[ParlTrack]

Proposal for a regulation
Recital 4

(4) Product governance requirements can restrict the sale of corporate bonds. Corporate bonds with a “make whole clause” are generally considered safe and simple products that are eligible for retail clients. Such a “make whole clause” protects investors against losses in case an issuer opts for early repayment by ensuring that those investors are provided with a payment equal to the net present value of the coupons they would have received if the bond would not have been called. ThSome product governance requirements should therefore no longer apply to corporate bonds with such “make-whole clauses”.

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 5

(5) The call for evidence, launched by the European Securities and Markets Authority (ESMA), on the impact of inducements and cost and charges disclosure requirements under Directive 2014/65/EU and the public consultation of the Commission both confirmed that professional clients and eligible counterparties do not need standardised and mandatory cost information as they already receive the necessary information when they negotiate with their service provider. That information is tailored to their needs and often more detailed. Eligible counterparties and professional clients should therefore be exempted from those cost and charges disclosure requirements, except with regard to the services of investment advice and portfolio management because professional clients entering into portfolio management or investment advice relationships ~~are~~ do not necessarily have sufficient expertise or knowledge to be exempted from the costs and charges disclosures.

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 7

(7) Clients with an ongoing relationship with an investment firm receive mandatory service reports, either periodically or based on triggers. Neither investment firms nor their professional clients find such service reports useful. Those reports ~~have proved in particular~~may be unhelpful for professional clients in extreme volatile markets, as those reports are provided in a high frequency and number. ~~Professional clients often react to those service reports either by not reading those reports, or by making fast investment decisions rather than continuing with a long-term investment strategy.~~ Eligible counterparties should therefore have the possibility to no longer receive such service reports, Professional clients, however, should have the possibility to opt-in to those service reports.

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 9

(9) In order to facilitate the communication between investment firms and their clients and thus the investment process itself, investment information should no longer be provided on paper but should, as a default option, be provided electronically. Retail clients should however be able to ~~request the continued provision of~~have the possibility of continuing to receive the information on paper unless they opt-in online for receiving the information oin ~~paper~~an electronic format.

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 10

(10) Directive 2014/65/EU allows persons that trade in commodity derivatives, emission allowances and derivatives on emission allowances on a professional basis to make use of an exemption from authorisation as an investment firm when their trading activity is ancillary to their main business. Those persons applying for the ancillary activity test are required to notify the relevant competent authority annually that they make use of that possibility and provide the necessary elements to satisfy the two quantitative tests that determine whether its trading activity is ancillary to its main business. The first test compares the size of an entity's speculative trading activity to the total trading activity in the Union on an asset class basis. The second test compares the size of the speculative trading activity, with all asset classes included, to the total trading activity in financial instruments by the entity at group level. There is an alternative form of the second test, which consists of comparing the estimated capital used for the speculative trading activity to the actual amount of capital used at group level for the main business. Those quantitative tests are particularly complex and have not altered the status quo in terms of persons that are eligible for the exemption. Therefore, the exemption should rely solely on qualitative elements. Persons that are eligible for the exemption, including market makers, are dealing on own account or providing investment services other than dealing on own account, to customers or suppliers of their main business. The exemption is available for both cases individually and on an aggregate basis where this is an ancillary activity, when considered on a group basis. That exemption should not be available for persons who apply a high- frequency algorithmic trading technique or are part of a group the main business of which is the provision of investment services, or banking activities, or acting as a market maker in relation to commodity derivatives. All provisions regarding the quantitative elements should be deleted.

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 11

(11) Competent authorities currently have to establish and apply position limits on the size of a net position which a person can hold at all times in commodity derivatives traded on trading venues and in economically equivalent Over-The- Counter (EEOTC) contracts designated by the Commission. As the position limit regime has proved to be unfavourable for the development of new commodity markets, nascent commodity markets should be excluded from the position limit regime. Instead, the position limits should only apply to those commodity derivatives that are deemed significant or critical commodity derivatives and their EEOTC contracts. Significant or critical derivatives are energy commodity derivatives with an open interest of at least 300 000 lots over a one-year period. Due to its critical importance for citizens, agricultural commodities that have an underlying that is for human consumption, and their EEOTC contracts, will remain under the current position limit regime. ESMA should be mandated to develop draft regulatory standards to define agricultural commodities with an underlying for human consumption subject to position limits and critical or significant derivatives subject to position limits. For significant and critical derivatives, ESMA should take into account the 300 000 lots open interest over a one-year period, the number of market participants and the underlying commodity.deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 12

