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Activities of Karima DELLI related to 2021/0384(COD)

Shadow reports (1)

REPORT on the proposal for a directive of the European Parliament and of the Council amending Directive 2014/65/EU on markets in financial instruments
2023/03/02
Committee: ECON
Dossiers: 2021/0384(COD)
Documents: PDF(221 KB) DOC(67 KB)
Authors: [{'name': 'Danuta Maria HÜBNER', 'mepid': 96779}]

Amendments (15)

Amendment 21 #
Proposal for a directive
Recital 3
(3) Regulation (EU) No 600/2014 was amended by Regulation (EU) XX/XXXX of the European Parliament and of the Council19 removing the main obstacles that have prevented the emergence of a consolidated tape. That Regulation therefore introduced mandatory contributions of market data to the consolidated tape provider and enhanced the data quality including harmonizing the synchronisation of the business clock. In addition, that Regulation reduced the recourse to possibilities to waive pre-trade transparency for venues and systematic internalisers. Furthermore, it introduced enhancements to the trading obligations and the prohibition of the practice of receiving payo the best execution requirements for forwardinginancial intermediaries dealing with retail client orders for execution. Since Directive 2014/65 also contains provisions related to consolidated tape and transparency, the amendments to Regulation (EU) No 600/2014 should be reflected in Directive 2014/65/EU. __________________ 19 Regulation (EU) XX/XXXX of the European Parliament and of the Council amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders (COM 727)
2022/10/20
Committee: ECON
Amendment 25 #
Proposal for a directive
Recital 9 a (new)
(9 a) The Russian war in Ukraine has triggered major price movements on commodities markets. Numerous analysis and studies, such as the IPES1a study "Another perfect storm", have demonstrated that market volatility and the price surge we witnessed on commodities markets were not only driven by economic fundamentals but also by purely financial trading. The market turmoil sparked by the Russian war showed that the EU framework adopted pursuant to the G20 commitment made in Pittsburg to put an end to “the excessive commodity price volatility” has not reached its objectives. It is therefore necessary to enforce a stringent and more transparent regime. The Commission shall review, based on ESMA input and analysis, the appropriateness of the position limit framework by 31 December 2025. __________________ 1a https://ipes- food.org/_img/upload/files/AnotherPerfec tStorm.pdf
2022/10/20
Committee: ECON
Amendment 27 #
Proposal for a directive
Recital 10
(10) Within the framework regulating the Union’s markets in financial instruments, many substantive requirements laid down in Regulation (EU) No 600/2014 are supervised and sanctioned at national level and in accordance with Articles 69 and 70 of Directive 2014/65/EU. Regulation (EU) XX/XXXX24 has amended Regulation (EU) No 600/2014 to include new rules on the volume cap mechanism, on mandatory contributions of core market data to the consolidated tape, on data quality standards to which those contributions are subject and on the ban on receiving payments for forwarding client orders for executionrequirements to financial entities to act in the best interest of their retail clients. As the supervision of the relevant entities lies with national authorities, those new substantive requirements should be added to the list in Directive 2014/65/EU of provisions for which the Member States should provide sanctions at national level,. __________________ 24 COM 727
2022/10/20
Committee: ECON
Amendment 28 #
Proposal for a directive
Article 1 – paragraph 1 – point 2 – introductory part
Directive 2014/65/EU
Article 2 – paragraph 1
2. in Article 2(1), is amended as follows: a) point (d), point (ii) is replaced by the following:
2022/10/20
Committee: ECON
Amendment 31 #
Proposal for a directive
Article 1 – paragraph 1 – point 2 – point i (new)
Directive 2014/65/EU
Article 2 – paragraph 1 – point j
(j) persons:b) Point (ij) market makers, in commodity derivatives or emission allowances or derivatives thereof, excluding persons who deal on own account when executing client orders; or (ii) other than dealing on own account,is replaced by the following: (j) persons providing investment services in commodity derivatives or emission allowances or derivatives thereof to the customers or suppliers of their main business; dealing on own account, including providing investment services, provided that: – for each of those cases individually and on an aggregate basis, the activity is ancillary to their main business, when considered on a group basis, – the net outstanding national exposure of this person represents a marginal share of the total amount of net exposures in specific commodity derivatives or emission allowances or derivatives markets in which this person is active, – the investments services are provided exclusively for hedging purposes and commensurate to the volume of commercial transactions, – those persons are not part of a group the main business of which is the provision of investment services within the meaning of this Directive, the performance of any activity listed in Annex I to Directive 2013/36/EU, or acting as a market -maker for commodity derivatives, – those persons do not apply a high- frequency algorithmic trading technique, and those persons report upon request to the competent authority the basis on which they have assessed that their activity under points (i) and (ii) is ancillary to their main business,
2022/10/20
Committee: ECON
Amendment 32 #
Proposal for a directive
Article 1 – paragraph 1 – point 2 a (new)
Directive 2014/65/EU
Article 2 – paragraph 4
4. By 31 July 20212 a. Article 2, paragraph 4 is replaced by the following: 4. By [6 months after the entry into force of this Directive], the Commission shall adopt a delegated act in accordance with Article 89 in order to supplement this Directive by specifying, for the purpose of point (j) of paragraph 1 of this Article, the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level. Those criteria shall take into account the following elements: (a) whether the net outstanding notional exposure in commodity derivatives or emission allowances or derivatives thereof for cash settlement traded in the Union, excluding commodity derivatives or emission allowances or derivatives thereof traded on a trading venue, is below an annual threshold of EUR 31 billion; or (b) whether the capital employed by the group to which the person belongs is predominantly allocated to the main business of the group; or (c) whether or not the size of the activities referred to in point (j) of paragraph 1 exceeds the total size of the other trading activities at group level. The activities referred to in this paragraph shall be considered at a group level. The elements referred to in the second subparagraph of this paragraph shall exclude: (a) to in Article 3 of Regulation (EU) No 648/2012 that serve group-wide liquidity or risk management purposes; (b) derivatives or emission allowances or derivatives thereof that are objectively measurable as reducing risks directly relating to the commercial activit; (ca) whether the net outstanding notional exposure of the person represents a marginal share of the total amount of net outstanding notional exposure in the commodity derivatives or emission allowances or derivatives; (cb) whether the investment services are provided exclusively for treasury financing activity; (c) derivatives or emission allowances or derhedging purposes. The activaitives thereof entereferred into to fulfil obligations to provide liquidity on a trading venue, where such obligations are required by regulatory authorities in accordance with Union law or with national laws, regulations and administrative provisions, or by trading venues.in this paragraph shall be considered at group level. intragroup transactions as referred transactions in commodity transactions in commodity
2022/10/20
Committee: ECON
Amendment 35 #
Proposal for a directive
Article 1 – paragraph 1 – point 3 a (new)
Directive 2014/65/EU
Article 16 – paragraph 3
3 a. in Article 16, paragraph 3 is replaced by the following: "3. An investment firm shall maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest as defined in Article 23 from adversely affecting the interests of its clients. An investment firm which manufactures financial instruments for sale to clients shall maintain, operate and review a process for the approval of each financial instrument and significant adaptations of existing financial instruments before it is marketed or distributed to clients. The product approval process shall specify an identified target market of end clients within the relevant category of clients for each financial instrument and shall ensure that all relevant risks to such identified target market are assessed and that the intended distribution strategy is consistent with the identified target market. An investment firm shall also regularly review financial instruments it offers or markets, taking into account any event that could materially affect the potential risk to the identified target market, to assess at least whether the financial instrument remains consistent with the needs of the identified target market and whether the intended distribution strategy remains appropriate. An investment firm which manufactures financial instruments shall make available to any distributor all appropriate information on the financial instrument and the product approval process, including the identified target market of the financial instrument. Where an investment firm offers or recommends financial instruments which it does not manufacture, it shall have in place adequate arrangements to obtain the information referred to in the fifth subparagraph and to understand the characteristics and identified target market of each financial instrument. The policies, processes and arrangements referred to in this paragraph shall be without prejudice to all other requirements under this Directive and Regulation (EU) No 600/2014, including those relating to disclosure, suitability or appropriateness, identification and management of conflicts of interests, and inducements. (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014L0065-20220228). " Or. en
