BETA

95 Amendments of Sari ESSAYAH related to 2012/0029(COD)

Proposal for a regulation
Recital 1 a (new)

(1 a) The creation of an integrated market for securities settlement, with no distinction between national and cross- border securities transactions needs to be the target for the proper functioning of the internal market. Market-driven transformation from national settlement systems into a more integrated market has, for various reasons, proven to be very slow. It is assumed that operation of securities settlement systems needs to be more open to competition and user participation to allow for faster market driven development of more efficient settlement models and interoperability standards. While this Regulation focuses mainly in increasing competition and addressing systemic risks, it is acknowledged that it takes only the first step towards a fully integrated post-trade environment. Therefore an end-date should be given for the transfer. However, before taking further steps, the development of the settlement efficiency and best practices needs to take place in a market-driven way. Securities in book- entry form should be able to be processed in an efficient, timely way with no overlapping processes and ensuring efficient information for the different needs of public authorities. Inspiration may also be sought from the development of the single European payments area where the same is being achieved in transactions with money.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 2

(2) Due to their key position ~~at the end of~~in the settlement process, the securities settlement systems operated by CSDs are of a systemic importance for the functioning of securities markets. Being ~~situated at the top of the securities holding chain through which their participants report the securities holdings of investor~~in charge of maintaining the top of the securities accounts, the securities settlement systems and account systems operated by CSDs also serve as an essential tool to control the integrity of an issue, that is, hindering undue creation or reduction of issued securities and thereby playing an important role in maintaining investor confidence. Moreover, securities settlement systems operated by CSDs are closely involved in ~~the~~securing collateral~~isation of~~ for monetary policy operations as well as in the collateralisation process between credit institutions and are, therefore, important actors in the collateral ~~market~~isation processes.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 5

(5) An open internal market in securities needs to provide complete reachability, meaning that any investor can invest in all EU securities with the same ease and by using the same familiar processes as for domestic securities. It should be sufficient for an investor to use the services of one custodian in order to invest in any EU securities. It is necessary to lay down in a Regulation a number of uniform obligations to be imposed on market participants regarding certain aspects of the settlement ~~cycle~~process and discipline and to provide a set of common requirements for CSDs operating securities settlement systems. The directly applicable rules of a Regulation should ensure that all market operators and CSDs are subject to identical directly applicable obligations, standards and rules. A Regulation should increase the safety and efficiency of settlement in the Union by preventing any diverging national rules as a result of the transposition of a directive. A Regulation should reduce the regulatory complexity for market operators and CSDs resulting from different national rules and should allow CSDs to provide their services on a cross-border basis without having to comply with different sets of national requirements such as those concerning the authorisation, supervision, organisation or risks of CSDs. A Regulation imposing identical requirements on CSDs should also contribute to eliminating competitive distortions.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 9

(9) Member States' central banks or any other bodies performing similar functions in certain Member States, such as the Member States national bodies charged with or intervening in the management of the public debt may themselves provide a number of services which would qualify them as a CSD. Such institutions should be exempt from the authorisation and supervision requirements, but should remain subject to the ~~full~~appropriate set of prudential requirements for CSDs. Since central banks act as settlement agents for the purpose of settlement, they should also be exempt from the requirements set out in Title IV of this Regulation.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 11

(11) The recording of securities in book- entry form is an important step to increase the efficiency ~~of settlement and~~and security of holding securities and of settling securities transactions. It is also helpful in ensureing the integrity of a securities issue~~, e~~. Especially in a growing cross-border context ofwith an increasing complexity of holding and transfer methods, electronic registrations and updates are essential. For reasons of safety, this Regulation provides for the recording in book-entry form of all transferable securities. This Regulation should not impose one particular method for the initial book-entry recording, which may take the form of immobilisation through the issuance of a global note or of immediate dematerialisation. This Regulation should not impose the type of institution that should record securities in book-entry form upon issuance and permits different actors, including registrars, to perform this function. However, once such securities are traded on trading venues regulated by Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC or provided as collateral under the conditions of Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements, such securities should be recorded in a CSD book-entry system in order to ensure, inter alia, that all such securities can be settled in a securities settlement system, such securities should be recorded in a CSD book-entry system based on a strict agreement between the CSD and initial issuing actor in order to ensure, inter alia, that all such securities can be settled in a securities settlement system. This regulation will not impose the type of holding model, direct or omnibus model or a mix of the two, maintained by the CSDs.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 13

