39 Amendments of Olle SCHMIDT related to 2013/0314(COD)
Amendment 140 #
Proposal for a regulation
Recital 8
Recital 8
(8) The scope of this Regulation should be as broadappropriate as necessary to create a preventive regulatory framework. The production of benchmarks involves discretion in their determination and is inherently subject to certain types of conflicts of interest, which implies the existence of opportunities and incentives to manipulate those benchmarks. These risk factors vare common to ally among benchmarks, and all of them should be made subject to adequate governance and control requirements. Since the vulnerability and importance of a benchmark varies over time, restricting the scope by reference to currently important or vulnerable indices would not address the risks that any benchmark may pose in the future. In particular, benchmarks that are currently not widely used may be so used in the future, so that, in their regard, even a minor manipulation may have significant impact.
Amendment 146 #
Proposal for a regulation
Recital 9
Recital 9
(9) The critical determinant of the scope of this Regulation should be whether the output value of the benchmark that determines the value of a financial instrument, financial contract or measures the performance of an investment fund can be manipulated. Therefore the scope should not be dependent on the nature of the input data. Benchmarks calculated from economic input data, such as share prices and non- economic number or values such as weather parameters should thus be included. The framework should cover those benchmarks subject to these risks, but should also provide for a proportionate response to the risks that different benchmarks pose. This Regulation should therefore cover all benchmarks which are used to price financial instruments listed or traded on regulated venues.
Amendment 152 #
Proposal for a regulation
Recital 11 a (new)
Recital 11 a (new)
(11 a) For the purposes of this Regulation, made available to the public does not include customized/bespoke indices created and agreed as a combination and/or modification of existing public indices on the request of one or a very limited number of market participants are not subject to this Regulation.
Amendment 180 #
Proposal for a regulation
Recital 30 a (new)
Recital 30 a (new)
(30 a) Benchmarks mainly used within smaller currency areas and with a limited number of contributors, are to be considered as non-critical. These benchmarks are to be supervised by the local authorities, using the IOSCO principles as the common reference. The competent authority will, after consulting ESMA, decide whether a benchmark is to be considered as critical or non-critical.
Amendment 187 #
Proposal for a regulation
Recital 34
Recital 34
(34) The market for benchmarks is global. Participants, such as administrators, contributors and users, as well as the input data, come from within and outside the European Union. This Regulation should take into account the Principles for financial benchmarks issued by the International Organization of Securities Commissions (IOSCO) (hereinafter referred to as ‘IOSCO Principles’) on the 17 July 2013 which serve as a global standard for regulatory requirements for benchmarks. It is necessary for investor protection that an assessment that the supervisions and regulation in any third country are equivalent to Union supervision and regulation of benchmarks takes place before any benchmark provided from that third country can be used in the Union.
Amendment 227 #
Proposal for a regulation
Article 3 – paragraph 1 – point 2
Article 3 – paragraph 1 – point 2
(2) ‘benchmark’ means any index by reference to which the amount payable under a financial instrument or a financial contract, or the value of a financial instrument is determined or an index that is used to measure thwhose performance of an investment fund strategy seeks to track or replicate;
Amendment 245 #
Proposal for a regulation
Article 3 – paragraph 1 – point 11
Article 3 – paragraph 1 – point 11
(11) ‘regulated data’ means input data that is contributed directly from: (a) a trading venue as defined in point (25) of paragraph 1 of Article 2 of [MIFIR]; or (b) approved publication arrangement as defined in point (18) of paragraph 1 of Article 2 of [MIFIR ] or an approved reporting arrangement as defined in point (20) of paragraph 1 of Article 2 of [MIFIR] in accordance with mandatory post trade data requirements; or (c) a central counterparty, as defined in and authorized in accordance with Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (EMIR); or (d) an electricity exchange as referred to in point (j) of paragraph 1 of Article 37 of Directive 2009/72/EC19 or (e) a natural gas exchange as referred to in point (j) of paragraph 1 of Article 41 of Directive 2009/73/EC20 or (f) an auction platform referred to in Article 26 or in Article 30 of Regulation (EU) No 1031/2010 of the European Parliament and of the Council; __________________ 19 OJ L 211, 14.8.2009, p. 55. 20 OJ L 9, 14.8.2009, p. 112.
Amendment 267 #
Proposal for a regulation
Article 3 – paragraph 1 – point 21
Article 3 – paragraph 1 – point 21
(21) ‘critical benchmark’ means a benchmark,: a) the majority of contributors to which are supervised entities and that reference financial instruments having a notional value of at least 500 billion euro;; (b) that does not include benchmarks compiled from regulated data as defined in point (11); and (c) that reference financial instruments admitted to trading or traded on at least one Union trading venue, or other financial assets as defined in international accounting standard IAS 32, having a notional cumulative amount of at least 500 billion euro on such Union trading venues; (d) that is widely used on the international markets and (e) for which there is no reasonable substitute so that cessation of the benchmark would have a significant adverse impact on financial stability, the orderly functioning of the markets, consumers or the real economy.