2022/10/20
Committee: ECON
Amendment 36 #
Proposal for a directive
Article 1 – paragraph 1 – point 3 b (new)
Directive 2014/65/EU
Article 23
3 b. Article 23 is replaced by the following: "1. Member States shall require investment firms to take all appropriate steps to identify and to prevent or manage conflicts of interest between themselves, including their managers, employees and tied agents, or any person directly or indirectly linked to them by control and their clients or between one client and another that arise in the course of providing any investment and ancillary services, or combinations thereof, including those caused by the receipt of inducements from third parties or by the investment firm’s own remuneration and other incentive structures. 2. Where organisational or administrative arrangements made by the investment firm in accordance with Article 16(3) to prevent conflicts of interest from adversely affecting the interest of its client are not sufficient to ensure, with reasonable confidence, that risks of damage to client interests will be prevented, the investment firm shall clearly disclose to the client the general nature and/or sources of conflicts of interest and the steps taken to mitigate those risks before undertaking business on its behalf. 3. The disclosure referred to in paragraph 2 shall: (a) be made in a durable medium; and (b) include sufficient detail, taking into account the nature of the client, to enable that client to take an informed decision with respect to the service in the context of which the conflict of interest arises. 4. The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to: (a) define the steps that investment firms might reasonably be expected to take to identify, prevent, manage and disclose conflicts of interest when providing various investment and ancillary services and combinations thereof; (b) establish appropriate criteria for determining the types of conflict of interest whose existence may damage the interests of the clients or potential clients of the investment firm. "
2022/10/20
Committee: ECON
Amendment 37 #
Proposal for a directive
Article 1 – paragraph 1 – point 3 c (new)
Directive 2014/65/EU
Article 24
Article 24 General principles and information to clients 1. Member States shall require that, when providing investment services or, where appropriate, ancillary services to clients, an investment firm act honestly, fairly and professionally in accordance with the best interests of its clients and comply, in particular, with the principles set out in this Article and in Article 25. 2. Investment firms which manufacture financial instruments for sale to clients shall ensure that those financial instruments are designed to meet the needs of an identified target market of end clients within the relevant category of clients, the strategy for distribution of the financial instruments is compatible with the identified target market, and the investment firm takes reasonable steps to ensure that the financial instrument is distributed to the identified target market. An investment firm shall understand the financial instruments they offer or recommend, assess the compatibility of the financial instruments with the needs of the clients to whom it provides investment services, also taking account of the identified target market of end clients as referred to in Article 16(3), and ensure that financial instruments are offered or recommended only when this is in the interest of the client. 3. All information, including marketing communications, addressed by the investment firm to clients or potential clients shall be fair, clear and not misleading. Marketing communications shall be clearly identifiable as such. 4. Appropriate information shall be provided in good time to clients or potential clients with regard to the investment firm and its services, the financial instruments and proposed investment strategies, execution venues and all costs and related charges. That information shall include the following: (a) when investment advice is provided, the investment firm must, in good time before it provides investment advice, inform the client: (i) whether or not the advice is provided on an independent basis; (ii) whether the advice is based on a broad or on a more restricted analysis of different types of financial instruments and, in particular, whether the range is limited to financial instruments issued or provided by entities having close links with the investment firm or any other legal or economic relationships, such as contractual relationships, so close as to pose a risk of impairing the independent basis of the advice provided; (iii) whether the investment firm will provide the client with a periodic assessment of the suitability of the financial instruments recommended to that client; (b) the information on financial instruments and proposed investment strategies must include appropriate guidance on and warnings of the risks associated with investments in those instruments or in respect of particular investment strategies and whether the financial instrument is intended for retail or professional clients, taking account of the identified target market in accordance with paragraph 2; (c) the information on all costs and associated charges must include information relating to both investment and ancillary services, including the cost of advice, where relevant, the cost of the financial instrument recommended or marketed to the client and how the client may pay for it, also encompassing any third-party payments. The information about all costs and charges, including costs and charges in connection with the investment service and the financial instrument, which are not caused by the occurrence of underlying market risk, shall be aggregated to allow the client to understand the overall cost as well as the cumulative effect on return of the investment, and where the client so requests, an itemised breakdown shall be provided. Where applicable, such information shall be provided to the client on a regular basis, at least annually, during the life of the investment. Where the agreement to buy or sell a financial instrument is concluded using a means of distance communication which prevents the prior delivery of the information on costs and charges, the investment firm may provide the information on costs and charges either in electronic format or on paper, where requested by a retail client, without undue delay after the conclusion of the transaction, provided that both of the following conditions are met: (i) the client has consented to receiving the information without undue delay after the conclusion of the transaction; (ii) the investment firm has given the client the option of delaying the conclusion of the transaction until the client has received the information. In addition to the requirements of the third subparagraph, the investment firm shall be required to give the client the option of receiving the information on costs and charges over the phone prior to the conclusion of the transaction. 5. The information referred to in paragraphs 4 and 9 shall be provided in a comprehensible form in such a manner that clients or potential clients are reasonably able to understand the nature and risks of the investment service and of the specific type of financial instrument that is being offered and, consequently, to take investment decisions on an informed basis. Member States may allow that information to be provided in a standardised format. 5a. Investment firms shall provide all information required to be provided by this Directive to clients or potential clients in electronic format, except where the client or potential client is a retail client or potential retail client who has requested receiving the information on paper, in which case that information shall be provided on paper, free of charge. Investment firms shall inform retail clients or potential retail clients that they have the option of receiving the information on paper. Investment firms shall inform existing retail clients that receive the information required to be provided by this Directive on paper of the fact that they will receive that information in electronic format at least eight weeks before sending that information in electronic format. Investment firms shall inform those existing retail clients that they have the choice either to continue receiving information on paper or to switch to information in electronic format. Investment firms shall also inform existing retail clients that an automatic switch to the electronic format will occur if they do not request the continuation of the provision of the information on paper within that eight week period. Existing retail clients who already receive the information required to be provided by this Directive in electronic format do not need to be informed. 6. Where an investment service is offered as part of a financial product which is already subject to other provisions of Union law relating to credit institutions and consumer credits with respect to information requirements, that service shall not be additionally subject to the obligations set out in paragraphs 3, 4 and 5. 7. the client that investment advice is provided on an independent basis, that investment firm shall: (a) financial instruments available on the market which must be sufficiently diverse with regard to their type and issuers or product providers to ensure that the client’s investment objectives can be suitably met and must not be limited to financial instruments issued or provided by: (i) entities having close links with the investment firm; or (ii) investment firm has such close legal or economic relationships, such as contractual relationships, as to pose a risk of impairing the independent basis of the advice provided; (b) commissions or any monetary or non- monetary benefits paid or provided by any third party or a person acting on behalf of a third party in relation to the provision of the service to clients. Minor non- monetary benefits that are capable of enhancing the quality of service provided to a client and are of a scale and nature such that they could not be judged to impair compliance with the investment firm’s duty to act in the best interest of the client must be clearly disclosed and are excluded from this point. 