9 Amendments of Markus FERBER related to 2020/0154(COD)
Amendment 13 #
Proposal for a regulation
Recital 4
Recital 4
(4) The UK Financial Conduct Authority (FCA) has announced it will stop supporting the producAs of the end of the transition period, the London Interbank Offered Rate (LIBOR) will not qualify as a critical benchmark. The UK Financial Conduct Authority (FCA) has announced it will stop encouraging or compelling banks to contribute to LIBOR thereby creating a substantial risk of cessation of one of the most important interest rate benchmarks, the London Interbank Offered Rate (LIBOR) by the end of 2021. As of the end of the transition period for the United Kingdom’s withdrawal from the Union on 31 December 2021, LIBOR will no longer qualify as a critical benchmark. The cessation of LIBOR may nevertheless result in negative consequences that produce significant disruption in the functioning of financial markets in the Union. In the Union there is a stock of contracts in the areas of debt, loans, term deposits and derivatives that reference LIBOR, that mature beyond 31 December 2021 and that do not have robust contractual fall-back provisions to cover for the cessation of LIBOR. Many of those contracts cannot be renegotiated to incorporate a contractual fall-back prior to 31 December 2021. The cessation of LIBOR may therefore result in significant disruption in the functioning of financial markets in the Union.
Amendment 15 #
Proposal for a regulation
Recital 5
Recital 5
(5) To be able to provide for an orderly wind down of contracts that reference a widely used critical benchmark the cessation of which may result in negative consequences that produce significant disruption in the functioning of financial markets in the Union and where such contracts cannot be renegotiated to include a contractual fall- back rate by the time of that benchmark’s cessation, a framework accompanying the cessation of such benchmarks should be laid down. That framework should comprise a mechanism aimed at transitioning such contracts to suitable replacement benchmarks. Replacement benchmarks should ensure avoiding contract frustration which may result in negative consequences that produce significant disruption in the functioning of financial markets in the Union.
Amendment 17 #
Proposal for a regulation
Recital 10
Recital 10
(10) In exercising its implementing powers to designate a replacement benchmark, the Commission should take into account recommendations by private sector working groups operating under the auspices of the central bank responsible for the currency in which the interest rates of the replacement benchmark are denominated with regard to replacement rates to be used in existing financial instruments and contracts referencing the benchmark in cessation. The Commission should also take into account the recommendations of the relevant supervisory authority of the benchmark administrator as well as of ESMA. Those recommendations should be based on extensive public consultations and expert knowledge, and reflect benchmark users’ agreement about the most appropriate replacement rate for the interest rate benchmark in cessation.
Amendment 20 #
Proposal for a regulation
Article 1 – paragraph 1 – point b
Article 1 – paragraph 1 – point b
Regulation (EU) 2016/1011
Article 2 – paragraph 3 a (new)
Article 2 – paragraph 3 a (new)
3 a. In order to identify benchmarks meeting the requirements of paragraph 3, the Commission shall launch a public consultation by ...[two years after the date of entry into force of this Regulation).
Amendment 30 #
Proposal for a regulation
Article 1 – paragraph 2
Article 1 – paragraph 2
(1) The Commission may designate aone or more replacement benchmarks for a critical benchmark that will cease to be published where the cessation of that publication may result in significant disruption in the functioning of financial markets in the Unionone or more Member States and provided that any of the following events has occurred:
Amendment 33 #
Proposal for a regulation
Article 1 – paragraph 2
Article 1 – paragraph 2
Regulation (EU) 2016/1011
Article 23a – paragraph 1 – point a
Article 23a – paragraph 1 – point a
(a) the competent authority for the administrator of that benchmark has issued a public statement, or has published information, in which it is announced that the capability of that benchmark to measure the underlying market or economic reality cannot be restored through the exercise of any of the remedial powers referred to in Article 23; Prior to making such an announcement, the NCA shall have applied the remedial powers of Article 23 and have determined that the powers in Article 23 are not sufficient to restore the benchmark.
Amendment 43 #
Proposal for a regulation
Article 1 – paragraph 2
Article 1 – paragraph 2
Regulation (EU) 2016/1011
Article 23a – paragraph 2 – point b a (new)
Article 23a – paragraph 2 – point b a (new)
(b a) A fallback provision shall not be deemed suitable where: a ) it does not cover the permanent cessation of a reference benchmark; b) any of the following conditions is fulfilled: (i) there is no fallback rate; (ii) the application of the fallback rate requires further consent from third parties; (iii) the fallback rate is calculated through quotes provided by third parties or fixes the last publication of the affected benchmark. c) the relevant authority has established that the application of the contractually agreed fallback provision does generally no longer, and with significant difference, reflect the underlying market or the economic reality that the ceasing benchmark is intended to measure, and could have an adverse impact on financial stability;
Amendment 45 #
Proposal for a regulation
Article 1 – paragraph 2
Article 1 – paragraph 2
Regulation (EU) 2016/1011
Article 23a – paragraph 3
Article 23a – paragraph 3
(3) The Commission shall adopt implementing acts to designate aone or more replacement benchmarks in accordance with the examination procedure referred to in Article 50(2) where one of the conditions laid down in paragraph 1 is fulfilled. When adopting the implementing act referred to in paragraph 1, the Commission shall take into account, where available, the recommendation by an alternative reference rate working group operating under the auspices of the central bank responsible for the currency in which the interest rates of the replacement benchmark are denominated. Before establishing a new replacement benchmark, the Commission shall conduct a public consultation and consult ESMA as well as the national competent authority of the benchmark administrator.
Amendment 46 #
Proposal for a regulation
Article 1 – paragraph 2
Article 1 – paragraph 2
Regulation (EU) 2016/1011
Article 23a – paragraph 3 a (new)
Article 23a – paragraph 3 a (new)
(3 a) The implementing act referenced in paragraph 3 shall include the following: (i) the replacement benchmark(s); (ii) the spread adjustment, including the method for determining such spread adjustment, that is to be applied to the benchmark in cessation on the date of the replacement for each particular term to account for the effects of the transition or change from the benchmark to be wound down to the replacement benchmark; (iii) the corresponding essential conforming changes that are associated with and reasonably necessary for the use or application of a replacement benchmark; (iv) the relevant date from which the replacement benchmark(s) shall apply;