(13) ~~Longer~~The length of the settlement periods of transactions in transferable securities cause uncertainty and increased risk for securities settlement systems participants. Different durations of settlement periods across Member States hamper reconciliation and are sources of errors for issuers, investors and intermediaries. It is therefore necessary to provide a maximum common settlement period which would facilitate the identification of the intended settlement date and facilitate the implementation of settlement discipline measures. The intended settlement date of transactions in transferable securities which are admitted to trading on trading venues regulated by Directive 2004/39/EC should be no later than on the second business day after the trading takes place. After 2017 this should be shortened to one business day after the trading takes place and after 2020 the settlement should be done on the same day the trading takes place. Parties to transactions may agree bilaterally upon shorter and longer delivery times. Plain free-of-payment transfers should be booked the next business-day, if not otherwise agreed with the sending client, but after 2020 this should also take place on the same day.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 19

(19) Any legal person ~~falling within the defini~~providing core CSD services as defined in section A of ~~a CSD~~the Annex needs to be authorised by the competent national authorities before starting its activities. In view of taking into account different business models, a CSD shcould ~~be defined by reference to certain~~provide a mix of core services, which consist of settlement, implying the operation of a securities settlement system, ~~notary~~initial issuance of securities and central securities accounts maintenance services. A CSD should at least operate a securities settlement system and ~~provide one other core service~~maintain securities accounts at the top tier level. CSDs should be able to outsource the operations of the services provided. Thise definition of a CSD should exclude, therefore, entities which do not operate securities settlement systems such as registrars or public authorities and bodies in charge of a registry system established under Directive 2003/87/EC. This combination is essential for CSDs to play their role in the securities settlement and in ensuring the integrity of a securities issue.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 22

(22) ~~Without prejudice to specific requirements of Member States tax legislation,~~ CSDs should be authorised to provide services ancillary to their core services that contribute to enhancing the safety, efficiency and transparency of the internal market in securitie~~s market~~s. Where the provision of such services relates to withholding tax procedures, it will continue to be carried out in accordance with the legislation of the Member States concerned. The CSDs should also fulfil the tax related information and data collection requirements of the Member States of the issuers served.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 24 a (new)

(24 a) This regulation should have the objective to increase competition, reduce cross-border barriers and improve EU- wide reachability among participants, custodians and end investors in order to serve the whole EU area and internal market. Important features supporting these objectives are free cross-border service provision and efficient infrastructural links among CSDs and towards other entities.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 33

(33) The requirement that the settlement in commercial bank money of the cash leg of the securities transaction be carried out by a separate legal entity acting as settlement agent is an important measure to increase the safety and resilience of CSDs. Such a separation between core services of CSDs and banking services ancillary to settlement appears indeed indispensible for eliminating any danger of transmission of the risks from the banking services, such as credit and liquidity risks, to the provision of core services of CSDs. There are no less intrusive measures available for eliminating those credit and liquidity risks in order to ensure the envisaged level of safety and resilience of CSDs. However, in order to secure the efficiencies resulting from the provision of both CSD and banking services within the same group of undertakings, the requirement that banking services be carried out by a separate credit institution should not prevent that credit institution from belonging to the same group of undertakings as the CSD. If both CSD and banking services are provided within the same group of undertakings, in order to increase the safety and efficiency of the services provided, the activities of the credit institution providing banking services in connection to CSD services should be limited to the provision of banking services ancillary to settlement. Furthermore, a derogation to the obligation to separate banking services ancillary to settlement from core CSD services should be available in the absence of any danger of transmission of credit and liquidity risks from the banking services to the provision of core services of CSDs. In order to ensure a consistent application of the possibility to derogate from the obligation on CSDs not to provide any banking type of ancillary services, the Commission should be empowered to decide, at the request of a national competent authority, whether any such derogation is permitted in view of the absence of systemic risk incurred by the provision of both CSD core and banking services by the same legal entity. In any case, the activities of a CSD benefiting from any such derogation and authorised as a credit institution should be limited exclusively to the provision of banking services ancillary to settlement.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 36