8. management the investment firm shall not accept and retain fees, commissions or any monetary or non-monetary benefits paid or provided by any third party or a person acting on behalf of a third party in relation to the provision of the service to clients. Minor non-monetary benefits that are capable of enhancing the quality of service provided to a client and are of a scale and nature such that they could not be judged to impair compliance with the investment firm’s duty to act in the best interest of the client shall be clearly disclosed and are excluded from this paragraph. 9. Member States shall ensure that investment firms are regarded as not fulfilling their obligations under Article 23 or under paragraph 1 of this Article where they pay or are paid any fee or commission, or provide or are provided with any non-monetary benefit in connection with the provision of an investment service or an ancillary service, to or by any party except the client or a person on behalf of the client, other than where the payment or benefit: (a) is designed to enhance the quality of the relevant service to the client; and (b) does not impair compliance with the investment firm’s duty to act honestly, fairly and professionally in accordance with the best interest of its clients. The existence, nature and amount of the payment or benefit referred to in the first subparagraph, or, where the amount cannot be ascertained, the method of calculating that amount, must be clearly disclosed to the client, in a manner that is comprehensive, accurate and understandable, prior to the provision of the relevant investment or ancillary service. Where applicable, the investment firm shall also inform the client on mechanisms for transferring to the client the fee, commission, monetary or non- monetary benefit received in relation to the provision of the investment or ancillary service. The payment or benefit which enables or is necessary for the provision of investment services, such as custody costs, settlement and exchange fees, regulatory levies or legal fees, and which by its nature cannot give rise to conflicts with the investment firm’s duties to act honestly, fairly and professionally in accordance with the best interests of its clients, is not subject to the requirements set out in the first subparagraph. 9a. Member States shall ensure that the provision of research by third parties to investment firms providing portfolio management or other investment or ancillary services to clients is to be regarded as fulfilling the obligations under paragraph 1 if: (a) before the execution or research services have been provided, an agreement has been entered into between the investment firm and the research provider, identifying the part of any combined charges or joint payments for execution services and research that is attributable to research; (b) the investment firm informs its clients about the joint payments for execution services and research made to the third party providers of research; and (c) the research for which the combined charges or the joint payment is made concerns issuers whose market capitalisation for the period of 36 months preceding the provision of the research did not exceed EUR 1 billion, as expressed by end-year quotes for the years when they are or were listed or by the own-capital for the financial years when they are or were not listed. For the purpose of this Article, research shall be understood as covering research material or services concerning one or several financial instruments or other assets, or the issuers or potential issuers of financial instruments, or as covering research material or services closely related to a specific industry or market such that it informs views on financial instruments, assets or issuers within that industry or market. Research shall also comprise material or services that explicitly or implicitly recommend or suggest an investment strategy and provide a substantiated opinion as to the present or future value or price of financial instruments or assets, or otherwise contain analysis and original insights and reach conclusions based on new or existing information that could be used to inform an investment strategy and be relevant and capable of adding value to the investment firm’s decisions on behalf of clients being charged for that research. 10. An investment firm which provides investment services to clients shall ensure that it does not remunerate or assess the performance of its staff in a way that conflicts with its duty to act in the best interests of its clients. In particular, it shall not make any arrangement by way of remuneration, sales targets or otherwise that could provide an incentive to its staff to recommend a particular financial instrument to a retail client when the investment firm could offer a different financial instrument which would better meet that client’s needs. 11. When an investment service is offered together with another service or product as part of a package or as a condition for the same agreement or package, the investment firm shall inform the client whether it is possible to buy the different components separately and shall provide for a separate evidence of the costs and charges of each component. Where the risks resulting from such an agreement or package offered to a retail client are likely to be different from the risks associated with the components taken separately, the investment firm shall provide an adequate description of the different components of the agreement or package and the way in which its interaction modifies the risks. ESMA, in cooperation with EBA and EIOPA, shall develop by 3 January 2016, and update periodically, guidelines for the assessment and the supervision of cross- selling practices indicating, in particular, situations in which cross-selling practices are not compliant with obligations laid down in paragraph 1. 12. Member States may, in exceptional cases, impose additional requirements on investment firms in respect of the matters covered by this Article. Such requirements must be objectively justified and proportionate so as to address specific risks to investor protection or to market integrity which are of particular importance in the circumstances of the market structure of that Member State.. Member States shall notify the Commission of any requirement which they intend to impose in accordance with this paragraph without undue delay and at least two months before the date appointed for that requirement to come into force. The notification shall include a justification for that requirement. Any such additional requirements shall not restrict or otherwise affect the rights of investment firms under Articles 34 and 35 of this Directive. The Commission shall within two months from the notification referred to in the second subparagraph provide its opinion on the proportionality of and justification for the additional requirements. The Commission shall communicate to Member States and make public on its website the additional requirements imposed in accordance with this paragraph. Member States may retain additional requirements that were notified to the Commission in accordance with Article 4 of Directive 2006/73/EC before 2 July 2014 provided that the conditions laid down in that Article are met. 13. The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to ensure that 3 c. Article 24 is replaced by the following: "Article 24 General principles and information to clients 1. Member States shall require that, when providing investment services or, where appropriate, ancillary services to clients, an investment firm act honestly, fairly and professionally in accordance with the best interests of its clients and comply, in particular, with the principles set out in this Article and in Article 25. 2. Investment firms which manufacture financial instruments for sale to clients shall ensure that those financial instruments are designed to meet the needs of an identified target market of end clients within the relevant category of clients, the strategy for distribution of the financial instruments is compatible with the identified target market, and the investment firm takes reasonable steps to ensure that the financial instrument is distributed to the identified target market. An investment firm shall understand the financial instruments they offer or recommend, assess the compatibility of the financial instruments with the needs of the clients to whom it provides investment services, also taking account of the identified target market of end clients as referred to in Article 16(3), and ensure that financial instruments are offered or recommended only when this is in the interest of the client. 3. All information, including marketing communications, addressed by the investment firm to clients or potential clients shall be fair, clear and not misleading. Marketing communications shall be clearly identifiable as such. 3a. When providing investment advice, portfolio management, or execution-only services, investment firms (a) shall only be remunerated through charges payable by or on behalf of the client, and shall not solicit or accept any other payments or benefits in relation to these services, regardless of whether it intends to refund the payments or pass the benefits on to the retail client; (b) shall not accept or receive fees, commissions or any benefits paid or provided by any third party of a person acting on behalf of a third party in relation to the provision of the service to the clients. Minor non-monetary benefits that are capable of enhancing the quality of service provided to a client and are of a scale and nature such that they could not be judged to impair compliance with the investment firm’s duty to act in the best interest of the client must be clearly disclosed and are excluded from this point; (c) shall not incentivise staff to recommend a particular financial instrument to a retail client when the firm could offer another that would better meet that client’s needs. 