BETA

30 Amendments of Markus FERBER related to 2013/0306(COD)

Proposal for a regulation
Recital 10

(10) In the absence of a Regulation setting out rules on MMFs, diverging measures might continue to be adopted at national level, which would continue to cause significant distortions of competition resulting from important differences in essential investment protection standards. Diverging requirements on portfolio composition, eligible assets, their maturity, liquidity and diversification, as well as on credit quality of issuers of money market instruments lead to different levels of investor protection because of the different levels of risk attached to the investment proposition associated with a money market fund. The failure to adopt strict common rules applicable to MMFs in the internal market prevents uniform investor protection and gives investors different incentives to redeem their investments and thereby trigger a run. It is therefore essential to avoid contagion into the short term funding market and to the sponsors of the MMF which would largely put at risk the stability of the Union's financial market by adopting a uniform set of rules. Therefore, only EU public debt CNAV MMF or a Retail CNAV MMF should be allowed to operate in the EU from the date of entry into force of this Regulation.

2015/01/12
Committee: ECON

Proposal for a regulation
Recital 23

(23) Asset Backed Commercial Papers (ABCPs) should be considered eligible money market instruments to the extent that they respect additional requirements. Due to the fact that during the crisis certain securitisations were particularly unstable, it is necessary to impose maturity limits and quality criteria on the ~~underlying asset~~securitisations. Not all categories of underlying assets should be eligible because some were more confronted to instability than others. For this reason the underlying assets should be exclusively composed of short-term debt instruments that have been issued by corporates in the course of their business activity, such as trade receivables. Instruments such as auto loans and leases, equipment leases, consumer loans, residential mortgage loans, credit card receivables or any other type of instrument linked to the acquisition or financing of services or goods by consumers should not be eligible. ESMA should be entrusted with drafting regulatory technical standards to be submitted for endorsement by the Commission with regard to the conditions and circumstances under which the underlying exposure or pool of exposures is considered to exclusively consist of corporate debt and the conditions and numerical thresholds determining when corporate debt is of high credit quality and liquid.

2015/01/12
Committee: ECON

Proposal for a regulation
Recital 45

(45) In order to be able to absorb day-to- day fluctuations in the value of a CNAV MMF's assets and allow it to offer a constant NAV per unit or share, the CNAV MMF should have at all times a NAV buffer amounting to ~~at least~~up to 3% of its assets. The NAV buffer should serve as an absorbing mechanism for maintaining the constant NAV. This provision shall not apply to Retail CNAV MMFs and the proportion of assets Public Debt CNAVs invest in public debt. The buffer shall be calculated in accordance with risk weightings assigned to the asset classes that the MMF has invested in. All differences between the constant NAV per unit or share and the NAV per unit or share should be neutralized by using the NAV buffer. During stressed market situations, when the differences can rapidly increase, a procedure should ensure that the whole chain of management is involved. This escalation procedure should permit the senior management to take rapid remedy actions.

2015/01/12
Committee: ECON

Proposal for a regulation
Recital 54

(54) It is essential to carry out a review of this Regulation in order to assess the appropriateness of exempting certain CNAV MMFs that concentrate their investment portfolios on debt issued by the Member States from the requirement to establish a capital buffer that amounts to at least 3 % of the total value of the CNAV MMF's assets. Therefore, during the three years after the entry into force of this Regulation, the Commission should analyse the experience acquired in applying this Regulation and the impacts on the different economic aspects attached to the MMFs. The debt issued or guaranteed by the Member States represents a distinct category of investment displaying specific credit and liquidity traits. In addition, sovereign debt plays a vital role in financing the Member States. The Commission should evaluate the evolution of the market for sovereign debt issued or guaranteed by the Member States and the possibility to create a special framework for MMF that concentrate their investment policy on that type of debtAs debt issued or guaranteed by the Member States represents a distinct category of investment displaying specific credit and liquidity traits. In addition, sovereign debt plays a vital role in financing the Member States. EU Public Debt CNAVs shall invest at least 80% of their assets into EU public debt instruments by 2020.

2015/01/12
Committee: ECON

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

1a. By entry of force of this Regulation, CNAV MMF shall only be allowed to operate as either EU public debt CNAV MMFs or Retail CNAV MMFs. Accordingly, all references in this Regulation to CNAV MMFs shall refer to both, EU public debt CNAV MMFs and Retail CNAV MMFs, unless otherwise specified.