(36) As operators of securities settlement systems, CSDs perform a key role in the process of transferring securities on securities accounts. In order to enhance legal certainty especially in a cross-border context, it is important to establish clear rules on the law applicable to ownership aspects in relation to the securities that are maintained by a CSD in its accounts. Following the approach taken by the existing conflict of laws rules, the applicable law should be the law of the place where the accounts of a CSD are maintained. The CSD should inform all concerned parties about the applicable law.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 49

(49) The Commission should be empowered to adopt regulatory technical standards in accordance with Article 290 of the Treaty on the Functioning of the European Union and with the procedure set out in Articles 10 to 14 of Regulation (EU) No 1095/2010 with regard to the detailed elements of the settlement discipline measures; the information and other elements to be included by a CSD in its application for authorisation; the information that different authorities shall supply each other when supervising the CSDs; the details of the cooperation arrangements between home and host authorities; the elements of the governance arrangements for CSDs; the details of the records to be kept by CSDs; the details of the measures to be taken by CSDs so that the integrity of the issue is maintained; the protection of the participants‘ securities; the timely achievement of settlement; the mitigation of the operational risks and of the risks derived from the CSD links; the details of the capital requirements for CSDs; the details of the prudential requirements on credit and liquidity risks for the designated credit institutions. The regulatory technical standards addressing the information that different authorities should supply to each other when supervising the CSDs and the details of the cooperation arrangements between home and host authorities should be established by ESMA in close-cooperation with the members of the ESCB.

2012/11/12
Committee: ECON

Proposal for a regulation
Recital 50

(50) The Commission should also be empowered to adopt implementing technical standards by means of implementing acts pursuant to Article 291 of Treaty on the Functioning of the European Union and in accordance with the procedure set out in Article 15 of Regulation (EU) No 1095/2010 with regard to standard forms and templates for the application for authorisation by CSDs; for the provision of information between different competent authorities for the purposes of supervision of CSDs; for the relevant cooperation arrangements between home and host authorities; for formats of records to be kept by CSDs; for the procedures in cases when a participant or an issuer is denied access to a CSD, CSDs are denied access between themselves or between CSDs and other market infrastructures; for the consultation of different authorities prior to granting authorisation to a settlement agent. The regulatory technical standards addressing the provision of information between different competent authorities for the purposes of supervision of CSDs, the relevant cooperation arrangements between home and host authorities and the procedures in cases when a participant or an issuer is denied access to a CSD, CSDs are denied access between themselves or between CSDs and other market infrastructures shall be established by ESMA in close cooperation with the members of the ESCB.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1

1. This Regulation lays down uniform requirements for initial recording of securities in book-entry systems, maintaining securities account at the top tier level and the settlement of financial instruments in the Union and rules on the organisation and conduct of central securities depositories to promote safe and smooth settlement.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 2

2. This Regulation applies to the recordings at CSD-level and the settlement of all financial instruments and activities of CSDs unless otherwise specified in the provisions of this Regulation.

2012/11/12
Committee: ECON

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

(1) ‘central securities depository’ (‘CSD’) means a legal person that ~~operates a securities settlement system listed in point 3 of Section A of the Annex and performs at least one o~~provides ther core services listed in Section A of the Annex;

2012/11/12
Committee: ECON

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

(2) ‘settlement’ means the completion of a securities transaction wherever it is concluded with the aim of discharging the obligations of parti~~cipants~~es to a transaction through the transfer of funds or securities or both;

2012/11/12
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1 – point 6

(6) ‘settlement fail’ means the non- occurrence of settlement or only partial settlement of a securities transaction on the intended settlement date ~~due to a lack of securities or cash~~, regardless of the underlying cause;

2012/11/12
Committee: ECON

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

(10) ‘participant’ means any participant, as defined in point (f) of Article 2 of Directive 98/26/EC, including a CCP, to a securities settlement system;, which as a financial service provider administers recordings at the top tier level within the CSD on behalf of itself or its investor clients in the form of omnibus-, segregated or direct holdings.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1 – point 20

(20) ‘standard link ~~access~~’ means a CSD link whereby a CSD is connected to another CSD as any other participant to the securities settlement system operated by the latter, and whereby the CSDs might agree to customise some aspects of their connectivity, such as communication standards and reporting, without this customisation resulting in any transfer of additional risk;

2012/11/12
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1 – point 21

(21) ‘customised link ~~access~~’ means a CSD link whereby a CSD provides specific services to another CSD distinct from the services provided to other participants to its securities settlement system and which results in additional risks;