4. Appropriate information shall be provided in good time to clients or potential clients with regard to the investment firm and its services, the financial instruments and proposed investment strategies, execution venues and all costs and related charges. That information shall include the following: (a) when investment advice is provided, the investment firm must, in good time before it provides investment advice, inform the client: (i) whether or not the advice is provided on an independent basis. Where an investment firm informs the client that investment advice is provided on an independent basis, that investment firm shall assessesa sufficient range of third- party financial instruments available on the market which must be sufficiently diverse with regard to their type and issuers or product providers to ensure that the client’s investment objectives can be suitably met and must not be limited to financial instruments issued or provided by the investment firm or other entities with which the investment firm has such close legal or economic relationships, such as contractual relationships, as to pose a risk of impairing the independent basis of the advice provided (ii) whether the advice is provided based on a restricted analysis of different types of financial instruments and, in particular, whether the range is limited to in-house financial instruments issued or provided by entities having close links with the investment firm or any other legal or economic relationships, such as contractual relationships, so close as to pose a risk of impairing the independent basis of the advice provided; (iii) whether the investment firm will provide the client with a periodic assessment of the suitability of the financial instruments recommended to that client; (b) the information on financial instruments and proposed investment strategies must include appropriate guidance on and warnings of the risks associated with investments in those instruments or in respect of particular investment strategies and whether the financial instrument is intended for retail or professional clients, taking account of the identified target market in accordance with paragraph 2; (c) the information on all costs and associated charges must include information relating to both investment and ancillary services, including the cost of advice, where relevant, the cost of the financial instrument recommended or marketed to the client and how the client may pay for it. For the purposes of paragraph 4(a), investment firms should be required to transmit on an annual basis information to national competent authorities about the proportion of third-party financial instruments and the proportion of in- house financial instruments distributed to clients. National competent authorities should be required to transmit this information to ESMA. The information about all costs and charges, including costs and charges in connection with the investment service and the financial instrument, which are not caused by the occurrence of underlying market risk, shall be aggregated to allow the client to understand the overall cost as well as the cumulative effect on return of the investment, and where the client so requests, an itemised breakdown shall be provided. Where applicable, such information shall be provided to the client on a regular basis, at least annually, during the life of the investment. Where the agreement to buy or sell a financial instrument is concluded using a means of distance communication which prevents the prior delivery of the information on costs and charges, the investment firm may provide the information on costs and charges either in electronic format or on paper, where requested by a retail client, without undue delay after the conclusion of the transaction, provided that both of the following conditions are met: (i) the client has consented to receiving the information without undue delay after the conclusion of the transaction; (ii) the investment firm has given the client the option of delaying the conclusion of the transaction until the client has received the information. In addition to the requirements of the third subparagraph, the investment firm shall be required to give the client the option of receiving the information on costs and charges over the phone prior to the conclusion of the transaction. 5. The information referred to in paragraphs 4 and 9 shall be provided in a comprehensible form in such a manner that clients or potential clients are reasonably able to understand the nature and risks of the investment service and of the specific type of financial instrument that is being offered and, consequently, to take investment decisions on an informed basis. Member States may allow that information to be provided in a standardised format. 5a. Investment firms shall provide all information required to be provided by this Directive to clients or potential clients in electronic format, except where the client or potential client is a retail client or potential retail client who has requested receiving the information on paper, in which case that information shall be provided on paper, free of charge. Investment firms shall inform retail clients or potential retail clients that they have the option of receiving the information on paper. Investment firms shall inform existing retail clients that receive the information required to be provided by this Directive on paper of the fact that they will receive that information in electronic format at least eight weeks before sending that information in electronic format. Investment firms shall inform those existing retail clients that they have the choice either to continue receiving information on paper or to switch to information in electronic format. Investment firms shall also inform existing retail clients that an automatic switch to the electronic format will occur if they do not request the continuation of the provision of the information on paper within that eight week period. Existing retail clients who already receive the information required to be provided by this Directive in electronic format do not need to be informed. 6. Where an investment service is offered as part of a financial product which is already subject to other provisions of Union law relating to credit institutions and consumer credits with respect to information requirements, that service shall not be additionally subject to the obligations set out in paragraphs 3, 4 and 5. Where an investment firm informs assess a sufficient range of the investment firm itself or by other entities with which the not accept and retain fees, When providing portfolio 9. Member States shall ensure that investment firms are regarded as not fulfilling their obligations under Article 23 or under paragraph 1 of this Article where they are provided with any non-monetary benefit in connection with the provision of an investment service or an ancillary service, to or by any party except the client or a person on behalf of the client, other than where the payment or benefit: (a) is designed to enhance the quality of the relevant service to the client; and (b) does not impair compliance with the investment firm’s duty to act honestly, fairly and professionally in accordance with the best interest of its clients. The existence, nature and amount of the payment or benefit referred to in the first subparagraph, or, where the amount cannot be ascertained, the method of calculating that amount, must be clearly disclosed to the client, in a manner that is comprehensive, accurate and understandable, prior to the provision of the relevant investment or ancillary service. Where applicable, the investment firm shall also inform the client on mechanisms for transferring to the client the non-monetary benefit received in relation to the provision of the investment or ancillary service. The payment or benefit which enables or is necessary for the provision of investment services, such as custody costs, settlement and exchange fees, regulatory levies or legal fees, and which by its nature cannot give rise to conflicts with the investment firm’s duties to act honestly, fairly and professionally in accordance with the best interests of its clients, is not subject to the requirements set out in the first subparagraph. 9a. Member States shall ensure that the provision of research by third parties to investment firms providing portfolio management or other investment or ancillary services to clients is to be regarded as fulfilling the obligations under paragraph 1 if: (a) before the execution or research services have been provided, an agreement has been entered into between the investment firm and the research provider, identifying the part of any combined charges or joint payments for execution services and research that is attributable to research; (b) the investment firm informs its clients about the joint payments for execution services and research made to the third party providers of research; and (c) the research for which the combined charges or the joint payment is made concerns issuers whose market capitalisation for the period of 36 months preceding the provision of the research did not exceed EUR 1 billion, as expressed by end-year quotes for the years when they are or were listed or by the own-capital for the financial years when they are or were not listed. For the purpose of this Article, research shall be understood as covering research material or services concerning one or several financial instruments or other assets, or the issuers or potential issuers of financial instruments, or as covering research material or services closely related to a specific industry or market such that it informs views on financial instruments, assets or issuers within that industry or market. Research shall also comprise material or services that explicitly or implicitly recommend or suggest an investment strategy and provide a substantiated opinion as to the present or future value or price of financial instruments or assets, or otherwise contain analysis and original insights and reach conclusions based on new or existing information that could be used to inform an investment strategy and be relevant and capable of adding value to the investment firm’s decisions on behalf of clients being charged for that research. 