall, through the Joint Committee, develop draft regulatory technical standards further specifying the details of the content and presentation and content of information referred to in point (a) and (b) of of information referred to in paragraph 1, specifying the alignment of the provisions referred to under paragraph 2 with the requirements of paragraph 1 relating to the details of the content and presentation of information referred to in this paragraph. EBA, EIOPA and ESMA shall submit those draft regulatory technical standards to the Commission by [PO: Please insert date 12 months after the date of entry into force]. The Commission shall adopt delegated acts in accordance with Articles 10 to 14 of Regulation (EU) No1093/2010, of Regulation (EU) No 1094/2010 and of Regulation (EU) No 1095/2010 concerning the regulatory technical standards referred to in the first subparagraph 1.
Amendment 225 #
Proposal for a regulation
Article 7 – paragraph 4 – subparagraph 1
Article 7 – paragraph 4 – subparagraph 1
EBA, EIOPA and ESMA shall, through the Joint Committee, develop draft regulatory technical standards further specifying the details of the content and presentation of information referred to in paragraph 1, specifying the alignment of the provisions referred to under paragraph 2 with the requirements of paragraph 1 relating to the details of the content and presentation of information referred to in this paragraph.
Amendment 227 #
Proposal for a regulation
Article 7 – paragraph 4 – subparagraph 2
Article 7 – paragraph 4 – subparagraph 2
EBA, EIOPA and ESMA shall submit those draft regulatory technical standards to the Commission by [PO: Please insert date 182 months after the date of entry into force].
Amendment 229 #
Proposal for a regulation
Article 8 – paragraph 1
Article 8 – paragraph 1
1. Financial market participants shall ensure thatreview any information published in accordance with Article 3 or Article 6 at least annually and ensure that this information is kept up-to-date. Where a financial market participant amends such information, a clear explanation of that change shall be published on the same website.
Amendment 234 #
Proposal for a regulation
Article 9 a (new)
Article 9 a (new)
Article 9a Exercise of the delegation 1. The Commission shall adopt delegated acts subject to the conditions laid down in this Article. 2. The power to adopt delegated acts referred to in Article3 shall be conferred on the Commission for an indeterminate period from [date of entry into force of this Regulation]. 3. The delegation of power referred to in paragraph 2 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force. 4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council. 5. A delegated act adopted pursuant to Articles 2 (..), 3(2b) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.
Amendment 238 #
Proposal for a regulation
Article 11 – paragraph 1
Article 11 – paragraph 1
By [PO: Please insert date 6024 months after the date of entry into force], the Commission shall conduct an evaluation of the application of this Regulation in particular as regards social and governance factors and indicators, their integration in investment decisions and pre-contractual disclosures. It shall submit the evaluation report to the European Parliament and the Council. The Commission shall, if appropriate, accompany that review with a legislative proposal establishing uniform criteria for determining socially sustainable economic activities and good governance practices, leading to the establishment of a unified EU classification system.