2012/11/12
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1 – point 22

(22) ‘interoperab~~ility~~le links’ means ~~CSD links whereby the securitie~~a set of reciprocal contractual and technical arrangements sbet~~tlement systems operated by CSDs become interoperable as defined in point (o) of Article 2 of Directive 98/26/EC~~ween two or more CSDs to provide facilities for delivery versus payment settlement between the linked CSDs' participants;

2012/11/12
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 2

2. Where the securities referred to in paragraph 1 are traded on regulated markets, traded on multilateral trading facilities (MTFs) or organised trading facilities (OTFs) or are transferred following a financial collateral arrangement as defined in point (a) of Article 2 of Directive 2002/47/EC, those securities shall be recorded in book-entry form in a CSD prior to the trade date, unless they have already been so recorded, those securities shall be recorded in book-entry form in a CSD on or before the intended settlement date.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 4 – paragraph 3

3. Member States‘ authorities responsible for the application of Directive 2002/47/EC shall be competent for ensuring that Article 3(2) of this Regulation is applied when the securities referred to in Article 3(1) of this Regulation are transferred following a financial collateral arrangement as defined in point (a) of Article 2 of Directive 2002/47/EC.deleted

2012/11/12
Committee: ECON

Proposal for a regulation
Article 5 – paragraph 2

2. As regards transferable securities referred to in paragraph 1 which are traded on regulated markets, MTFs or OTFs, the intended settlement date shall be no later than on the second business day after the trading takes place. By 1 February 2017, the end investor shall also be entitled to require, for transferrable securities referred to in the first subparagraph, that settlement takes place on the trade date or on the business day following the trade date. Trading venues and securities settlement systems shall provide this option to participants. By 1 February 2020,trading venues and securities settlement systems shall, for transferrable securities referred to in the first subparagraph, provide for immediate, real-time settlement during the trade date where requested by the end- investor.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 5 – paragraph 2 a (new)

2 a. By 1 February 2017, securities settlement systems shall provide for immediate, real-time settlement during the trade date. From that date, securities settlement systems may offer only immediate real- time settlement. However, they may provide for settlement on up to two business days after the trade date where requested by an end-investor..

2012/11/12
Committee: ECON

Proposal for a regulation
Article 5 – paragraph 2 b (new)

2 b. By 1 February 2017, market makers shall provide trading offers subject to settlement on the trade date or no later than on the second business day after trading takes place.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 5 – paragraph 3

3. The relevant authorityies of the Member States whose law applies to the securities settlement system operated by a CSD and any involved regulated markets and trading venues shall be competent for ensuring that paragraphs 1, 2 and 2a are applied.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 6 – paragraph 2

2. For each securities settlement system it operates, a CSD shall establish procedures that facilitate the settlements of transactions in financial instruments referred to in Article 5(1) on the intended settlement date. It shall promote early settlement on the intended settlement date through appropriate mechanisms~~, such as a progressive tariff structure~~.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 6 – paragraph 3

3. For each securities settlement system it operates, a CSD shall establish monitoring tools that allow it or its participants to identify in advance settlements of transactions in financial instruments referred to in Article 5(1) that ~~are most likely to fail and it shall require participants~~contain an increased risk to fail and the CSD and its participants shall inform each other about such transactions as early as possible. The CSD and its participants shall have in place procedures to ensure they are able to settle such transactions on the intended settlement date.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 7 – paragraph 1

1. For each securities settlement system it operates, a CSD shall establish a system that monitors settlement fails of transactions in financial instruments referred to in Article 5(1). It shall provide regular reports ~~to the competent authority and to any person with a legiti~~which should be matde ~~interest as to the number and details of settlement fails and any other relevant information. The competent authorities shall share with ESMA any relevant information on settlement fails~~publically available on the website of the CSD.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 8 – paragraph 1

1. The relevant authority of the Member State whose law applies to the securities settlement system operated by a CSD shall be competent for ensuring that Articles 6 and 7 are applied and for monitoring the penalties imposed, in close cooperation with the competent authorities of Member States to which markets the CSD provides services of substantial importance as well as with authorities competent for the supervision and oversight of the regulated markets, MTFs, OTFs, and CCPs referred to in Article 7. In particular, the authorities shall monitor the application of penalties referred to in Article 7 (2) and (4) and of the measures referred to in Article 7(6).