10. An investment firm which provides investment services to clients shall ensure that it does not remunerate or assess the performance of its staff in a way that conflicts with its duty to act in the best interests of its clients. In particular, it shall not make any arrangement by way of remuneration, sales targets or otherwise that could provide an incentive to its staff to recommend a particular financial instrument to a retail client when the investment firm could offer a different financial instrument which would better meet that client’s needs. 11. When an investment service is offered together with another service or product as part of a package or as a condition for the same agreement or package, the investment firm shall inform the client whether it is possible to buy the different components separately and shall provide for a separate evidence of the costs and charges of each component. Where the risks resulting from such an agreement or package offered to a retail client are likely to be different from the risks associated with the components taken separately, the investment firm shall provide an adequate description of the different components of the agreement or package and the way in which its interaction modifies the risks. ESMA, in cooperation with EBA and EIOPA, shall develop by 3 January 2016, and update periodically, guidelines for the assessment and the supervision of cross- selling practices indicating, in particular, situations in which cross-selling practices are not compliant with obligations laid down in paragraph 1. 12. Member States may, in exceptional cases, impose additional requirements on investment firms in respect of the matters covered by this Article. Such requirements must be objectively justified and proportionate so as to address specific risks to investor protection or to market integrity which are of particular importance in the circumstances of the market structure of that Member State. Member States shall notify the Commission of any requirement which they intend to impose in accordance with this paragraph without undue delay and at least two months before the date appointed for that requirement to come into force. The notification shall include a justification for that requirement. Any such additional requirements shall not restrict or otherwise affect the rights of investment firms under Articles 34 and 35 of this Directive. The Commission shall within two months from the notification referred to in the second subparagraph provide its opinion on the proportionality of and justification for the additional requirements. The Commission shall communicate to Member States and make public on its website the additional requirements imposed in accordance with this paragraph. Member States may retain additional requirements that were notified to the Commission in accordance with Article 4 of Directive 2006/73/EC before 2 July 2014 provided that the conditions laid down in that Article are met. 13. The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to ensure that investment firms comply with the principles set out in this Article when providing investment or ancillary services to their clients, including: (a) the conditions with which the information must comply in order to be fair, clear and not misleading; (b) the details about content and format of information to clients in relation to client categorisation, investment firms and their services, financial instruments, costs and charges; (c) the criteria for the assessment of a range of financial instruments available on the market; (d) the criteria to assess compliance of firms receiving inducements with the obligation to act honestly, fairly and professionally in accordance with the best interest of the client. In formulating the requirements for information on financial instruments in relation to point b of paragraph 4 information on the structure of the product shall be included, where applicable, taking into account any relevant standardized information required under Union law. 14. The delegated acts referred to in paragraph 13 shall take into account: (a) the nature of the service(s) offered or provided to the client or potential client, taking into account the type, object, size and frequency of the transactions; (b) the nature and range of products being offered or considered including different types of financial instruments; (c) the retail or professional nature of the client or potential clients or, in the case of paragraphs 4 and 5, their classification as eligible counterparties.
2022/10/20
Committee: ECON
Amendment 44 #
Proposal for a directive
Article 1 – paragraph 1 – point 6 a (new)
Directive 2014/65/EU
Article 48
5.6 a. Article 48 is amended as follows: a) Paragraph 5 is amended as follows: i) the first sub-paragraph is replaced by: ' Member States shall require a regulated market to be able to temporarily halt or constrain trading in emergency situations or if there is a significant price movement in a financial instrument on that market or a related market during a short period and, in exceptional cases, to be able to cancel, vary or correct any transaction. Member States shall require a regulated market to ensure that the parameters for halting trading are appropriately calibrated in a way which takes into account the liquidity of different asset classes and sub-classes, the nature of the market model and types of users and is sufficient to avoid significant disruptions to the orderliness of trading. ii) the following sub-paragraph is inserted in paragraph 5 after second paragraph: ‘ Member States shall require a regulated market to publicly disclose on its website the circumstances leading to halt trading and the main technical parameters used to do so.’ b) paragraph 12 is amended as follows: i) the following points (ga), (gb) and (gc) are inserted: ‘(ga) The technical parameters regulated markets can implement to halt trading in accordance with paragraph 5 of this Article (gb) The market conditions and circumstances that would qualify as emergency situations (gc) The main technical parameters that trading venues shall disclose in accordance with paragraph 5. ESMA shall develop templates for the more specific information regarding the parameters and circumstances triggering the use of circuit breakers that trading venues shall report to competent authorities in accordance with paragraph 5.' ii) The second sub-paragraph is replaced by the following: ' ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015[6 months after the entry into force of this Directive].
2022/10/20
Committee: ECON
Amendment 45 #
Proposal for a directive
Article 1 – paragraph 1 – point 7 a (new)
Directive 2014/65/EU
Article 57
Article 57 Position limits and position management controls in commodity derivatives 1. Member States shall ensure that competent authorities, in line with the calculation methodology determined by ESMA in the regulatory technical standards adopted in accordance with paragraph 3, set and apply limits on the size of a net position which a person can hold at all times in agricultural commodity derivatives and critical or significant commodity derivatives that are traded on trading venues, and in economically equivalent OTC contracts. Commodity derivatives shall be considered to be critical or significant where the sum of all net positions of end position holders constitutes the size of their open interest and is at a minimum of 300 000 lots on average over a one-year period. The limits shall be set based on all positions held by a person and those held on his or her behalf at an aggregate group level in order to: (a) prevent market abuse; (b) support orderly pricing and settlement conditions, including preventing market distorting positions, and ensuring, in particular, convergence between prices of derivatives in the delivery month and spot prices for the underlying commodity, without prejudice to price discovery on the market for the underlying commodity. The position limits referred to in paragraph 1 shall not apply to: (a) positions held by, or on behalf of, a non-financial entity, and which are objectively measurable as reducing risks directly relating to the commercial activity of that non-financial entity; (b) a financial entity that is part of a predominantly commercial group and is acting on behalf of a non-financial entity of the predominantly commercial group, where those positions are objectively measurable as reducing risks directly relating to the commercial activity of that non-financial entity; (c) non-financial counterparties for positions that are objectively measurable as resulting from transactions entered into to fulfil obligations to provide liquidity on a trading venue as referred to in point (c) of the fourth subparagraph of Article 2(4); (d) any other securities as referred to in point (c) of point (44) of Article 4(1) which relate to a commodity or an underlying as referred to in Section C.10 of Annex I. ESMA shall develop draft regulatory technical standards to determine a procedure by which a financial entity that is part of a predominantly commercial group may apply for a hedging exemption for positions held by that financial entity that are objectively measurable as reducing risks directly relating to the commercial activities of the non-financial entities of the group. ESMA shall develop draft regulatory technical standards to determine a procedure setting out how persons may apply for an exemption for positions resulting from transactions entered into to fulfil obligations to provide liquidity on a trading venue. ESMA shall submit the draft regulatory technical standards referred to in the third and fourth subparagraphs to the Commission by 28 November 2021. