[ParlTrack]

Aurore LALUCQ, Pedro MARQUES, René REPASI, Evelyn REGNER

Proposal for a regulation
Recital 3 a (new)

(3a) The clearing system must benefit from more clearing options and alternatives to ensure banks and the real economy have continuous access to safe and efficient clearing solutions. The EU must make a significant contribution by developing and offering safe, efficient and innovative clearing infrastructures. The evolution of clearing markets brings with it new product offerings, risk profiles and approaches to risk management. This requires supervisory and regulatory approaches to be adapted and regulators and the industry to work closely together

2023/07/07
Committee: ECON

Aurore LALUCQ, Pedro MARQUES, René REPASI, Evelyn REGNER

Proposal for a regulation
Recital 3 b (new)

(3b) The clearing system is evolving quickly. New financial products that support hedging activities by market participants and the real economy are being made available for clearing. New market participants are entering the clearing space, seeking to benefit from efficient and resilient post-trade mechanisms.

2023/07/07
Committee: ECON

Aurore LALUCQ, Pedro MARQUES, René REPASI, Evelyn REGNER, Paul TANG

Proposal for a regulation
Recital 6

(6) Given the fact that entities that are established in countries that are listed as high-risk third countries that have strategic deficiencies in their regime on anti-money laundering and counter terrorist financing, as referred to in Article 9 of Directive (EU) 2015/849 of the European Parliament and of the Council32 , or in third countries that are listed in Annex I and Annex II to the Council conclusions on the revised EU list of non- cooperative jurisdictions for tax purposes33 are subject to a less stringent regulatory environment, their operations may increase the risk, including due to increased counterparty credit risk and legal risk, for the Union financial stability. Consequently, such entities should not be eligible to be considered in the framework of intragroup transactions. __________________ 32 Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73). 33 Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes and the Annexes thereto (OJ C 413 I, 12.10.2021, p. 1).

2023/07/07
Committee: ECON

Aurore LALUCQ, Pedro MARQUES, René REPASI, Evelyn REGNER

Proposal for a regulation
Recital 10

~~(10)~~ It is necessary to address the ~~(10)~~ financial stability risks associated with excessive exposures of Union clearing members and clients to systemically important third-country CCPs (Tier 2 CCPs) that provide clearing services that have been identified by ESMA as clearing services of substantial systemic importance pursuant to Article 25(2c) of Regulation (EU) No 648/2012. In December 2021, ESMA concluded that the provision of certain clearing services provided by two Tier 2 CCPs, namely for interest rate derivatives denominated in euro and Polish zloty, Credit Default Swaps (CDS) denominated in euro and Short-Term Interest Rate Derivatives (STIR) denominated in euro, are of substantial systemic importance for the Union or one or more of its Member States. As noted by ESMA in its December 2021 assessment report, were those Tier 2 CCPs to face financial distress, changes to those CCPs’ eligible collateral, margins or haircuts may negatively impact the sovereign bond markets of one or more Member States, and more broadly the Union financial stability. As also noted by ESMA, there is a significant risk in the event of a financial crisis that Tier 2 CCPs or UK resolution authorities may take discretionary measures that could have a direct and adverse impact on EU clearing members. Furthermore, disruptions in markets relevant for monetary policy implementation may hamper the transmission mechanism critical to central banks of issue. It is therefore appropriate to require any financial counterparties and non-financial counterparties that are subject to the clearing obligation to hold, directly or indirectly, accounts with a minimum level of activity at CCPs established in the Union. That requirement should reduce the provision of those clearing services by those Tier 2 CCPs to a level where such clearing is no longer of substantial systemic importance.

2023/07/07
Committee: ECON

Aurore LALUCQ, Jonás FERNÁNDEZ, Pedro MARQUES, René REPASI, Evelyn REGNER, Paul TANG