2012/11/12
Committee: ECON

Proposal for a regulation
Article 11 – paragraph 1 – point b a (new)

(b a) where applicable, the central bank of the Member State to which market the CSD provides services of substantial importance.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 11 – paragraph 1 – point b b (new)

(b b) where applicable, the supervisory authorities of the Member State to which market the CSD provides services of substantial importance.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 11 – paragraph 1 – point b c (new)

(b c) where applicable, the relevant Ministries of the Member State to which market the CSD provides services of substantial importance.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 2

2. The authorisation shall ~~specify~~cover all the services set out in Section~~s A and~~ B of the Annex, ~~which the CSD is authorised to provide.~~ and specify which services the CSD intends to provide. Whenever a CSD intends to offer a new service not provided at the time of the initial authorisation, it shall notify the competent authority with a view to update the ESMA register in accordance with Article 19. Where this new service is not explicitly listed in Section B of the Annex, it shall request prior authorisation from the competent authority.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 2

2. Securities settlement s~~ystem~~ervices on the top- tier level of securities accounts may be ~~operat~~provided only by authorised CSDs ~~and central ban~~, central banks and other public entities assigned with CSD-related tasks.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 1 – point d

(d) setting up a~~ny CSD link~~ non-interoperable CSD link or an interoperable link without employing the ESMA standards established in Article 32.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 4

4. The competent authority may limit the withdrawal to a particular service, activity, or financial instrument or for a given period of time.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 1

1. The competent authority shall, at least on an annual basis, review the arrangements, strategies, processes and mechanisms implemented by a CSD with respect to compliance with this Regulation and evaluate the risks to which the CSD is, or might be, exposed as well as the impact of the CSD on the markets it serves.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 4

4. When performing the review and evaluation referred to in paragraph 1, the competent authority shall consult at an early stage the relevant authorities referred to in Article 11 concerning the functioning of the securities settlement systems operated and other services provided by the CSD.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 6

6. When performing the review and evaluation referred to in paragraph 1, the competent authorities responsible for supervising CSDs ~~which maintain the types of relations referred to in points (a), (b) and (c) of the first subparagraph of~~and the relevant authorities in Article 1~~5(5)~~1 shall supply one another with all relevant information that is likely to facilitate their tasks.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 1

1. A CSD authorised under this Regulation is free to provide services covered by its specific authorisation directly in the different Member States of the Union. An authorised CSD may also carry out its activities within the territory of the Union~~, either~~ by the establishment of a branch ~~or by way of direct provision of services~~, provided that the types of activities concerned are covered by the authorisation.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 2 – introductory part

2. Any CSD wishing to ~~provide its services~~establish a branch within the territory of another Member State for the first time, or to change the range of services provided by that branch, shall communicate the following information to the competent authority of the Member State where it is established and to relevant authorities referred to in Article 11:

2012/11/12
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 2 – point c

(c) ~~in case of a branch,~~ the organisational structure of the branch and the names of those responsible for the management of the branch.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 5 – point b

(b) in the absence of any receipt of a communication, after two months from the date of transmission of the communication referred to in paragraph 3. Where the services provided in the host Member State are considered substantial by the competent authority in the host Member State, the latter may subject the authorisation to a specific assessment conducted by itself. In case of disagreement between the home and the host authority, ESMA shall settle the issue in accordance with Article 19 of Regulation 1095/2010;

2012/11/12
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 6

6. In the event of a change in any of the information communicated in accordance with paragraph 2, a CSD shall give written notice of that change to the competent authority of the home Member State at least one month before implementing the change. The competent authority of the host Member State and the other relevant authorities referred to in Article 11 shall also be immediately informed of that change by the competent authority of the home Member State.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 22 – paragraph 1

1. Where a CSD authorised in one Member State has established a branch in another Member State, the competent authority of the home Member State of the CSD, in the exercise of its responsibilities and after informing the competent authority of the host Member State, may carry out on-site inspections in that branch. Where the services provided in the host Member State are considered substantial by the competent authority in the host Member State, the latter may also carry out on-site inspections in that branch and conduct reviews and evaluations, in cooperation with the home competent authority.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 22 – paragraph 4