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the third and fourth subparagraphs of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 2. Position limits shall specify clear quantitative thresholds for the maximum size of a position in a commodity derivative that persons can hold. 3. ESMA shall draw up a list of critical or significant commodity derivatives referred to in paragraph 1 and develop draft regulatory technical standards to determine the calculation methodology that competent authorities are to apply when establishing the spot month position limits and other months’ position limits for physically settled and cash settled commodity derivatives based on the characteristics of the relevant derivative concerned. When drawing up the list of critical or significant commodity derivatives referred to in paragraph 1, ESMA shall take into account the following factors: (a) (b) derivative concerned. When determining the calculation methodology referred to in the first subparagraph, ESMA shall take into account the following factors: (a) the deliverable supply in the underlying commodity; (b) the overall open interest in that derivative and the overall open interest in other financial instruments with the same underlying commodity; (c) the number and size of the market participants; (d) the characteristics of the underlying commodity market, including patterns of production, consumption and transportation to market; (e) the development of new commodity derivatives; (f) the experience of investment firms or market operators operating a trading venue and of other jurisdictions regarding the position limits. ESMA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by 28 November 2021. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 4. A competent authority shall set position limits for critical or significant commodity derivatives and agricultural commodity derivatives that are traded on trading venues, based on the calculation methodology laid down in the regulatory technical standards adopted by the Commission pursuant to paragraph 3. Such position limits shall include economically equivalent OTC contracts. A competent authority shall review the position limits referred to in the first subparagraph where there is a significant change on the market, including a significant change in deliverable supply or open interest, based on its determination of deliverable supply and open interest, and reset those position limits in accordance with the calculation methodology laid down in the regulatory technical standards adopted by the Commission pursuant to paragraph 3. 5. Competent authorities shall notify ESMA of the exact position limits they intend to set in accordance with the methodology for calculation established by ESMA under paragraph 3. Within two months following receipt of the notification, ESMA shall issue an opinion to the competent authority concerned assessing the compatibility of position limits with the objectives of paragraph 1 and with the methodology for calculation established by ESMA under paragraph 3. ESMA shall publish the opinion on its website. The competent authority concerned shall modify the position limits in accordance with ESMA’s opinion, or provide ESMA with justification why the change is considered to be unnecessary. Where a competent authority imposes limits contrary to an ESMA opinion, it shall immediately publish on its website a notice fully explaining its reasons for doing so. Where ESMA determines that a position limit is not in line with the methodology for calculation in paragraph 3, it shall take action in accordance with its powers under Article 17 of Regulation (EU) No 1095/2010. 6. Where agricultural commodity derivatives based on the same underlying and sharing the same characteristics are traded in significant volumes on trading venues in more than one jurisdiction, or where critical or significant commodity derivatives based on the same underlying and sharing the same characteristics are traded on trading venues in more than one jurisdiction, the competent authority of the trading venue where the largest volume of trading takes place (‘central competent authority’) shall set the single position limit to be applied on all trading in those derivatives. The central competent authority shall consult the competent authorities of other trading venues on which those agricultural commodity derivatives are traded in significant volumes or on which those critical or significant commodity derivatives are traded, on the single position limit to be applied and any revisions to that single position limit. Competent authorities that do not agree with the setting of the single position limit by the central competent authority shall state in writing the full and detailed reasons why they consider that the requirements laid down in paragraph 1 have not been met. ESMA shall settle any dispute arising from a disagreement between competent authorities in accordance with its powers under Article 19 of Regulation (EU) No 1095/2010. The competent authorities of the trading venues where agricultural commodity derivatives that are based on the same underlying and that share the same characteristics are traded in significant volumes or critical or significant commodity derivatives that are based on the same underlying and that share the same characteristics are traded, and the competent authorities of position holders in those derivatives, shall put in place cooperation arrangements, which shall include the exchange of relevant data, in order to enable the monitoring and enforcement of the single position limit. 7. ESMA shall monitor at least once a year the way competent authorities have implemented the position limits set in accordance with the calculation methodology established by ESMA under paragraph 3. In doing so, ESMA shall ensure that a single position limit effectively applies to the agricultural commodity derivatives and critical or significant contracts based on the same underlying and sharing the same characteristics irrespective of where they are traded in line with paragraph 6. 8. Member States shall ensure that an investment firm or a market operator operating a trading venue which trades commodity derivatives applies position management controls, including powers for the trading venue to: (a) monitor the open interest positions of persons; (b) obtain information, including all relevant documentation, from persons about the size and purpose of a position or exposure entered into, information about beneficial or underlying owners, any concert arrangements, and any related assets or liabilities in the underlying market, including, where appropriate, positions held in commodity derivatives that are based on the same underlying and that share the same characteristics on other trading venues and in economically equivalent OTC contracts through members and participants; (c) request a person to terminate or reduce a position, on a temporary or permanent basis, and to unilaterally take action to ensure the termination or reduction of the position where the person does not comply with such request; and (d) require a person to provide, on a temporary basis, liquidity back into the market at an agreed price and volume with the express intent of mitigating the effects of a large or dominant position. ESMA shall develop draft regulatory technical standards to specify the content of position management controls, thereby taking into account the characteristics of the trading venues concerned. ESMA shall submit those draft regulatory technical standards to the Commission by 28 November 2021. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the second subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 9. The position limits and position management controls shall be transparent and non-discriminatory, specifying how they apply to persons and taking account of the nature and composition of market participants and of the use they make of the contracts submitted to trading. 10. The investment firm or market operator operating the trading venue shall inform the competent authority of the details of position management controls. The competent authority shall communicate the same information as well as the details of the position limits it has established to ESMA, which shall publish and maintain on its website a database with summaries of the position limits and position management controls.. 11. The position limits of paragraph 1 shall be imposed by competent authorities pursuant to point (p) of Article 69(2). 12. ESMA shall develop draft regulatory technical standards to determine:: (a) the criteria and methods for determining whether a position qualifies as reducing risks directly relating to commercial activities; (b) the methods to determine when positions of a person are to be aggregated within a group; (c) the criteria for determining whether a contract is an economically equivalent OTC contract to that traded on a trading venue, referred to in paragraph 1, in a way that facilitates the reporting of positions taken in equivalent OTC contracts to the relevant competent authority as determined in Article 58(2); (d) the definition of what constitutes significant volumes under paragraph 6 of this Article; (e) the methodology for aggregating and netting OTC and on-venue commodity derivatives positions to establish the net position for purposes of assessing compliance with the limits. Such methodologies shall establish criteria to determine which positions may be netted against one another and shall not facilitate the build-up of positions in a manner inconsistent with the objectives set out in paragraph 1 of this Article; (f) the procedure setting out how persons may apply for the exemption under the second subparagraph of paragraph 1 of this Article and how the relevant competent authority will approve such applications; (g) the method for calculation to determine the venue where the largest volume of trading in a commodity derivative takes place and significant volumes under paragraph 6 of this Article.. ESMA shall submit those draft regulatory technical standards referred to in the first subparagraph to the Commission by 3 July 2015. Power shall be delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 13. Competent authorities shall not impose limits which are more restrictive than those adopted pursuant to paragraph 1 except in exceptional cases where they are objectively justified and proportionate taking into account the liquidity of the specific market and the orderly functioning of that market. Competent authorities shall publish on their website the details of the more restrictive position limits they decide to impose, which shall be valid for an initial period not exceeding six months from the date of their