2015/01/12
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1 – point 12 a (new)

(12a) "Retail Constant Net Asset Value Money Market Fund" (Retail CNAV MMF) means a CNAV MMF that is available for subscription only to charities, non-profit organisations, public authorities and public foundations.

2015/01/12
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1 – point 12 b (new)

(12b) "EU public debt CNAV MMF" means a CNAV MMF which invests at least 80% of its assets in EU public debt instruments by 2020;

2015/01/12
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1 – point 12 c (new)

(12c) "EU public debt instruments" shall be defined as public debt instruments that are cash, government assets or reverse repos secured with government debt of the Member States;

2015/01/12
Committee: ECON

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

(d) Where it takes exposure to a securitisation, it shall be subject to the ~~additional~~ requirements laid down in Article 10.

2015/01/12
Committee: ECON

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

(a) ~~the underlying exposure or pool of exposures consists exclusively of corporate debt;~~it is identified as a simple, transparent and standardised securitisation.

2015/01/12
Committee: ECON

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

~~(b) the underlying corporate debt is of high credit quality and liquid;~~deleted

2015/01/12
Committee: ECON

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

(c) the ~~underlying corporate debt~~securitisation has a legal maturity at issuance of 397 days or less; or has a residual maturity of 397 days or less.

2015/01/12
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 1 a (new)

1 a. Asset backed commercial papers shall be considered as eligible provided that their respective instruments are liquid and that the underlying debt is of high credit quality. The condition of liquidity is met if the asset backed commercial paper is fully supported (within the meaning of Recital 64 of Regulation (EU) No 575/2013/EU) by a credit institution that fulfils the criteria in Article 11 (c). Asset backed commercial papers shall be considered as eligible provided that their respective instruments are liquid and that the underlying debt is of high quality.

2015/01/12
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 1 – introductory part

~~For the purpose of a consistent application of paragraph 1, ESMA shall develop draft regulatory technical~~The Commission shall, by [6 months following publication of this Regulation] adopt delegated acts in accordance with Article 44 specifying the criteria for identifying simple, transparent and standardsised spec~~ifying~~uritisation with regard to each of the following aspects:

2015/01/12
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 1 – point a

(a) the ~~conditions and circumstances under which the underlying exposure or pool of exposures is considered to exclusively consist of corporate debt~~structural features, such as the embedded maturity transformation and simplicity of the structure;

2015/01/12
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 1 – point b

(b) ~~conditions and numerical thresholds determining when corporate debt is of high credit quality and liquid.~~the quality of the underlying assets and related collateral characteristics;

2015/01/12
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 1 – point b a (new)

(ba) the transparency requirements of the securitisation and its underlying assets;

2015/01/12
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 1 – point b b (new)

(bb) the robustness and quality of the underwriting processes.

2015/01/12
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 2

~~ESMA shall subm~~In doing so, the Commission shall ensure consistency with the d~~raft regulatory technical standards referred to in the first subparagraph to the Commission by […]~~elegated acts adopted under Article 460 of Regulation (EU) No 575/2013 and Article xx of Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), and shall take into account the specific characteristics of securitisations with maturities at issuance of less than 397 days.

2015/01/12
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 3

~~Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accorda~~In addition, the Commission shall, by [6 months following publication of this Regulation] adopt delegated acts specifying the criteria for identifying debt of high credit quality and liquid asset backed commercial papers with regard to paragraph 1a. In doing so, the Commission shall ensure consistencey with ~~Articles 10 to 14 of Regulation (EU) No 1095/2010~~and support the work of respective work streams of EBA.