4. When, taking into account the situation of the securities markets in the host Member State, the activities of a CSD that has established a branch or interoperability links with other CSDs or security settlement systems in that host Member State or by direct cross-border remote provision of services have become of substantial importance for the functioning or stability of the securities markets and/or the protection of the investors in that host Member State, the home and host competent authorities shall establish cooperation arrangements for the oversight and supervision of the activities ~~of that CSD in the host Member State.~~

2012/11/12
Committee: ECON

Proposal for a regulation
Article 22 – paragraph 5 – subparagraph 1

Where the ~~compete~~relevant authorityies as referred in Article 11 of the host Member State has clear and demonstrable grounds for believing that a CSD providing services within its territory in accordance with Article 21 is in breach of the obligations arising from the provisions of this Regulation or that the CSD imposes significant threats to the stability or functioning of the securities markets or to the protection of investors, it shall refer those findings to the competent authority of the home Member State.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 22 – paragraph 5 – subparagraph 2

Where, despite measures taken by the competent authority of the home Member State or because such measures prove inadequate, the CSD persists in acting in breach of the obligations arising from the provisions of this Regulation, after informing the competent authority of the home Member State, the competent authority of the host Member State, in close cooperation with relevant authorities as referred in Article 11 of the host Member State, shall take all the appropriate measures needed in order to ensure compliance with the provisions of this Regulation within the territory of the host Member State. ESMA shall be informed of such measures without delay.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 23 – paragraph 2 – point c a (new)

(c a) the CSD is established or authorised in a third country that is considered as having equivalent systems for anti-money- laundering and combating the financing of terrorism to those of the Union in accordance with the criteria set out in the common understanding between Member States on third-country equivalence under Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 6

6. A CSD shall be subject to frequent and independent audits. The results of these audits shall be communicated to the board and ~~made available to the competent authority~~to the user committee referred to in Article 26 and made available to the competent authority, as well as, when services are provided under Article 21, to relevant authorities referred to in Article 11. The main findings shall also be made publicly available except for parts containing business secrets.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 30 – paragraph 1

1. For each securities settlement system it operates and for all other services it provides a CSD shall have publicly disclosed criteria for participation which allow fair and open access. Such criteria shall be transparent, objective, risk-based, and non-discriminatory so as to ensure fair and open access to the CSD. Criteria that restrict access shall only be permitted to the extent that their objective is to control the risk for the CSD.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 30 – paragraph 5

5. ~~The Commission shall be empowered to adopt delegated acts in accordance with Article 64~~ESMA shall develop in close co- operation with the members of the ESCB draft regulatory technical standards concerning measures to specify the risks which may justify a refusal by a CSD of access to participants and the elements of the procedure referred to in paragraph 3. ESMA shall submit those draft regulatory technical standards to the Commission by six months from the date of entry into force of this Regulation. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 32 – paragraph 1

By 1 February 2017, CSDs shall use in their communication procedures with participants of the securities settlement systems they operate and with the market infrastructures they interface with the recognised communication procedures and standards for messaging and reference data in order to facilitate efficient recording, payment and settlemother CSD service they provide communication procedures and messaging and transaction standards established by ESMA, when they have not mutually agreed upon other communication solutions providing at least the same service level and data content.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 32 – paragraph 1 a (new)

By 1 February 2017, CSDs shall use for communication between CSDs procedures and messaging and transaction standards established by ESMA, where they have not mutually agreed upon other communication solutions providing at least the same service level and data content. ESMA shall develop those standards with the objective of supporting end-to-end straight-through processing.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 32 – paragraph 1 b (new)

By 1 February 2017, all employed links between CSDs operating in Members States shall be interoperable DVP- settlement supporting links.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 32 – paragraph 1 c (new)

By 1 February 2017, CSDs shall use, for communication with market venues and CCPs, procedures and messaging and transaction standards established by ESMA, where they have not mutually agreed upon other communication solutions providing at least the same service level and data content.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 32 – paragraph 1 d (new)

ESMA shall develop in cooperation with the members of the ESCB draft regulatory technical standards containing the standards and procedures required in paragraphs 1, 2 and 4. ESMA shall submit those draft regulatory technical standards to the Commission by six months from the date of entry into force of this Regulation. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 32 – paragraph 1 e (new)

ESMA shall develop these standards with the objective of supporting end-to-end straight-through-processing.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 34 – paragraph 1

