BETA

Activities of Kay SWINBURNE related to 2013/0314(COD)

Plenary speeches (1)

2016/11/22
Dossiers: 2013/0314(COD)

Shadow reports (1)

2016/11/22
Committee: ECON
Dossiers: 2013/0314(COD)
Documents: PDF(1 MB) DOC(553 KB)

Amendments (68)

Proposal for a regulation
Recital 26

(26) The integrity and accuracy of benchmarks depends on the integrity and accuracy of the input data provided by contributors. It is essential that the obligations of the contributors in respect of this input data are clearly specified, can be relied on and are consistent with the benchmark administrator's controls and methodology. It is therefore necessary that ~~the~~, where appropriate and possible, the critical benchmark administrator produces a code of conduct to specify these requirements and ~~that the contrib~~reports to the competent author~~s are bound by that code of conduct~~ity any non-adherence or misconduct of contributors.

2015/01/23
Committee: ECON

Proposal for a regulation
Recital 29 a (new)

(29a) In order for a benchmark to be deemed critical under this Regulation it must be deemed systemic in nature or be used in a systemic manner and be vulnerable to manipulation in order to ensure regulatory proportionality.

2015/01/23
Committee: ECON

Proposal for a regulation
Recital 34

(34) This Regulation should take into account the Principles for financial benchmarks issued by the International Organization of Securities Commissions (IOSCO) (hereinafter referred to as ‘IOSCO Financial Benchmark Principles’) on the 17 July 2013 which serve as a global standard for regulatory requirements for benchmarks. It is necessary for investor protection that an assessment that the supervisions and regulation in any third country are equivalent to Union supervision and regulation of benchmarks takes place before any benchmark provided from that third country can be used in the Unionas well as the Principles for Oil Price Reporting Agencies issued by IOSCO on the 5th October 2012 (hereinafter referred to as 'IOSCO PRA Principles') which serve as a global standard for regulatory requirements for benchmarks.

2015/01/23
Committee: ECON

Proposal for a regulation
Recital 34 a (new)

(34a) This Regulation also introduces a recognition regime allowing administrators of benchmarks located in a third country to provide their benchmarks in the Union provided they fully comply with the IOSCO Financial Benchmark principles and provided that effective cooperation arrangements exist with their home country supervisor.

2015/01/23
Committee: ECON

Proposal for a regulation
Recital 51 a (new)

(51a) Physical commodities markets present unique characteristics which must be taken account of in order to avoid undermining the integrity of commodity benchmarks and negatively impacting commodity market transparency, European security of supply, competitiveness and the interests of consumers. Accordingly, certain articles in this Regulation are not appropriate to apply to commodity benchmarks. Annex III of this Regulation, which closely reflects principles developed for commodity benchmarks by IOSCO in collaboration with the International Energy Agency and the International Energy Forum among others, is specifically designed to apply to all commodity benchmarks which fall within the scope of this Regulation and sets out which of the requirements in the Regulation will not apply to commodity benchmarks.

2015/01/23
Committee: ECON

Proposal for a regulation
Recital 51 b (new)

(51b) In the cases where this Regulation captures or potentially captures supervised entities and markets covered by Regulation (EU) No 1227/2011 of the European Parliament and the Council1a (REMIT), the Agency for the Cooperation of Energy Regulators should be fully consulted by ESMA in order to draw on ACER's expertise in energy markets and to mitigate any dual regulation. _____________ 1a Regulation (EU) No 1227/2011/EU of the European Parliament and of the Council on wholesale energy market integrity and transparency (OJ L 326, 8.12.2011, p. 1).

2015/01/23
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1

This Regulation introduces a common framework to ensure the accuracy and integrity of financial indices used as benchmarks in financial instruments and financial contracts in the Union. The Regulation thereby contributes to the proper functioning of the internal market while achieving a high level of consumer and investor protection.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1

1. This Regulation shall apply to the provision of financial benchmarks, the contribution of input data to a financial benchmark and the use of a financial benchmark within the Union.

2015/01/23
Committee: ECON

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

(a) ~~Members of the European System of Central Banks (ESCB).~~Central Banks when they are exercising their monetary policy functions;

2015/01/23
Committee: ECON

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

(aa) public authorities only when they provide or are controlling the provision of benchmarks or indices provided for public policy purposes, including measures of employment, economic activity and inflation;

2015/01/23
Committee: ECON

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

(b) Central banks of third countries whose legal framework is recognised by the Commission as providing for principles, standards and procedures equivalent to the requirements on the accuracy, integrity and independence of the provision of benchmarks provided for by this Regulation.deleted

2015/01/23
Committee: ECON

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

(ba) credit unions within the meaning of Directive 2013/36/EU of the European Parliament and the Council1a (CRD IV). ______________ 1a Directive 2013/36/EU of the European Parliament and the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).