Proposal for a regulation
Recital 11

(11) It is necessary to ensure that the calibration of the level of the clearing activity to be maintained in accounts at Union CCPs can be adapted to changing circumstances. ESMA has an important role in the assessment of the substantial systemic importance of third-country CCPs and their clearing services. ESMA, in cooperation with the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the ESRB, and after having consulted the European System of Central Banks (ESCB), should therefore develop draft regulatory technical standards specifying the details of the level of substantially systemicTo reduce financial stability risks and ensure that a sufficient level of clearing services ~~to be maintain~~are cleared in the in active accounts in Union CCPs by, financial and non-financial counterparties subject to the clearing obligation~~. Such calibration should not go beyond what is necess~~ should be required to cleary and proportionate to reduce clearing in the identified clearing services at Tier 2 CCPs concerned. In that regard, ESMA should consider the costs, risks and the burden such calibration entails for financial and non-financial counterparties, the impact on their competitiveness, and the risk that those costs are passed on to non-financial firms. Furthermore,t least 40 per cent in active accounts in Union CCPs. Two years after the entry into force of this Regulation, ESMA, in cooperation with the EBA, EIOPA and the ESRB and after consulting the ESMACB should ~~also ensu~~be required t~~hat the envisaged reduction in clearing in those instruments, identifie~~o undertake an assessment whether this quantitative threshold has ~~of substantial systemic importance, results in them no longer being considered of~~led to a sufficient reduction of excessive exposures in substantially systemic ~~importance when ESMA reviews the recognition of~~clearing services offered by the relevant CCPs which according to Article 25(5) of that Regulation and where such a review should be done at least every five years. In addition, suitable phase-in periods for the progressive implementation of the requirement to hold a certain level of the clearing activity in the accounts at Union CCPs Tier 2 CCPs to the extent necessary to safeguard financial stability. Following this assessment, the European Commission may be empowered to adopt a delegated act to increase this quantitative threshould ~~be foreseen~~.

2023/07/07
Committee: ECON

Aurore LALUCQ, Pedro MARQUES, René REPASI, Evelyn REGNER, Paul TANG

Proposal for a regulation
Recital 12

(12) To ensure that clients are aware of their options and can take an informed decision as where to clear their derivative contracts, clearing members and clients that provide clearing services in both Union and recognised third-country CCPs should inform their clients about the option to clear a derivative contract in a Union CCP so that clearing in those services identified as of substantial systemic importance is reduced in Tier 2 CCPs in order to ensure the financial stability of the Union. However, this obligation to inform clients should be distinct from the active account requirement. Relevant clearing members should also systematically propose Union clearing alternatives to clients even for services that are not determined as being of substantial systemic importance by the European Securities and Markets Authority (ESMA).

2023/07/07
Committee: ECON

Aurore LALUCQ, Pedro MARQUES, René REPASI, Evelyn REGNER

Proposal for a regulation
Recital 26

(26) ESMA should have the means to identify potential risks to the Union’s financial stability. ESMA should therefore, in cooperation with the ESRB, EBA, EIOPA, and the ECB in the framework of the tasks concerning the prudential supervision of credit institutions within the single supervisory mechanism conferred upon it in accordance with Council Regulation (EU) No 1024/201336 , identify the interconnections and interdependencies between different CCPs and legal persons, including shared clearing members, clients and indirect clients, shared material service providers, shared material liquidity providers, cross-collateral arrangements, cross-default provisions and cross-CCP netting, cross-guarantee agreements and risks transfers and back-to-back trading arrangements. __________________ 36 […]

2023/07/07
Committee: ECON

Aurore LALUCQ, Pedro MARQUES, René REPASI, Evelyn REGNER

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

Regulation (EU) No 648/2012
Article 3 – paragraph 4 – point b

(b) where the third country is listed in Annex I and Annex II to the Council conclusions on the revised EU list of non- cooperative jurisdictions for tax purposes*2 and their subsequent updates which are specifically approved twice a year, customarily in February and October, and published in series C of the Official Journal of the European Union.

2023/07/07
Committee: ECON

Aurore LALUCQ, Pedro MARQUES, René REPASI, Evelyn REGNER

Proposal for a regulation
Article 1 – paragraph 1 – point 3

Regulation (EU) No 648/2012
Article 4 a – paragraph 3 − subparagraph 1

(3) in Article 4a(3), the first subparagraph is replaced by the following: ‘ In calculating the positions referred to in paragraph 1, the financial counterparty shall include all OTC derivative contracts that are not cleared in a CCP authorised under Article 14 or recognised under Article 25, entered into by that financial counterparty or entered into by other entities within the group to which that financial counterparty belongs.; ’deleted

2023/07/07
Committee: ECON

Aurore LALUCQ, Jonás FERNÁNDEZ, Pedro MARQUES, René REPASI, Evelyn REGNER, Paul TANG