Amendment 276 #
Proposal for a regulation
Article 3 – paragraph 2 – subparagraph 1
Article 3 – paragraph 2 – subparagraph 1
The Commission shall be empowered to adopt delegated acts in accordance with Article 37 with a view to specify further technical elements of the definitions laid down in paragraph 1, in particular specifying: (a) what constitutes making available to the public for the purposes of the definition of an index,; and (b) excluding regulated data based on a single security which acts as a reference price for settlement purposes only. These shall be updated annually in order to take account of market, regulatory or technological developments.
Amendment 284 #
Proposal for a regulation
Article 5 – paragraph 1 – subparagraph 1 – point d a (new)
Article 5 – paragraph 1 – subparagraph 1 – point d a (new)
(d a) the extent to which governance requirements are proportionate to achieve the aims of this Regulation.
Amendment 287 #
Proposal for a regulation
Article 5 – paragraph 2
Article 5 – paragraph 2
2. An administrator shall comply with the governance and control requirements set out in Section A of Annex 1, in a manner that is proportionate to the nature and significance of each benchmark.
Amendment 290 #
Proposal for a regulation
Article 5 – paragraph 3 – point c a (new)
Article 5 – paragraph 3 – point c a (new)
(c a) already existing legislation applicable to certain administrators.
Amendment 291 #
Proposal for a regulation
Article 5 – paragraph 3 – point c b (new)
Article 5 – paragraph 3 – point c b (new)
(c b) the IOSCO principles.
Amendment 301 #
Proposal for a regulation
Article 7 – paragraph 1 – subparagraph 1 – point a – paragraph 1
Article 7 – paragraph 1 – subparagraph 1 – point a – paragraph 1
The input data shall be transaction data. If available transaction data is not sufficient to represent accurately and reliably the market or economic reality that the benchmark is intended to measure, input data which is not transaction data may be used provided that such data is verifiable. If such data is not verifiable, it may still be used, provided the administrator publishes information about this fact.
Amendment 315 #
Proposal for a regulation
Article 8 – paragraph 2 – introductory part
Article 8 – paragraph 2 – introductory part
2. The administrator shall monitor the input data and contributorensure that the contributors have adequate systems and effective controls in order to identify breaches of the [Market Abuse Regulation] and systems to notify the relevant competent authority of any conduct that may involve manipulation or attempted manipulation of the benchmark and notify the relevant competent authority in accordance with Article 11(2) of the [Market Abuse Regulation] and provide all relevant information where it suspects that, in relation to the benchmark, there has been:
Amendment 319 #
Proposal for a regulation
Article 8 – paragraph 3 a (new)
Article 8 – paragraph 3 a (new)
3 a. In accordance with Article 29(1) of the [Market Abuse Regulation], employees can report actual or potential breaches of this Regulation through a mechanism of the national competent authorities.
Amendment 329 #
Proposal for a regulation
Article 9 – paragraph 2
Article 9 – paragraph 2
2. The code of conduct shall be signed by the administrator and the contributors and shall be legally binding on all parties to ipublish a confirmation of compliance with the Code of conduct.
Amendment 336 #
Proposal for a regulation
Article 10 – paragraph 1
Article 10 – paragraph 1
1. When the input data contributed to a benchmark is regulated data, Articles 7(1)(b), 8(1), 8(2) and, Article 9 and Annex I, section A, points 6-8 shall not apply.
Amendment 355 #
Proposal for a regulation
Article 12 – paragraph 1
Article 12 – paragraph 1
1. In addition to the requirements of the Title II, the specific requirements set out in Aannex II shall apply to critical inter-bank interest rate benchmarks. When it comes to non-critical benchmarks in non-eurozone Member States the requirements set out in Annex II shall apply in accordance with decisions by the national competent authority.
Amendment 417 #
Proposal for a regulation
Article 15 – paragraph 1 – point b
Article 15 – paragraph 1 – point b
Amendment 460 #
Proposal for a regulation
Article 20 – paragraph 1 – point a
Article 20 – paragraph 1 – point a
(a) (a) For critical benchmarks, the Commission has adopted an equivalence decision in accordance with paragraph 2, recognising the legal framework and supervisory practice of that third country as equivalent to the requirements of this Regulation; or
Amendment 463 #
Proposal for a regulation
Article 20 – paragraph 1 – point b
Article 20 – paragraph 1 – point b
(b) (b) the administrator is authorised or registered in, and is subject to supervision in, that third country;has been assessed as compliant with IOSCO principles for financial benchmarks by IOSCO or by ESMA, following nomination by a supervised entity, competent authority or benchmark administrators.