2015/01/23
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 3

3. The Commission shall establish a list of central banks of third countries referred to in paragraph 2(b). Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 38(2).deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 2

(2) ‘benchmark’ means any index by reference to which the amount payable under a financial instrument or a financial contract, or the value of a financial instrument is determined ~~or an index that is used to measure the performance of an investment fund;~~

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 2 a (new)

(2a) 'family of benchmarks' means the group of benchmarks provided by the same administrator determined from input data of a similar nature which provides specific measures of the same or similar market or economic reality.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 5

(5) ‘user of a benchmark’ means: a~~ny person who issues or owns a financial instrument or is party to a financial contract which references a benchmark;~~ ) the issuance of a financial instrument which references an index or combination of indices while holding positions in that instrument; b) the determination of the amount payable under a financial instrument or a financial contract by referencing an index or a combination of indices; c) being party to a financial contract which references an index or a combination of indices; d) the determination of the performance of an investment fund through an index or combination of indices with the purpose of tracking the return of such index or combination of indices or of defining the asset allocation of a portfolio or of computing the performance fees.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 11

(11) ‘regulated data’ means the following: input data ~~that is~~ contributed dentirectly from: a) a trading venue as defined in point (254) of paragraph 1 of Article 24 of ~~[MIFIR] or~~Directive 2014/65/EU; or b) an approved publication arrangement as defined in point (1852) of paragraph 1 of Article 24 of ~~[MIFIR ] or an approved reporting arrangement~~Directive 2014/65/EU or a consolidated tape provider as defined in point (53) of paragraph 1 of Article 4 of Directive 2014/65/EU, in accordance with mandatory post-trade transparency requirements, but only with reference to data of transactions concerning financial instruments that are traded on a trading venue; or c) an approved reporting mechanism as defined in point (2054) of paragraph 1 of Article ~~2 of [MIFIR] in accordance with mandatory post trade data requirements or~~4 of Directive 2014/65/EU, but only with reference to data of transactions concerning financial instruments that are traded on a trading venue and that must be disclosed in accordance with mandatory post trade transparency requirements; or d) a third country trading venue, publication arrangement or reporting mechanism equivalent to those specified in this article including transactional data aggregators and transactional data collectors of statutorily required regulatory data; e) an electricity exchange as referred to in point (j) of paragraph 1 of Article 37 of Directive 2009/72/EC19; or f) a natural gas exchange as referred to in point (j) of paragraph 1 of Article 41 of Directive 2009/73/EC1;20 or g) an auction platform referred to in Article 26 or in Article 30 of Regulation (EU) No 1031/2010 of the European Parliament and of the Council; h) data as defined in Article 8(1) of Regulation (EU) No 1227/2011 and further elaborated by the European Commission in Implementing Regulation (EU) No 1348/2014; i) net asset values of the units of undertakings for collective investments in transferable securities (UCITs) as defined in Article 1(2) of Directive 2009/65/EU; __________________ 19 OJ L 211, 14.8.2009, p. 55. ~~19 20~~ OJ L 9, 14.8.2009, p. 112. 20

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 14 – point g

~~(g) central counterparties as defined in point (1) of Article 2 of Regulation (EU) No 648/2012 of the European Parliament and of the Council25 ; __________________ 25 OJ L 174, 1.7.2011, p. 1.~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 14 – point i

~~(i) an administrator;~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 21

(21) ‘critical benchmark’ means a benchmark, ~~the majority of contributors to which are supervised entities and that reference financial instruments having a notional value of at least 500 billion euro~~other than a benchmark calculated using regulated data within the meaning of subpoint (h) of point 11 of this paragraph, the majority of contributors to which are supervised entities and fulfil the criticality criteria set out in Article 13;

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 21

(21) ‘critical benchmark’ means a submission based benchmark, the majority of whose contributors ~~to which~~, or underlying panel of contributors, are supervised entities, and ~~that reference financial instruments having a notional value of at least 500 billion euro~~fulfil the criticality criteria set out in Article 13;

2015/01/23
Committee: ECON

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

2a. Where appropriate and proportionate, the provision of a benchmark shall be operationally separated from the part of the administrator's business that generates a conflict of interest. Where conflicts of interest may arise within the administrator due to its ownership structure, controlling interests or other activities conducted by any entity owning or controlling the administrator or that is owned or controlled by the administrator or any of its affiliates, the administrator shall establish an independent oversight function which shall include a balanced representation of a range of stakeholders where the stakeholders are known, subscribers and contributors. If such conflicts cannot be adequately managed, the administrator shall cease any activities or relationships that create these conflicts or cease producing the benchmark.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 5 – paragraph 3 a (new)

3a. The administrator shall establish specific control procedures to ensure the integrity and reliability of the employee or person determining the benchmark, this could include an internal sign off by management before the dissemination of a benchmark or an appropriate substitution for example in the case of a benchmark that is updated intra-day or on a real-time basis.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 5 a (new)