2015/01/12
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 2

2. The aggregate of all exposures to securitisations shall not exceed 105% of the assets of a MMF.

2015/01/12
Committee: ECON

Proposal for a regulation
Article 24

1. The manager of the MMF shall establish, implement and apply procedures and exercise all due diligence to identify the number of investors in a MMF, their needs and behaviour, the amount of their holdings with a view to correctly anticipate the effect of concurrent redemptions by several investors. To this effect the manager of the MMF shall consider at least the following factors: (a) identifiable patterns in investor cash needs; (b) the sophistication of the different investors; (c) the risk aversion of the different investors; (d) the degree of correlation or close links between different investors in the MMF. 2. The manager of the MMF shall ensure that: (a) the value of the units or shares held by a single investor does not exceed at any time the value of daily maturing assets; (b) redemption by an investor does not materially impact the liquidity profile of the MMF.Article 24 deleted 'Know your customer' policy

2015/01/09
Committee: ECON

Proposal for a regulation
Article 35 – title

EBan of external support

2015/01/09
Committee: ECON

Proposal for a regulation
Article 35 – paragraph 1

1. ANeither a CNAV MMF ~~may not receive external support other than in the form and under the conditions laid down in Articles 30 to 34~~nor a VNAV MMF shall receive any kind of explicit or implicit form of external support.

2015/01/09
Committee: ECON

Proposal for a regulation
Article 35 – paragraph 2

~~2. MMFs other than CNAV MMFs shall not be allowed to receive external support, except under the conditions laid down in Article 36.~~deleted

2015/01/09
Committee: ECON

Proposal for a regulation
Article 35 – paragraph 3

3. External support shall mean a direct or indirect support offered by a third party that is intended for or in effect would result in guaranteeing the liquidity of the MMF or stabilising the NAV per unit or share of the MMF. External support shall include: (a) cash injections from a third party; (b) purchase by a third party of assets of the MMF at an inflated price; (c) purchase by a third party of units or shares of the MMF in order to provide liquidity to the fund; (d) issuance by a third party of any kind of explicit or implicit guarantee, warranty or letter of support for the benefit of the MMF; (e) any action by a third party the direct or indirect objective of which is to maintain the liquidity profile and the NAV per unit or share of the MMF.deleted

2015/01/09
Committee: ECON

Proposal for a regulation
Article 35 – paragraph 3 – subparagraph 1

External support shall mean a direct or indirect support offered by a third party that is intended for or in effect would result in guaranteeing the liquidity of the MMF or stabilising the NAV per unit or share of the MMF.deleted

2015/01/09
Committee: ECON

Proposal for a regulation
Article 35 – paragraph 3 – subparagraph 2

External support shall include: (a) cash injections from a third party; (b) purchase by a third party of assets of the MMF at an inflated price; (c) purchase by a third party of units or shares of the MMF in order to provide liquidity to the fund; (d) issuance by a third party of any kind of explicit or implicit guarantee, warranty or letter of support for the benefit of the MMF; (e) any action by a third party the direct or indirect objective of which is to maintain the liquidity profile and the NAV per unit or share of the MMF.deleted

2015/01/09
Committee: ECON

Proposal for a regulation
Article 36

1. In exceptional circumstances justified by systemic implications or adverse market conditions the competent authority may allow a MMF other than a CNAV MMF to receive external support referred to in Article 35 that is intended for or in effect would result in guaranteeing the liquidity of the MMF or stabilising the NAV per unit or share of the MMF provided that all of the following conditions are fulfilled: (a) the MMF duly justifies the necessity of external support and demonstrates through conclusive evidence the urgent need for external support; (b) the external support is limited in terms of the amount provided and the period of time when it is made available; (c) the competent authority is satisfied that the provider of the external support is financially sound and has sufficient financial resources to withstand without any adverse effects possible losses resulting from the external support granted. 2. For the purposes of paragraph 1(c), in case the provider of the external support is an entity subject to prudential supervision the agreement of the supervisory authority of that entity shall be sought in view of ensuring that the support to be granted by the entity is subject to adequate own funds provided by that entity and is in line with the risk management system of that entity. 3. Where the conditions referred to in paragraph 1 for receiving external support are fulfilled the MMF shall immediately inform each investor thereof in writing and in a clear and comprehensible way.Article 36 deleted Exceptional circumstances

2015/01/09
Committee: ECON

Proposal for a regulation
Article 43 – paragraph 1

1. Within t~~he six~~welve months following the date of entry into force of this Regulation, an existing UCITS or AIF that invests in short term assets and has as distinct or cumulative objectives offering returns in line with money market rates or preserving the value of the investment shall submit an application to its competent authority together with all documents and evidence necessary to demonstrate the compliance with this Regulation.

2015/01/09
Committee: ECON