1. A CSD shall take appropriate reconciliation measures to verify that the number of securities making up a securities issue or part of a securities issue submitted to the CSD is equal to the sum of securities recorded on the securities accounts ofat the ~~participants of the securities settlement system~~top tier-level operated by the CSD. Such reconciliation measures shall be conducted ~~intraday~~continuously when possible.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 35 – title

Protection of participants’ and end- investors’ securities

2012/11/12
Committee: ECON

Proposal for a regulation
Article 35 – paragraph 3

3. A CSD shall offer to keep records and accounts enabling a participant to ~~distinguish~~separate the securities of ~~each~~any of that participant’s clients, if and as required by that participant (‘individual client segregation’). Participants shall require individual segregation at CSD-level for any individual end-investor upon such a request by an individual end-investor.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 35 – paragraph 5

5. A CSD shall not use the securities of a participant or an end-investor for any purpose unless it has obtained that participant’s or end-investor’s express consent.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 35 – paragraph 5 a (new)

5 a. Member States may require certain customer groups to keep certain parts of their securities holdings on individual direct or segregated accounts at the CSD- level.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 36 – paragraph 8

8. All securities transactions against cash ~~between direct participants to the securities settlem~~within a CSD system and betweent system~~s operated by a CSD~~ participants shall be settled on a DVP basis.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 37 – paragraph 1

1. For transactions denominated in the currency of the country where the settlement takes place, a CSD shall settle the cash payments of its respective securities settlement system through accounts opened with a central bank operating domestically in such currency whenever practical and available.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 42 – paragraph 1

1. A CSD shall identify all p~~otential~~lausible sources of operational risk, both internal and external, and minimise their impact through the deployment of appropriate IT tools, controls and procedures, including for all the securities settlement systems it operates.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 42 – paragraph 3

3. For ~~its notary and central maintenance services as well~~all services it provides as for each securities settlement system it operates, a CSD shall establish, implement and maintain an adequate business continuity policy and disaster recovery plan to ensure the preservation of its services, the timely recovery of operations and the fulfilment of the CSD’s obligations in the case of events that pose a significant risk of disrupting operations.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 42 – paragraph 4

4. The plan referred to in paragraph 3 shall ~~at a minimum provide for the recovery of all transactions at~~ensure that critical information technology systems can resume operations as soon as possible from the time of disruption to allow the participants of a CSD to continue to operate with certainty and to complete settlement on the scheduled date. In case of extreme circumstances, settlement shall be ensured by the end of the day. It shall include the setting up of a second processing site with the requisite level of key resources, capabilities and functionalities~~, including appropriately skilled and experienced staff~~.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 43 – paragraph 3

3. A CSD ~~shall invest its financial resources only in cash or in highly liquid financial instruments with minimal market and credit risk~~’s investment strategy shall be consistent with its overall risk- management strategy and fully disclosed to its participants, and investments shall be secured by, or be claims on, high- quality obligors. These investments shall be capable of being liquidated rapidly with minimal adverse price effect.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 43 – paragraph 4

4. A CSD shall take into account its overall ~~credit~~ risk exposures to individual institutions ~~in making its investment decision~~with which it holds its own financial assets and shall ensure that its overall risk exposure to any ~~individual~~such institution remains within acceptable concentration limits.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 46 – paragraph 4 a (new)

4 a. A CSD shall analyse and define the law applicable to each book-entry account it maintains and present the outcome to the competent authority for verification.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 46 – paragraph 4 b (new)

4 b. After the verification by the competent authority of the CSD- and account-specific rules regarding the applicable law, the outcome will become unchallengeable and the CSD shall inform the account holder of the applicable law.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 47 – paragraph 1

1. Without prejudice to the ~~corporate law~~law, including corporate law and tax collection laws, under which the securities are constituted, an issuer shall have the right to arrange for its securities to be recorded in any CSD established in any Member State.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 48 – title

~~Standard~~CSD link access

2012/11/12
Committee: ECON

Proposal for a regulation
Article 48 – paragraph 1

A CSD shall have the right to ~~become a participant of~~open a link with any other CSD ~~in accordance with Article 30 and subject to the authorisation of the CSD link provided under Article 17~~within the Union.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 48 – paragraph 1 a (new)

By 1 February 2017, CSD links shall be interoperable DVP-supporting links.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 49 – title

CInterim standard and customised link access

2012/11/12
Committee: ECON

Proposal for a regulation
Article 49 – paragraph –1 (new)