Article 5a Oversight Function Requirement 1. The administrator shall establish and maintain a permanent and effective oversight function to ensure oversight of all aspects of the provision of its benchmarks. 2. The oversight function shall operate independently and shall include the following responsibilities, which shall be adjusted for the complexity, use and vulnerability of the benchmark: (a) periodically reviewing the benchmark's definition and methodology; (b) overseeing any changes to the benchmark methodology and authorising the administrator to consult on such changes; (c) overseeing the administrator's control framework, the management and operation of the benchmark, and, where a benchmark makes use of contributors, the code of conduct referred to in Article 9(1); (d) reviewing and approving procedures for cessation of the benchmark, including any consultation about a cessation; (e) overseeing any third party involved in the benchmark provision, including calculation or dissemination agents; (f) assessing internal and external audits or reviews, and monitoring the implementation of identified actions; (g) where the benchmark makes use of contributors, monitoring the input data and contributors and the actions of the administrator in challenging or validating contributions of input data; (h) where the benchmark makes use of contributors, taking effective measures in respect of any breaches of the code of conduct; and (i) where the benchmark makes use of contributors, reporting to the relevant competent authorities any misconduct by contributors or administrators of which the oversight function becomes aware, and any potentially anomalous or suspicious input data. 3. The oversight function shall be one of the following: (a) where the administrator is owned or controlled by its contributors or users, a separate board or committee whose composition ensures its independence and the absence of conflicts of interest. Where the administrator is owned or controlled by contributors, a majority of the committee shall not be contributors. Where the administrator is owned or controlled by users, a majority of the committee shall not be users; (b) Where the administrator is not owned or controlled by its contributors or users, an internal board or committee should be established. The majority of the members of the internal board or committee shall not be involved in the provision of any benchmark that they oversee; (c) where the administrator is able to demonstrate that, in view of the nature, scale and complexity of its provision of the benchmark and the risk and impact of the benchmark, the requirements under points a and b are not proportionate, a natural person may provide the function of oversight officer. The oversight officer shall not be involved in the provision of any benchmark that it oversees. 4. The oversight function may exercise oversight of more than one benchmark provided by an administrator provided that it otherwise complies with the other requirements of Title I and Title IV.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 5 b (new)

Article 5b Control Framework Requirement 1. The administrator shall have a control framework that ensures that the benchmark is provided and published or made available in accordance with this regulation. 2. The control framework shall be proportionate to the level of conflicts of interest identified, the extent of discretion in the benchmark provision and the nature of benchmark input data and include: a) the management of operational risk; b) the contingency procedures that are in place in the event of a disruption to the suppliers of data for the benchmark provision. 3. Where input data is not transaction data, the administrator shall: a) establish measures to ensure, to the extent possible, that submitters provide evidence to satisfy the administrator that they comply with the code of conduct referred to in Article 9(1) and the applicable standards for the input data; b) establish measures to monitor input data including where feasible, monitoring input data before publication of the benchmark and validating the input data after publication in order to identify errors and anomalies. 4. The control framework shall be documented, reviewed and updated as appropriate and, upon request, made available to users and the relevant competent authority.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 5 c (new)

Article 5c Accountability Framework Requirements 1. The administrator shall have an accountability framework covering record keeping, auditing and review, and complaints process that provides evidence of compliance with the requirements of this regulation. 2. The administrator shall appoint an independent internal or external function, with the necessary capability to review and report on the administrator's compliance with the benchmark methodology and this Regulation. 3. For non-critical benchmarks, the administrator shall publish and maintain a compliance statement in which the administrator shall report on its compliance with this Regulation. The compliance statement shall at least cover the requirements laid out in Articles 5(1), 5 (2), 5(4), 5(5), 5(6), 5a, 5b, 5d, 7, 7a, 7b, 7c, 8(1), 8(2), 9(1), 11(2a), 11(2b), 17(1). where the administrator does not comply with the requirements laid down in Articles 5(1), 5(2), 5(4), 5(5), 5(6), 5a, 5b, 5d, 7, 7a, 7c, 7d, 8(1), 8(2), 9(1), 9(2), 11(2a), 11(2b), 17(1) of this Regulation, the compliance statement shall clearly state why it is appropriate for that administrator not to comply with those provisions. 4. The administrator of a non-critical benchmark shall appoint either its statutory auditor or an external auditor to periodically and not less than once every five years or when a material change to the benchmark takes place, to review and report on the accuracy of the administrator's compliance statement. 5. Upon request of the relevant competent authority, or any user of the benchmark, the administrator shall provide or publish details of the reviews in paragraph 2 or paragraph 4.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 5 d (new)