publication on the website. The more restrictive position limits may be renewed for further periods not exceeding six months at a time if the grounds for the restriction continue to be applicable. If not renewed after that six- month period, they shall automatically expire. Where competent authorities decide to impose more restrictive position limits, they shall notify ESMA. The notification shall include a justification for the more restrictive position limits. ESMA shall, within 24 hours, issue an opinion on whether it considers that the more restrictive position limits are necessary to address the exceptional case. The opinion shall be published on ESMA’s website. Where a competent authority imposes limits contrary to an ESMA opinion, it shall immediately publish on its website a notice fully explaining its reasons for doing so. 14. Member States shall provide that competent authorities can apply their powers to impose sanctions under this Directive for the infringements of position limits set in accordance with this Article to: (a) positions held by persons situated or operating in its territory or abroad which exceed the limits on commodity derivative contracts the competent authority has set in relation to contracts on trading venues situated or operating in its territory or economically equivalent OTC contracts; (b) positions held by persons situated or operating in its territory which exceed the limits on commodity derivative contracts set by competent authorities in other Member States7 a. Article 57 is replaced by the following: Article 57 Position limits and position management controls in commodity derivatives 1. Member States shall ensure that competent authorities, in line with the calculation methodology determined by ESMA in the regulatory technical standards adopted in accordance with paragraph 3, set and apply limits on the size of a net position which a person can hold at all times in derivatives that are traded on trading venues, and in economically equivalent OTC contracts. The limits shall be set based on all positions held by a person and those held on his or her behalf at an aggregate group level in order to: (a) prevent market abuse; (b) support orderly pricing and settlement conditions, including preventing market distorting positions, (c) promote convergence between prices of derivatives in the delivery month and spot prices for the underlying commodity, without prejudice to price discovery on the market for the underlying commodity; (d) prevent the build-up of market distorting positions; (e) ensure a clear and strong ETS price signal, and avoiding, in particular, excessive volatility in the price of carbon. The position limits referred to in paragraph 1 shall not apply to: positions held by, or on behalf of, a non- financial entity, and which are objectively measurable as reducing risks directly relating to the commercial activity of that non-financial entity. A position should be considered as reducing risks directly related to the commercial activity when the transaction: i) represents a substitute for a position taken or going to be taken on a physical market; ii) is economically commensurate to the risks of the commercial activity. positions held by, or on behalf of, positions held by financial and 2. Position limits shall specify clear quantitative thresholds for the maximum size of a position in a commodity derivative that persons can hold. 3. ESMA shall develop draft regulatory technical standards to determine the calculation methodology that competent authorities are to apply when establishing the spot month position limits and other months’ position limits for physically settled and cash settled commodity derivatives based on the characteristics of the relevant derivative concerned. the number of market participants; the commodity underlying the When determining the calculation methodology referred to in the first subparagraph, ESMA shall take into account the following factors: (a) the deliverable supply in the underlying commodity; (b) the overall open interest in that derivative and the overall open interest in other financial instruments with the same underlying commodity; (c) the number and size of the market participants; (d) the characteristics of the underlying commodity market, including patterns of production, consumption and transportation to market; (e) the development of new commodity derivatives; (f) the experience of investment firms or market operators operating a trading venue and of other jurisdictions regarding the position limits. ESMA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by [12 months after the entry into force of this Directive]. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 4. A competent authority shall set position limits for commodity derivatives that are traded on trading venues, based on the calculation methodology laid down in the regulatory technical standards adopted by the Commission pursuant to paragraph 3. Such position limits shall include economically equivalent OTC contracts. A competent authority shall review the position limits referred to in the first subparagraph where there is a significant change on the market, including a significant change in deliverable supply or open interest, based on its determination of deliverable supply and open interest, and reset those position limits in accordance with the calculation methodology laid down in the regulatory technical standards adopted by the Commission pursuant to paragraph 3. 5. Competent authorities shall notify ESMA of the exact position limits they intend to set in accordance with the methodology for calculation established by ESMA under paragraph 3. Within two months following receipt of the notification, ESMA shall issue an opinion to the competent authority concerned assessing the compatibility of position limits with the objectives of paragraph 1 and with the methodology for calculation established by ESMA under paragraph 3. ESMA shall publish the opinion and the position limit on its website. The competent authority concerned shall modify the position limits in accordance with ESMA’s opinion, or provide ESMA with justification why the change is considered to be unnecessary. Where a competent authority imposes limits contrary to an ESMA opinion, it shall immediately publish on its website a notice fully explaining its reasons for doing so. Where ESMA determines that a position limit is not in line with the methodology for calculation in paragraph 3, it shall take action in accordance with its powers under Article 17 of Regulation (EU) No 1095/2010. 6. Where commodity derivatives based on the same underlying and sharing the same characteristics are traded in significant volumes on trading venues in more than one jurisdiction, the competent authority of the trading venue where the largest volume of trading takes place (‘central competent authority’) shall set the single position limit to be applied on all trading in those derivatives. The central competent authority shall consult the competent authorities of other trading venues on which those commodity derivatives are traded in significant volumes on the single position limit to be applied and any revisions to that single position limit. Competent authorities that do not agree with the setting of the single position limit by the central competent authority shall state in writing the full and detailed reasons why they consider that the requirements laid down in paragraph 1 have not been met. ESMA shall settle any dispute arising from a disagreement between competent authorities in accordance with its powers under Article 19 of Regulation (EU) No 1095/2010. The competent authorities of the trading venues where commodity derivatives that are based on the same underlying and that share the same characteristics are traded in significant volumes, and the competent authorities of position holders in those derivatives, shall put in place cooperation arrangements, which shall include the exchange of relevant data, in order to enable the monitoring and enforcement of the single position limit. 7. ESMA shall monitor at least once a year the way competent authorities have implemented the position limits set in accordance with the calculation methodology established by ESMA under paragraph 3. In doing so, ESMA shall ensure that a single position limit effectively applies to the commodity derivatives based on the same underlying and sharing the same characteristics irrespective of where they are traded in line with paragraph 6. 8. Member States shall ensure that an investment firm or a market operator operating a trading venue which trades commodity derivatives applies position management controls, including powers for the trading venue to: (a) monitor the open interest positions of persons; (b) obtain information, including all relevant documentation, from persons about the size and purpose of a position or exposure entered into, information about beneficial or underlying owners, any concert arrangements, and any related assets or liabilities in the underlying market, including, where appropriate, positions held in commodity derivatives that are based on the same underlying and that share the same characteristics on other trading venues and in economically equivalent OTC contracts through members and participants; (c) request a person to terminate or reduce a position, on a temporary or permanent basis, and to unilaterally take action to ensure the termination or reduction of the position where the person does not comply with such request; and (d) require a person to provide, on a temporary basis, liquidity back into the market at an agreed price and volume with the express intent of mitigating the effects of a large or dominant position. ESMA shall develop draft regulatory technical standards to specify the content of position management controls, thereby taking into account the characteristics of the trading venues concerned. ESMA shall submit those draft regulatory technical standards to the Commission by 28 November 2021. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the second subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 9. The position limits and position management controls shall be transparent and non-discriminatory, specifying how they apply to persons and taking account of the nature and composition of market participants and of the use they make of the contracts submitted to trading. 