(12) Directive 2014/65/EU does not allow hedging exemptions for any financial entities. Several predominantly commercial groups who set up a financial entity for their trading purposes found themselves in a situation where their financial entity could not carry out all the trading for the group, as the financial entity was not eligible for the hedging exemption. Therefore, a narrowly defined hedging exemption for financial counterparties should be introduced. That hedging exemption should be available where, within a predominantly commercial group, a person has been registered as an investment firm and trades on behalf of that commercial group. To limit this hedging exemption to only those financial entities that trade for the non-financial entities in the predominantly commercial group, that hedging exemption should apply to those positions held by that financial entity that are objectively measurable as reducing risks directly related to the commercial activities of the non-financial entities of the group.deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 13

(13) Even in liquid contracts, only a limited number of market participants typically act as market makers in commodity markets. When those market participants have to apply position limits they are not in a positon to be as effective as market markers. Therefore, an exemption from the position limit regime should be introduced for financial and non-financial counterparties for positions resulting from transactions undertaken to fulfil mandatory liquidity provisions.deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 14

~~(14) The current position limit regime does not recognise the unique characteristics of securitised derivatives. Securitised derivatives should therefore be excluded from the position limit regime.~~deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 15

(15) Since the entry into force of Directive 2014/65/EU, no same commodity derivative contracts have been identified. Due to the concept of “same contract” in that Directive, the methodology for determining the other months’ limit is detrimental to the venue with the less liquid market when trading venues are competing on commodity derivatives based on the same underlying and sharing the same characteristics. Therefore, the reference to “same contract” in Directive 2014/65/EU should be deleted. Competent authorities should be able to agree that the commodity derivatives traded on their respective trading venues are based on the same underlying and share the same characteristics, in which case the baseline for the other months’ limit on the most liquid market for that commodity derivative can be used as the baseline limit for setting the other months’ position limit for the competing contracts traded on the less liquid venues.deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 16

~~(16) Significant dissimilarities exist in the way positions are managed by trading venues in the Union. Therefore, position management controls should be reinforced where necessary.~~deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Recital 17

(17) In order to ensure the further development of Euro denominated EU commodity markets, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of which agricultural commodity derivatives should be subject to position limits and which critical or significant derivatives should be subject to position limits, in respect of a procedure for which persons may apply for a hedging exemption for positions resulting from transactions undertaken to fulfil mandatory liquidity provisions, in respect of a procedure for which financial entities that are part of a predominantly commercial group may apply for a hedging exemption for positions held by that financial entity that are objectively measurable as reducing risks directly related to the commercial activities of the non-financial entities of the group, in respect of the clarification of the content of position management controls. It is of particular importance that the Commission carries out appropriate consultations during its preparatory work, including at expert level, and that those consultations are conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making10 . In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts. _________________ 10 OJ L 123, 12.5.2016, p. 1.deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 1 – point a

Directive 2014/65/EU
Article 2 – paragraph 1 – point j

(a) in paragraph 1, point (j) is replaced by the following: ‘(j) persons: (i) dealing on own account, including market makers, in commodity derivatives or emission allowances or derivatives thereof, excluding persons who deal on own account when executing client orders; or (ii) providing investment services, other than dealing on own account, in commodity derivatives or emission allowances or derivatives thereof to the customers or suppliers of their main business; provided that – for each of those cases individually and on an aggregate basis, the activity is ancillary to their main business, when considered on a group basis; – those persons are not part of a group the main business of which is the provision of investment services within the meaning of this Directive, the performance of any activity listed in Annex I to Directive 2013/36/EU, or acting as a market-maker for commodity derivatives; – those persons do not apply a high- frequency algorithmic trading technique; – those persons report upon request to the competent authority the basis on which they have assessed that their activity under points (i) and (ii) is ancillary to their main business.”`;’deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 1 – point b

Directive 2014/65/EU
Article 2 – paragraph 4

~~(b) paragraph 4 is~~ deleted;

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 3 a (new)

Directive 2014/65/EU
Article 16 d (new)

(3a) the following Article is inserted: "Article 16d 1. Within twelve months after the [date of entry into force of this amending Directive] the Commission shall, after consulting ESMA, present a report to the European Parliament and the Council assessing the potential impact of reviewing the provisions of paragraph 13 of Article 24 of this Directive and of Article 13 of Delegated Directive (EU) 2017/593 including the appropriateness of providing for measures targeted to support small and mid-cap issuers, and submit, if appropriate a legislative proposal to the European Parliament and the Council."