Article 5d Record Keeping Requirements 1. The administrator shall keep records of: a) all input data; b) any exercise of judgement or discretion by the administrator and, where applicable, by assessors, in the benchmark determination, including the full reasoning for such judgements or discretion; c) records of the disregard of any input data, in particular where it conformed to the requirements of the benchmark methodology, and the rationale for such disregard; d) the identities of the submitters and of the natural persons employed by the administrators for determining the benchmarks; e) all documents relating to any complaint; f) records of relevant communications between any relevant person employed by the administrator for the provision of the benchmark and the contributors or submitters in respect of the benchmark. 2. Where the benchmark is based on contributors, the contributor shall also keep records of any relevant communications, including with other contributors. 3. The administrator shall keep the records set out in paragraph 1 for at least five years in a form that it is possible to replicate and fully understand the benchmark calculations and enable an audit or evaluation of the input data, calculations, judgements and discretion. Records of telephone conversations or electronic communications shall be provided to the persons involved in the conversation or communication upon request and shall be kept for a period of three years. 4. Point (a) of paragraph 1 of this Article shall not apply to trading venues for financial instruments listed in Directive 2014/65/EU, Annex 1 Section D.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 5 e (new)

Article 5e ESMA regulatory technical standards on governance and control requirements ESMA shall develop draft regulatory standards to specify further the governance and control requirements under Articles 5(2), 5(4), 5(6), 5a(2), 5a(3), 5b(2), 5b(3), 5c(2), 5c(2a), 5c(4), 5c(5), 5(3). ESMA shall take account of the following: a) developments in benchmarks and financial markets in light of international convergence of supervisory practice in relation to governance requirements of benchmarks; b) specific features of different types of benchmarks and administrators including size and impact, sectoral features and the types of input data used; c) distinctions between critical and noncritical benchmarks Where these regulatory technical standards capture supervised entities and markets covered by Regulation (EU) No 1227/2011 (REMIT), the Agency for the Cooperation of Energy Regulators (ACER) should be fully consulted by ESMA in order to draw on ACER's expertise in energy markets and to mitigate dual regulation. ESMA shall submit those draft regulatory technical standards to the Commission by [...] Power is delegated to the commission to adopt the regulatory technical standards referred to in the first paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 7 – paragraph 3

~~3. The Commission shall be empowered to adopt~~ delegated acts in accordance with Article 37 concerning measures to further specify the controls in respect of input data, the circumstances under which transaction data may not be sufficient and how this can be demonstrated to supervisors and the requirements for developing methodologies . The Commission shall take account of the following: (a) developments in benchmarks and financial markets in light of international convergence of supervisory practice in relation to benchmarks; (b) specific features of different benchmarks and types of benchmarks; and (c) the vulnerability of benchmarks to manipulation in light of the methodologies and input data used;

2015/01/23
Committee: ECON

Proposal for a regulation
Article 7 – paragraph 3 a (new)

3a. Where the input data of a benchmark is contributed directly from a front office function, which means any department, division, group, or personnel of contributors or any of its affiliates that perform any pricing, trading, sales, marketing, advertising, solicitation, structuring or brokerage activities, the administrator shall: a) where reasonably available, obtain data from other sources that corroborates that input data; b) ensure that contributors have adequate internal oversight and verification procedures that allow for: - validation of input contributed prior or post submission, including procedures for multiple reviews by senior staff to check inputs and internal sign off procedures by management for submitting inputs; - the physical separation of employees in the front office function and reporting lines; - full consideration of conflict management measures to identify, disclose, manage, mitigate and avoid existing or potential incentives to manipulate or otherwise influence data inputs, including through remuneration policies and conflict of interest between the contribution of input data activities and any other business of the contributor, its affiliates or their respective clients or customers.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 7 a (new)

Article 7a ESMA guidelines on input data and methodology ESMA shall develop and maintain guidelines to supplement the controls in respect of input data, the circumstances under which transaction data may not be sufficient and how this can be demonstrated to supervisors and the requirements for developing methodologies, distinguishing for different types of benchmarks and sectors as set out in this Regulation. ESMA shall take account of the following: a) developments in benchmarks and financial markets in light of international convergence of supervisory practice in relation to benchmarks; b) specific features of different benchmarks and types of benchmarks; and c) the vulnerability of benchmarks to manipulation in light of the methodologies and input data used. d) that sufficient detail should be available to users to allow them to understand how a benchmark is provided in order to assess its relevance and appropriateness as a reference. ESMA shall issue those guidelines by [...].