Amendment 466 #
Proposal for a regulation
Article 20 – paragraph 1 – point c
Article 20 – paragraph 1 – point c
Amendment 470 #
Proposal for a regulation
Article 20 – paragraph 1 – point d
Article 20 – paragraph 1 – point d
Amendment 473 #
Proposal for a regulation
Article 20 – paragraph 1 – point e
Article 20 – paragraph 1 – point e
Amendment 474 #
Proposal for a regulation
Article 20 – paragraph 1 a (new)
Article 20 – paragraph 1 a (new)
1a. 1a. In addition, competent authorities should ensure that: (a) the administrator is authorised or registered in, and is subject to supervision in, that third country; (b) the administrator has notified ESMA of its consent that its actual or prospective benchmarks may be used by supervised entities in the Union, the list of the benchmarks which may be used in the Union and the competent authority responsible for its supervision in the third country; (c) the administrator is duly registered under Article 21; and (d) the cooperation arrangements referred to in paragraph 3 of this Article are operational.
Amendment 479 #
Proposal for a regulation
Article 20 – paragraph 2 – subparagraph 1 – point a
Article 20 – paragraph 2 – subparagraph 1 – point a
(a) administrators of at least critical benchmarks authorised or registered in that third country comply with binding requirements whichose outcomes are equivalent to the requirementoutcomes resulting from this Regulation, in particular taking into account if the legal framework and supervisory practice of a third country ensures compliance with the IOSCO principles on financial benchmarks published on 17 July 2013; and
Amendment 481 #
Proposal for a regulation
Article 20 – paragraph 2 – subparagraph 1 – point b
Article 20 – paragraph 2 – subparagraph 1 – point b
(b) the binding requirements are subject to effective supervision and enforcement on an on- going basis in that third country.
Amendment 502 #
Proposal for a regulation
Article 24 – paragraph 1 – point d a (new)
Article 24 – paragraph 1 – point d a (new)
(da) has transferred the functions as administrator of its benchmarks to another administrator who is properly authorised.
Amendment 568 #
Proposal for a regulation
Article 39 – paragraph 1
Article 39 – paragraph 1
1. An administrator providing a benchmark on [the date of entry into force of this Regulation] shall apply for authorisation under Article 23 or register with ESMA under Article 21 within [24 months after the date of application].
Amendment 570 #
Proposal for a regulation
Article 39 – paragraph 1 a (new)
Article 39 – paragraph 1 a (new)
1a. By the date of application of this Regulation, the Commission shall adopt equivalence decisions for third countries where benchmarks widely used in the Union are produced and publish a list of third country benchmarks that can be used based on compliance with IOSCO principles.
Amendment 572 #
Proposal for a regulation
Article 39 – paragraph 2
Article 39 – paragraph 2
2. An administrator that submitted an application for authorisation in accordance with paragraph 1 or which is subject to an equivalence decision or assessment under Article 20 may continue to produce an existing benchmark unless and until such authorisation is refused. Supervised entities may continue to reference such benchmarks unless or until such authorization or recognition is refused.
Amendment 582 #
Proposal for a regulation
Article 41 – paragraph 2
Article 41 – paragraph 2
It shall apply from [12 months after entry into force]the publication of the delegated acts issued by the Commission and the technical standards issued by ESMA.
Amendment 586 #
Proposal for a regulation
Annex 1 – section 1 – part I – point 6
Annex 1 – section 1 – part I – point 6
6. Points 7 and 8 of this section apply to critical benchmarks where input data is contributed from a front office function which means any department, division, group, or personnel of contributors or any of its affiliates that performs any pricing trading, sales, marketing, advertising, solicitation, structuring, or brokerage activitiesand input data is not regulated data.
Amendment 587 #
Proposal for a regulation
Annex 1 – section 1 – part I – point 6 a (new)
Annex 1 – section 1 – part I – point 6 a (new)
6a. Front office function means any department, division, group, or personnel of contributors or any of its affiliates that performs any pricing trading, sales, marketing, advertising, solicitation, structuring, or brokerage activities.
Amendment 588 #
Proposal for a regulation
Annex 1 – section 1 – part I – point 7
Annex 1 – section 1 – part I – point 7
7. Where Administrators receive input data from employees of a front office function, the Administrator shall, where available, obtain data from other sources that can corroborate that input data.
Amendment 590 #
Proposal for a regulation
Annex 1 – section 1 – part I – point 8 – point a
Annex 1 – section 1 – part I – point 8 – point a
(a) There is validation of input before or where necessary as soon as practicable after it is used in the determination of a benchmark including procedures for multiple reviews by senior staff to check inputs and internal sign off procedures by management for submitting inputs;
Amendment 621 #
Proposal for a regulation
Annex 1 – section 3 – part I – point 1 – point c a (new)
Annex 1 – section 3 – part I – point 1 – point c a (new)
(ca) a process for controlling the existence of systems for identification of potential breaches of the [Market Abuse Regulation or Directive] and a whistleblowing procedure.
Amendment 642 #
Proposal for a regulation
Annex 2 – point 16 – point d
Annex 2 – point 16 – point d
(d) effective conflicts of interest management procedures and communication controls, both within contributors and between contributors and other third parties, to avoid any inappropriate external influence over those responsible for submitting rates. Submitters shall work in locations physically separated from interest rate derivatives traders;