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 4 – point a

Directive 2014/65/EU
Article 24 – paragraph 2 – subparagraph 2 a

~~(a) In paragraph 2, the following subparagraph is added: ‘This paragraph shall not apply to corporate bonds with make-whole clauses.;’~~deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 4 – point b

Directive 2014/65/EU
Article 24 – paragraph 4 – subparagraph 2 a – introductory part

“Where the agreement to buy or sell a financial instrument is concluded using means of ~~distan~~telephonic or other voice communication, the investment firm may provide the information on costs and charges ~~in an electronic format~~ without undue delay after the conclusion of the transaction, provided that all of the following conditions are met:

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 4 – point c

Directive 2014/65/EU
Article 24 – paragraph 5 a – subparagraph 1

5a. Investment firms shall provide all information required by this Directive to clients or potential clients in electronic format, except where the client or potential client is a retail client or potential retail client ~~who has requested receiving the information on paper,~~ in which case that information shall be provided by default on paper and free of charge.

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 4 – point c

Directive 2014/65/EU
Article 24 – paragraph 5 a – subparagraph 2

Investment firms shall inform retails clients or potential retail clients that they have the option to receive the information on ~~paper~~ly in electronic format, if they request so online.

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 4 – point c

Directive 2014/65/EU
Article 24 – paragraph 5 a – subparagraph 3

Investment firms shall inform existing retail clients that used to receive the information required by this Directive on paper about the fact that they will receive that information in electronic form at least eight weeks before sending that information in electronic form. Investment firms shall inform the existing retail clients that they have the choice to either continue receiving information on paper or to switch to information in electronic format. Investment firms shall also inform existing retail clients that an automatic switch to the electronic format will follow where they do not request the continuation of the provision of the information on paper within that eight weeks period.;deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 4 – point c a (new)

Directive 2014/65/EU
Article 24 – paragraph 13 – point d

(ca) Article 24(13) point d is amended as follows: "(d) the criteria to assess compliance of firms receiving inducements with the obligation to act honestly, fairly and professionally in accordance with the best interest of the client~~. (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0065&from=EN)~~, but excluding any derogation related to thresholds of market capitalisation of issuers for which the research is provided by investment firms." Or. en

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 5 a (new)

Directive 2014/65/EU
Article 25 – paragraph 8 – introductory part

(5a) in Article 25(8), the introductory part is amended as follows : "8. The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to ensure that investment firms comply with the principles set out in paragraphs 2 to 6 of this Article when providing investment or ancillary services to their clients, including information to obtain when assessing the suitability or appropriateness of the services and financial instruments for their clients, criteria to assess non-complex financial instruments for the purposes of point (a)(vi) of paragraph 4 of this Article, the content and the format of records and agreements for the provision of services to clients and of periodic reports to clients on the services provided~~. Those delegated acts shall take into account: (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0065&from=EN)~~, but excluding obligations related to loss reporting thresholds laid down in Article 25a. Those delegated acts shall take into account:”" Or. en

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 5 b (new)

Directive 2014/65/EU
Article 25 a (new)

(5b) the following Article 25a is inserted: “Article 25a Loss reporting thresholds 1. Investment firms providing the service of portfolio management shall inform the client where the overall value of the portfolio, as evaluated at the beginning of each reporting period, depreciates by 10% and thereafter at multiples of 10%, no later than the end of the business day in which the threshold is exceeded or, in a case where the threshold is exceeded on a non-business day, the close of the next business day. 2. Investment firms that hold a retail client account that includes positions in leveraged financial instruments or contingent liability transactions shall inform the client, where the initial value of each instrument depreciates by10% and thereafter at multiples of 10 %. Reporting under this paragraph should be on an instrument-by-instrument basis, unless otherwise agreed with the client, and shall take place no later than the end of the business day in which the threshold is exceeded or, in a case where the threshold is exceeded on a non-business day, the close of the next business day.”

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 9

Directive 2014/65/EU
Article 57 – paragraphs 1,3,4,6,7,8

~~[...]~~deleted

2020/10/15
Committee: ECON

Ernest URTASUN

Proposal for a regulation
Article 1 – paragraph 1 – point 10

Directive 2014/65/EU
Article 58 – paragraph 2

(10) in Article 58, paragraph 2 is replaced by the following: ‘2. Member States shall ensure that investment firms trading in commodity derivatives or emission allowances or derivatives thereof outside a trading venue provide the central competent authority referred to in Article 57(6), on at least a daily basis, with a complete breakdown of their positions taken in commodity derivatives or emission allowances or derivatives thereof traded on a trading venue and economically equivalent OTC contracts, as well as of those of their clients and the clients of those clients until the end client is reached, in accordance with Article 26 of Regulation (EU) No 600/2014 and, where applicable, of Article 8 of Regulation (EU) No 1227/2011..’deleted

2020/10/15
Committee: ECON

Activities of Ernest URTASUN related to 2020/0152(COD)

Plenary speeches (2)

Shadow reports (1)

Amendments (25)

ParlTrack - 2011-2024