2015/01/23
Committee: ECON

Proposal for a regulation
Article 9 – paragraph 1

1. TWhere a benchmark is based on input data from contributors, the administrator shall ~~adopt~~draw up a code of conduct for each benchmark clearly specifying the ~~administrator's and~~ contributors' responsibilities ~~and obligations~~ with respect to the ~~provision of the benchmark which shall include a clear description of the input data to be provided, and at least the elements set out in Section D of Annex I~~contribution of input data and shall ensure contributors confirm whenever there is a material change in the code of conduct, that they continue to be compliant.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 9 – paragraph 2

2. The code of conduct shall ~~be signed by the administrator and the contributors and shall be legally binding on all parties to it.~~ include at least the following elements: a) a clear description of the input data to be provided and the requirements necessary to ensure that the input data to be provided in accordance with Articles 7 and 8; b) a list of legal persons who may contribute input data to the administrator including procedures to evaluate the identity of a contributor and any submitters; c) policies to ensure contributors provide all relevant input data; and d) the systems and controls that the contributor is required to establish including: - procedures for submitting input data including requirements for the contributor to specify whether the input data is transaction data and whether the input data conforms with the administrator's requirements; -policies on the use of discretion in providing input data; -any requirement for the validation of input data before it is provided to the administrator; - record keeping policies; - suspicious input data reporting requirements; - conflict management requirements.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 10

1. When the input data contributed to a benchmark is regulated data, Articles 7(1)(b), 8(1), 8(2) and Article 9 shall not apply. 2. The administrator shall enter into an agreement with the contributor of the regulated data which clearly identifies to the contributor the benchmarks that the administrator is determining with the regulated data and shall ensure compliance with this Regulation.Article 10 deleted Regulated data

2015/01/23
Committee: ECON

Proposal for a regulation
Article 12

Specific requirements for different types 1. In addition to the requirements of the Title II, the specific requirements set out in Annex II shall apply to inter-bank interest rate benchmarks. 2. In addition to the requirements of the Title II, the specific requirements set out in Annex III shall apply to commodity benchmarks. 3. The Commission shall be empowered to adopt delegated acts in accordance with Article 39 to specify, or adjust, in light of market and technological developments and international developments, the following elements of Annexes II and III: (a) The period of time after which input data shall be published (Annex II point 6) (b) The processes for election and nomination and responsibilities of the oversight committee (Annex II points 8, 9 and 10) (c) The frequency of audits (Annex II point 12) (d) The processes by which input data is provided to be specified in the code of conduct (Annex II point 13) (e) The systems and controls of a contributor (Annex II point 16) (f) The records which are to be kept by a contributor and the medium in which they are to be kept(Annex II point 17 and 18 (g) The findings to be reported to management by the compliance function of the contributor (Annex II point 19) (h) The frequency of internal reviews of input data and procedures (Annex II point 20) (i) The frequency of external audits of the contributor's input data (Annex II point 21) (j) The criteria and procedures for developing the benchmark (Annex III point 1 a) (k) The elements to be included in the methodology and the description of the methodology (Annex III point 1 and 2) (l) The requirements of the administrator regarding the quality and the integrity of the benchmark calculation and the content of the description attached to each calculation (Annex III point 5 and 6)Article 12 deleted of benchmarks and sectors

2015/01/23
Committee: ECON

Proposal for a regulation
Article 12 a (new)

Article 12a Regulated data Where benchmarks are determined by the application of a formula to data set out in point 11(ii) of Article 3(1), Articles 7(1)(b), 7(1)(c), 7(2), 7(3), 8(1), 8(2), 9 and 11 shall not apply to the provision of and the contribution to such benchmarks. Article 5d(1)(a) shall not apply to the provision of such benchmarks with reference to input data that are contributed entirely and without change as specified in Article 3(1)(20a). These requirements shall also not apply for purposes of Article 5c(2a).

2015/01/23
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 1 – subparagraph 1

~~The Commission shall adopt a list of benchmarks located within the Union which are critical benchmarks,~~A benchmark shall be deemed to be a critical benchmark in the following circumstances: a) the benchmark is used as a reference for financial instruments and financial contracts having an average value of at least EUR 1,000,000,000,000 as measured on a rolling basis over a 1 year period; b) the majority of the contributors are entities supervised by a member of the European System of Financial Supervisors (ESFS) and c) more than 50% of the benchmark contributors are supervised in more than one Member State of the EU. ESMA shall develop draft regulatory standards to: - specify how the market value of financial instruments other than derivatives and the notional vale of derivatives are assessed in order to be compared with the EUR 1,000,000,000,000 threshold ESMA shall submit those draft regulatory standards to the Commission by xxx Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with the ~~definition~~procedure laid down in Article ~~3(21).~~ s 10 to 14 of Regulation (EU) No 1095/2010.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 2

2. Within 5 working days from the date of application of the decision including a critical benchmark in the list referred to in paragraph 1of this Article, the administrator of that critical benchmark shall notify the code of conduct to the relevant competent authority. The relevant competent authority shall verify within 30 days whether the content of the code of conduct complies with the requirements of this Regulation. In case the relevant competent authority finds elements which do not comply with the requirements of this Regulation, it shall inform the administrator. The administrator shall adjust the code of conduct to ensure that it complies with the requirements of this Regulation within 30 days of such a request.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 2 a (new)