-1. Until 1 February 2017 a CSD shall have the right to become a participant of another CSD and use a standardized link access.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 49 – paragraph 1

1. Where a CSD requests another CSD ~~to develop~~before 1 February 2017 to develop a customised link containing special functions for having access to the latter, the receiving CSD may reject such request only based on risk considerations. It may not deny a request on the grounds of loss of market share.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 50 – paragraph 2 – subparagraph 5

The responsible competent authority shall consult the competent authority of the requesting CSD and the relevant authorities referred to in Article 11 on its assessment of the complaint. Where any of the authorityies of the requesting CSD disagrees with the assessment provided, ~~each~~any one of the ~~two~~ authorities may refer the matter to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 50 – paragraph 4

4. The competent a~~uthorities~~nd relevant authorities, as referred to in Article 11 of the respective CSDs shall consult each other regarding the approval of the link and may, if necessary in case of divergent decisions, refer the matter to ESMA which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 51 – paragraph 1 – subparagraph 1

A CCP and a trading venue shall provide transaction feeds on a non-discriminatory and transparent basis to a CSD upon request by the CSD ~~and may charge a fee for~~. Transaction feeds based on ESMA standards should be free of charge. CDSs, CCPs and trading venues may charge a fee for extra services provided in connection with such transaction feeds to the requesting CSD on a cost-plus basis~~, unless otherwise agreed by both parties~~.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 51 – paragraph 1 – subparagraph 2

A CSD shall provide access to its securities settlement systems on a non-discriminatory and transparent basis to a CCP or a trading venue and may charge a fee for extra services in connection to such access on a cost-plus basis, unless otherwise agreed by both parties. Access based on ESMA standards should be free of charge.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 51 – paragraph 3 – subparagraph 3

The responsible competent authority and the relevant authorities referred to in Article 11 shall duly examine the complaint by assessing the reasons for refusal and shall provide the requesting party with a reasoned reply.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 51 – paragraph 3 – subparagraph 4

The responsible competent authority shall consult the competent authority of the requesting party and the relevant authorities referred to in Article 11 on its assessment of the complaint. Where any of the authorityies of the requesting party disagrees with the assessment provided, ~~each~~any of the ~~two authorities~~m may refer the matter to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 53 – paragraph 4 – point a

(a) The relevant authorityies referred to in ~~point (a) of~~ Article 11~~(1)~~ on whether the envisaged provision of services by the designated credit institution will not affect the functioning of the securities settlement system operated by the applicant CSD or stability or functionality of the market or protection of investors;

2012/11/12
Committee: ECON

Proposal for a regulation
Article 55 – paragraph 2

2. Before withdrawing authorisation, the competent authority shall consult the relevant authorities ~~under point (a) of~~referred to in Article 11~~(1)~~ and the authorities referred to in Article 58(1) on the necessity to withdraw the authorisation except where such a decision is required urgently.

2012/11/12
Committee: ECON

Proposal for a regulation
Article 55 – paragraph 3

3. ESMA, any relevant authority ~~under point (a) of~~referred to in Article 11~~(1)~~ and any authority referred to in Article 58(1) may, at any time, request that the competent authority of the Member State where the CSD is established examine whether the CSD and the designated credit institution are still in compliance with the conditions under which the authorisation is granted.

2012/11/12
Committee: ECON

Proposal for a regulation
Annex 1 – section B – paragraph 1 – point 2 – point d

(d) ~~Order~~Instruction routing and processing, distribution of payment orders, fee collection and processing and related reporting;

2012/11/12
Committee: ECON

Proposal for a regulation
Annex 1 – section B – paragraph 1 – point 3

3. ~~Maintain~~Safekeeping and administration of financial instruments, by providing, maintaining and/ or operating securities accounts and offering relat~~ion to the settlement~~ed asset servicing services, ~~collateral management and other ancillary service~~including processing market claims, and collecting taxes related to financial instruments or transactions.

2012/11/12
Committee: ECON

Proposal for a regulation
Annex 1 – section B – paragraph 1 – point 3 a (new)

3 a. Operational services related to netting and clearing services

2012/11/12
Committee: ECON

Proposal for a regulation
Annex 1 – section C – title

~~Banking type of ancillary services~~Ancillary services involving credit and liquidity risk

2012/11/12
Committee: ECON