10. The investment firm or market operator operating the trading venue shall: a) make public a weekly report with the aggregate positions held by the different categories of position holders for the different financial instruments traded on their platforms specifying the number of long and short positions by category of position holder, changes thereto since the previous report, the percentage of the total open interest represented by each category and the number of position holders in each category; b) provide the competent authority with a complete breakdown of the positions of all market participants, including any positions held on behalf of their clients on a daily basis c) Make public the general policy of position management controls, d) inform the competent authority of the details of position management controls, including the measures adopted towards specific market participants. The competent authority shall communicate the same information as well as the details of the position limits it has established to ESMA, which shall publish and maintain on its website a database with summaries of the position limits and position management controls. 11. The position limits of paragraph 1 shall be imposed by competent authorities pursuant to point (p) of Article 69(2). 12. ESMA shall develop draft regulatory technical standards to determine: (a) the criteria and methods for determining whether a position qualifies as reducing risks directly relating to commercial activities; (b) the methods to determine when positions of a person are to be aggregated within a group; (c) the criteria for determining whether a contract is an economically equivalent OTC contract to that traded on a trading venue, referred to in paragraph 1, in a way that facilitates the reporting of positions taken in equivalent OTC contracts to the relevant competent authority as determined in Article 58(2); (d) the definition of what constitutes significant volumes under paragraph 6 of this Article; (e) the methodology for aggregating and netting OTC and on-venue commodity derivatives positions to establish the net position for purposes of assessing compliance with the limits. Such methodologies shall establish criteria to determine which positions may be netted against one another and shall not facilitate the build-up of positions in a manner inconsistent with the objectives set out in paragraph 1 of this Article; (f) the procedure setting out how persons may apply for the exemption under the second subparagraph of paragraph 1 of this Article and how the relevant competent authority will approve such applications; (g) the method for calculation to determine the venue where the largest volume of trading in a commodity derivative takes place and significant volumes under paragraph 6 of this Article. ESMA shall submit those draft regulatory technical standards referred to in the first subparagraph to the Commission by [12 months after the entry into force of this Directive]. Power shall be delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 13. Competent authorities shall not impose limits which are more restrictive than those adopted pursuant to paragraph 1 except in exceptional cases where they are objectively justified and proportionate taking into account the liquidity of the specific market, the orderly functioning of that market and the characteristics of the underlying commodity, including its essential feature for the economy, teh security and safety of citizens. Competent authorities shall publish on their website the details of the more restrictive position limits they decide to impose, which shall be valid for an initial period not exceeding six months from the date of their publication on the website. The more restrictive position limits may be renewed for further periods not exceeding six months at a time if the grounds for the restriction continue to be applicable. If not renewed after that six-month period, they shall automatically expire. Where competent authorities decide to impose more restrictive position limits, they shall notify ESMA. The notification shall include a justification for the more restrictive position limits. ESMA shall, within 24 hours, issue an opinion on whether it considers that the more restrictive position limits are necessary to address the exceptional case. The opinion shall be published on ESMA’s website. Where a competent authority imposes limits contrary to an ESMA opinion, it shall immediately publish on its website a notice fully explaining its reasons for doing so. 14. Member States shall provide that competent authorities can apply their powers to impose sanctions under this Directive for the infringements of position limits set in accordance with this Article to: (a) positions held by persons situated or operating in its territory or abroad which exceed the limits on commodity derivative contracts the competent authority has set in relation to contracts on trading venues situated or operating in its territory or economically equivalent OTC contracts; (b) positions held by persons situated or operating in its territory which exceed the limits on commodity derivative contracts set by competent authorities in other Member States. 15. By 31 december 2025, ESMA shall submit to the Commission a report with a comprehensive assessment of the position limit and position management controls regimes. The report shall assess the effectiveness of the position limit and position management controls regimes to achieve the objectives mentioned in sub- paragraph 1 of Paragraph 1 of this Article. The report shall notably rely on the data provided competent authorities to ESMA in accordance with paragraphs 5 and 10 of this Article. Based on the report produced by ESMA and an impact assessment, the Commission shall, if appropriate, submit to the European Parliament and the Council a legislative proposal.
2022/10/20
Committee: ECON
Amendment 46 #
Proposal for a directive
Article 1 – paragraph 1 – point 7 b (new)
Directive 2014/65/EU
Article 58 – paragraph 1
7 b. Article 58, paragraph1 is replaced by the following: 1. Member States shall ensure that an investment firm or a market operator operating a trading venue, which trades commodity derivatives or emission allowances or derivatives thereof: (a) make public a weekly report with the aggregate positions held by the different categories of persons for the different commodity derivatives or emission allowances or derivatives thereof traded on their trading venue, specifying: – the number of long and short positions by such categories,; – changes thereto since the previous report,; – the percentage of the total open interest represented by each category and– the total trading volume per day, expressed as the number of derivatives contracts bought or sold in a given trading day, performed by each category and – the number of persons holding a position in each category in accordance with paragraph 4 and communicate that report to the competent authority and to ESMA; ESMA shall proceed to a centralised publication of the information included in those reports; - the average trading velocity, defined as the period between opening and closing a position, by each category. (b) provide the competent authority with a complete breakdown of the positions held by all persons, including the members or participants and the clients thereof, on that trading venue, at least on a daily basis. The obligation laid down in point (a) shall only apply when both the number of persons and their open positions exceed minimum thresholds. Position reporting shall not be applicable to any other securities as referred to in point (c) of point (44) of Article 4(1) that relate to a commodity or an underlying as referred to in Section C.10 of Annex I.
2022/10/20
Committee: ECON
Amendment 47 #
Proposal for a directive
Article 1 – paragraph 1 – point 7 c (new)
Directive 2014/65/EU
Article 58 – paragraph 4
7 c. Article 58, paragraph 4 is amended as follows: a) the second sub-paragraph is replaced by the following: 'The reports referred to in point (a) of paragraph 1 shall specify the number of long and short positions by category of persons, any changes thereto since the previous report, percent of total open interest represented by each category, and the number of persons in each category. the total trading volume per day represented by each category, and the number of persons in each category.' b) the following sub-paragraph is inserted after the third subparagraph: ' The reports referred to in point (a) of paragraph 1 and the breakdowns referred to in paragraph 2 shall provide for each contract in commodity derivatives the ratio between the total trading volume and the total number of contracts that are physically delivered on the expiry date.'
2022/10/20
Committee: ECON
Amendment 48 #
Proposal for a directive
Article 1 – paragraph 1 – point 7 d (new)
Directive 2014/65/EU
Article 58 – paragraph 4a (new)
7 d (new). The following paragraph 4a is inserted: 4a. Member States shall ensure that an investment firm or a market operator operating a trading venue which trades emission allowances or associated derivatives make publically available on a yearly basis the ratio between the total trading volume of emission allowances and associated derivatives and the verified emissions. Member States shall require members or participants of trading venues and investment firms, including systematic internalisers, that trade emission allowances or associated derivatives to report to the investment firm or market operator operating that trading venue the emission allowances corresponding to their verified and validated emissions on a yearly basis.
2022/10/20
Committee: ECON
Amendment 49 #
Proposal for a directive
Article 1 – paragraph 1 – point 9 a (new)
Directive 2014/65/EU
Annex I – Section C – point 6
(6)9 a. Section C point 6 of Annex 1 is replaced by the following: ‘6. Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, a MTF, or an OTF, except for wholesale energy products traded on an OTF that must be physically settled;
2022/10/20
Committee: ECON