2a. A competent authority of a Member State may disapply point (b) of the first subparagraph of paragraph 1 and deem a benchmark administered within its jurisdiction to be critical if it considers that the cessation of that benchmark would have a significant adverse impact on the integrity of markets, financial stability, consumers, the national economy, or the financing of households within its jurisdiction. In such a case, it shall notify ESMA of its decision within five days.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 2 b (new)

2b. In the absence of an agreement between the competent authorities, the requesting competent authority may refer the matter to ESMA for assistance under point (c) of Article 31 of Regulation (EU) No 1095/2010.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 1

1. Where contributors, comprising at least 20% of the contributors to a critical benchmark have ceased contributing, or there are sufficient indications that at least 20% of the contributors are likely to cease contributing, in any year, the competent authority of the administrator of a critical benchmark shall have the power to: (a) require supervised entities, selected in accordance with paragraphs 2, to contribute input data to the administrator in accordance with the methodology, code of conduct or other rules; (b) determine the form in which, and the time by which, any input data is to be contributed; (c) change the code of conduct, methodology or other rules of the critical benchmark.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 2

2. For a critical benchmark, the supervised entities that are required to contribute in accordance with paragraph 1 shall be determined by the competent authority of the administrator on the basis of the following criteria: (a) the size of the supervised entity´s actual and potential participIf one or more supervised contributors to a critical benchmark intends to cease contributing input data, they shall promptly notify the benchmark administrator in writing, as well as the competent authority responsible for its oversight. The administrator shall immediately inform its competent authority and, within 15 working days of receipt of such notification, and shall provide them with an assessment of the implication ins of the ~~market that~~cessation on the capability of the benchmark ~~seeks~~ to measure~~; (b) the supervised entity's expertise and ability to provide input data of the necessary qu~~ the underlying market or economic reality.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 2 a (new)

2 a. The administrator shall also inform the remaining supervised contributors to the critical benchmark of the notice to cease contributions and seek to determine whether others intend to cease contributing.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 3 a (new)

3a. The competent authority shall have the power to require the contributor which made the notification intending to cease contributing input data to continue to contribute data until such time as the competent authority has completed its assessment.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 3 b (new)

3b. The supervised entities referred to in paragraph 4a shall be determined by the competent authority of the administrator, with the assistance of the competent authority of the supervised entities, on the basis of the size of the supervised entity's participation in the market that the benchmark seeks to measure, as well as its expertise in that market and ability to contribute accurate input data based on that expertise. Due consideration should be taken of the existence of appropriate alternative benchmarks to which financial contracts and financial instruments referencing the critical benchmark could transition to.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 4

4. The competent authority of the administrator shall review each measure adopted under paragraph 1 one year following its adoption. It shall revoke it if: (a) judges that the contributors are likely to continue contributing input data for at least 1 year if the power were revoked which shall be evidenced by at least: (1) a written commitment by the contributors to the administrator and the competent authority to continue contributing input data to the critical benchmark for at least one year if the mandatory contribution power were revoked; (2) a written report by the administrator to the competent authority providing evidence for its assessment that the critical benchmark's continued viability can be assured once mandatory participation has been revoked. (b) judges that an acceptable substitute benchmark is available and users of the critical benchmark can switch to this substitute at minimal costs which shall be evidenced by at least a written report by the administrator detailing the means of transition to a substitute benchmark and the ability and costs to users of transferring to this benchmark.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 4 a (new)

4a. In the event that the competent authority considers that the representativeness of a critical benchmark is put at risk, it shall have the power to: a) require supervised entities in accordance with paragraph 5, to contribute input data to the administrator in accordance with the methodology, code of conduct or other rules for an appropriate transition period dependent upon the average length of contract based on the relevant benchmark; b) determine the time by which input data shall be contributed, without obliging supervised entities to trade or commit to trade; c) change the code of conduct, methodology or other rules of the critical benchmark after discussion with the administrator.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 5 a (new)

5a. Following the transition period, those supervised entities which still intend to cease contributing may apply to the competent authority of the administrator to have the measures adopted under paragraph 4a revoked. The competent authority of the administrator shall revoke the measures if; a) it judges that the benchmark can continue once the contributors mandated to contribute input data have ceased contributing; or b) it judges, following consultation with contributors and users that an acceptable substitute benchmark is available and users of the critical benchmark are able to switch to that substitute at minimal costs; or c) it judges that no appropriate alternative contributors can be identified and the cessation of contributions from the relevant supervised entities would weaken the benchmark sufficiently to require the winding down of the benchmark. In the case of points a) and b) the supervised entities intending to cease contributing must do so on the same date to be determined by the competent authority of the administrator.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 5 b (new)

5b. In the event that a critical benchmark should be wound down each supervised contributor to the critical benchmark shall continue to contribute input data until the date that the benchmark ceases following an appropriate transition period as determined by the competent authority.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 5 c (new)

5c. ESMA shall develop draft regulatory technical standards to further specify: a) the time period in which the competent authority shall complete an assessment of how representative each critical benchmark referred to in paragraph 3 is; b) the duration of the transition periods for mandatory contributions referred to in paragraphs 4a and 5b, taking into account the following criteria: i) volume of contracts outstanding; ii) number and diversity of users especially retail users; iii) weighted average maturity of the contracts; iv) existence and robustness of alternative benchmarks; v) liquidity of the underlying interest that the benchmark represents; c) the format and content of the review under paragraph 5a; d) what constitutes a supervised entity’s expertise in the market in accordance with paragraph 5b. ESMA shall submit those draft regulatory technical standards to the Commission by [...]. Power is delegate to the Commission to adopt the regulatory technical standards referred to in the first sub-paragraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 14 a (new)

Article 14a Commodity Benchmarks 1. The specific requirements laid down in Annex Ia shall apply to commodity benchmarks. 2. The requirements of Title II, with the exception of Article 6 shall not apply to commodity benchmarks.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 16

1. An administrator shall publish the input data used to determine the benchmark immediately after publication of the benchmark except where publication would have serious adverse consequences for the contributors or adversely affect the reliability or integrity of the benchmark. In such cases publication may be delayed for a period that significantly diminishes these consequences. Any personal data included in input data shall not be published. 2. The Commission shall be empowered to adopt delegated acts in accordance with Article 37 concerning measures to further specify the information to be disclosed in accordance with paragraph 1, the means of publication as well as the circumstances when publication may be delayed and the means by which it shall be transmitted.Article 16 deleted Transparency of input data

2015/01/23
Committee: ECON

Proposal for a regulation
Article 18

1. Where a supervised entity intends to enter into a financial contract with a consumer, that supervised entity shall first obtain the necessary information regarding the consumer's knowledge and experience with respect to the benchmark, his financial situation and his objectives in respect of that financial contract, and the benchmark statement published in accordance with Article 15 and shall assess whether referencing the financial contract to that benchmark is suitable for him. 2. Where the supervised entity considers, on the basis of the assessment under paragraph 1, that the benchmark is not suitable for the consumer, the supervised entity shall warn the consumer in writing with reasons.Article 18 deleted Assessment of suitability

2015/01/23
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 1

1. Where a supervised entity intends to enter into a financial contract with a consumer, that supervised entity shall first obtain the necessary information regarding the consumer's knowledge and experience with respect to the benchmark, his financial situation and his objectives in respect of that financial contract, and the benchmark statement published in accordance with Article 15 and shall assess whether referencing the financial contract to that benchmark is suitable for himis governed by Directive 2014/17/EU [Mortgage Credit Directive], that supervised entity shall provide the consumer with the benchmark statement required under Article 15 of this Regulation.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 2

2. ~~Where t~~The supervised entity ~~considers, on the basis of the assessment under paragraph 1, that the benchmark is not suitable for the consumer, the supervised entity shall warn the consumer in writing with reasons~~shall make the consumer aware of the key characteristics of the benchmark and any risks incurred as a result of the use of the benchmark.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 21 a (new)

Article 21a EU administrator endorsement regime for benchmarks provided in a third country An administrator located in the Union and authorised or registered in accordance with Articles 23 and 23a may apply to its competent authority to endorse a benchmark or family of benchmarks provided in a third country for use in the Union provided it fully conforms with the IOSCO Financial Benchmark Principles.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 23 – paragraph 3

3. The applicant administrator shall provide all information necessary to satisfy the competent authority that it~~he applicant administrator~~ has established, at the time of authorisation or registration, all the necessary arrangements to meet the requirements laid down in this Regulation. It shall also provide the necessary data to calculate the value referred to in Article 13 paragraph 1 or estimate thereof, where available, for each benchmark.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 25

Notification to ESMA of use of an index 1. Whenever a competent authority becomes aware that an index is being used as a reference to a financial instrument, or that a request for admission to trading has been made to a trading venue supervised by that competent authority in respect of a financial instrument that references an index, that competent authority shall notify ESMA within 10 working days. 2. Within 10 working days of any notification ESMA shall notify the relevant administrator of the benchmark providing full details of its use and requesting the administrator to confirm that it consents to this use of the benchmark within 10 working days. 3. Without prejudice to Article 30 [MIFIR], where the administrator does not confirm to ESMA its consent within the time limit set out in paragraph 2, ESMA shall notify the relevant competent authority which shall request that the trading venue withdraw the listing of that financial instrument or refuse its admission to trading within 10 working days. 4. ESMA shall publish on its website a list of all notifications under paragraphs 1, 2 and 3. ESMA shall develop draft implementing technical standards to determine the procedures and forms for exchange of information referred to in paragraph 1 and 2. ESMA shall submit the draft implementing technical standards referred to in the first subparagraphs to the Commission by [XXXX]. Power is conferred to the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation 1095/2010.Article 25 deleted in a financial instrument

2015/01/23
Committee: ECON

Proposal for a regulation
Article 30 – paragraph 1 – point c

(c) in relation to ~~benchmarks whose input data is commoditie~~commodity benchmarks, request information from ~~market participant~~contributors on related spot markets according, where applicable, to standardized formats~~, obtain~~ and reports on transactions~~, and have direct access to traders' systems~~;

2015/01/23
Committee: ECON

Proposal for a regulation
Article 34 – paragraph 1

1. Within 30 working days from the ~~entry into force of the decision~~inclusion of a benchmark in the list of critical benchmarks referred to in Article 13(1) determining a benchmark as critical benchmark, the relevant competent authority shall establish a college of competent authorities where appropriate.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 34 – paragraph 2

2. The college shall comprise the competent authority of the administrator, ESMA, and the competent authorities of the major contributors.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 34 – paragraph 9

9. In the absence of agreement between the members of the college ~~on whether to take any measures~~, competent authorities other than ESMA may refer~~red~~ to ~~in paragraph 8, within 15 working days after the matter was notified to th~~ESMA any of the following situations: a) where a competent authority has not communicated essential information; b) where cfoll~~ege~~owing a request made under paragraph 3, the competent authority of the administrator may adopt a decision. Any deviation of that decision from the opinions expressed by the other members of the college and, where appropriate, ESMA shall be fully reasoned. The competent authority of the administrator shall notify its decision, without undue delay,has notified the requesting authority that the requirements of that paragraph are not fulfilled or where it has not acted upon such a request within a reasonable time; c) where the competent authorities have failed to agree the matters set out in paragraph 6; d) in the case of a critical benchmark, where there is a disagreement regarding the measures to be taken in accordance with Articles 23 and 24. Where 30 working days after referral to ESMA the issue is not settled, the competent authority of the administrator shall take the decision and provide a detailed explanation in writing of its decision to the authorities referred to in the ~~college~~first subparagraph and to ESMA.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 34 – paragraph 9 a (new)

9a. Any of the competent authorities within a college that fails to agree on any of the measures to be taken with points (a) (b) and (d) of paragraph 4 of Article 14 may refer the matter to ESMA for assistance under point (c) of Article 31 of Regulation (EU) No 1095/2010.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 34 – paragraph 10

10. Competent authorities other than ESMA may refer to ESMA any of the following situations: (a) where a competent authority has not communicated essential information; (b) where, following a request made under paragraph 3, the competent authority of the administrator has notified the requesting authority that the requirements of that paragraph are not fulfilled or where it has not acted upon such request within a reasonable time; (c) where the competent authorities have failed to agree the matters set out in paragraph 6; (d) where the benchmark is a critical benchmark, where there is a disagreement with the measure taken in accordance with Articles 14, 23, 24 and 31. Without prejudice to Article 258 TFEU, ESMA may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010. ESMA may also assist the competent authorities in developing consistent cooperation practices on its own initiative in accordance with the second subparagraph of Article 19(1) of that Regulation.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 39 – paragraph 4

4. ~~The use of a benchmark shall be permitted by the relevant competent authority of the Member State whe~~Unless the Commission has adopted an equivalence decision as referred the administrator is located until such time as the benchmark references financial instruments and financial contracts worth no more than 5% by value of the financial instruments and financial contracts that referenced this benchmarko in paragraph 2 or paragraph 2a of Article 20, supervised entities in the Union shall only use a benchmark provided by an administrator located in at th~~e time of e~~ird country, in~~to force of this Regulation. No financial instruments or financial contracts shall reference such an existing benchmark after the entry into~~ existing and new financial contracts or instruments for 5 years from the date of application of this Rregulation.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 40 – paragraph 1 a (new)

The Commission shall review the evolution of international principles applicable to commodity benchmarks in particular the application of IOSCO Price Reporting Agency principles and report to the Parliament and Council every four years after the date of entry into force of this Regulation. This report shall be accompanied by a legislative proposal if appropriate and pay particular attention to the suitability of the requirements in Annex Ia.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 41 – paragraph 2

It shall apply from [12 months ~~after~~from the entry into force] of the delegated acts adopted by the Commission under this Regulation.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 41 – paragraph 3

However, Article 13(1) and 34 shall apply from [6 months after ~~entry into force]~~the delegated acts adopted by the Commission under this regulation.

2015/01/23
Committee: ECON