Activities of Kay SWINBURNE related to 2017/0090(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivatives contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories PDF (671 KB) DOC (97 KB)
Amendments (38)
Amendment 38 #
Proposal for a regulation
Recital 6 a (new)
Recital 6 a (new)
(6a) Those financial counterparties that do not meet thresholds pursuant to Article 10 (4)(b) and which use derivatives for risk reduction and hedging purposes only, therefore not posing a significant risk within the Union financial system, are considered to be small financial counterparties, including inter alia smaller retail banks, pension funds, real estate funds and employee share purchase plans.
Amendment 42 #
Proposal for a regulation
Recital 8 a (new)
Recital 8 a (new)
(8a) Ensuring that the clearing obligation reduces systemic risk requires a process of identification of classes of derivatives that should be subject to that obligation. That process should take into account the fact that not all CCP-cleared OTC derivative contracts can be considered suitable for mandatory CCP clearing. OTC derivatives which are concluded as part of a risk reduction service, such as portfolio compression and other non price forming post - trade risk reduction services that reduce non-market risks in derivatives portfolios without changing the market risk of the portfolios in order to reduce the risk in OTC derivatives not cleared by a CCP, should not be subject to the clearing obligation.
Amendment 54 #
Proposal for a regulation
Recital 13
Recital 13
(13) The requirement to report exchange-traded derivative contracts (‘ETDs’) imposes a significant burden on counterparties because of the high volume of ETDs that are concluded on a daily basis. Moreover, since RegThe European Commission public consultation (EU) No 600/2014 of the European Parliament andon fitness check on supervisory reporting, which was published on 1 December 2017, aims to gather evidence ofn the Council22 requires every ETD to be cleared by a CCP, CCPs already hold the vast majority of the details of those contracts. To reduce the burden of reporting ETDs, the rescost of compliance with existing supervisory reporting requirements at Union level, as well as on the consistency, coherence, effectiveness, efficiency, and EU added value of those requirements. This consultation provides an opportunity for authorities to assess ETD reporting holistically alongside all existing and future regulatory reporting regimes, allows authorities to take into account the new reporting environment following the implementation of Regulation (EU) No 600/201422 and provides the ponssibility, including any legal liability, for to make proposals to effectively reduce burden on market participants who are required to reporting ETDs on behalf of both counterparties should fall on the CCP as well as for ensuring the accuracy of the details transactions. The Commission should take those findings into consideration in order to propose future changes to the reporting requirements under Article 9(1) in relation to ETD reported. ing. _________________ 22Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 201 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173 12.6.2014, p. 84).
Amendment 59 #
Proposal for a regulation
Recital 14
Recital 14
(14) To reduce the burden of reporting for small non-financial counterparties not subject to the clearing exemption, the financial counterparty should be responsible, and legally liable, for reporting on behalf of both itself and the non-financial counterparty that is not subject to the clearing obligation with regard to OTC derivative contracts entered into by that non-financial counterparty as well as for ensuring the accuracy of the details reported. However, it should be possible for non-financial counterparties to choose to report their derivative contracts themselves, in which case they should inform the financial counterparty accordingly. In such cases, the non- financial counterparty should remain responsible and legally liable for reporting that data and for ensuring its accuracy.
Amendment 67 #
Proposal for a regulation
Recital 22 a (new)
Recital 22 a (new)
(22a) In order to reduce the administrative burden and increase the matching of trades, ESMA should introduce a common Union standard for reporting to trade repositories. As CCPs and other financial counterparties are taking on delegated reporting duties, a single format would increase efficiencies for all participants.
Amendment 74 #
Proposal for a regulation
Recital 27 a (new)
Recital 27 a (new)
(27a) In order to address any issues that have arisen for financial counterparties or non-financial counterparties where the clearing obligation would no longer apply to them within the same year of initial assessment, ESMA should, by ... [date of entry into force + 12 months] submit a report to the Commission assessing whether the methodology used to calculate an aggregate month-end average position is problematic.
Amendment 84 #
Proposal for a regulation
Article 1 – paragraph 1 – point 1 a (new)
Article 1 – paragraph 1 – point 1 a (new)
Regulation (EU) No 648/2012
Article 2 – point 8 a (new)
Article 2 – point 8 a (new)
(1a) In Article 2, after point 8 the following point is inserted: ‘(8a) “foreign exchange swaps” means physically settled OTC derivative contracts (or combinations of contracts entered into at the same time and having the same effect) that solely involve an exchange of two different currencies on a specific date at a fixed rate that is agreed on the trade date of the contract or contracts covering the exchange, and a reverse exchange of the two currencies at a later date and at a fixed rate that is also agreed on the trade date of the contract or contracts covering the exchange;’.
Amendment 86 #
Proposal for a regulation
Article 1 – paragraph 1 – point 2 – point -a (new)
Article 1 – paragraph 1 – point 2 – point -a (new)
Regulation (EU) No 648/2012
Article 4 – paragraph 1 – introductory part
Article 4 – paragraph 1 – introductory part
Amendment 90 #
Proposal for a regulation
Article 1 – paragraph 1 – point 2 – point b a (new)
Article 1 – paragraph 1 – point 2 – point b a (new)
Regulation (EU) No 648/2012
Article 4 – paragraph 1 a (new)
Article 4 – paragraph 1 a (new)
(ba) the following paragraph 1a is inserted: ‘1a. ESMA shall develop draft regulatory technical standards to specify the types of OTC derivatives contracts for each type of post-trade risk reduction service that should be exempt from the clearing obligation, taking into account in particular the extent to which they mitigate risks, in particular counter party credit risk and operational risk. ESMA shall submit those draft regulatory technical standards to the Commission by ... [12 months following entry into force of this amending Regulation]. The Commission is empowered to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) 1095/2010.’
Amendment 99 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) No 648/2012
Article 4a – Title
Article 4a – Title
Financial counterparties subject to a exempt from a clearing obligation
Amendment 101 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) No 648/2012
Article 4a – paragraph 1 – subparagraph 1
Article 4a – paragraph 1 – subparagraph 1
A financial counterparty taking positions in OTC derivative contracts shallmay calculate, annually, its aggregate month-end average position for the months March, April and May in accordance with paragraph 3, in order to demonstrate that it does not exceed the clearing threshold specified pursuant to Article 10 (4)(b).
Amendment 106 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) No 648/2012
Article 4a – paragraph 1 – subparagraph 2 – introductory part
Article 4a – paragraph 1 – subparagraph 2 – introductory part
Where the result of that calculation exceedsmeans that the clearing thresholds specified pursuant to Article 10(4)(b) have not been reached, the financial counterparty shall:
Amendment 108 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) No 648/2012
Article 4a – paragraph 1 – subparagraph 2 – point a
Article 4a – paragraph 1 – subparagraph 2 – point a
(a) immediately notify ESMA and the relevant competent authority thereof;
Amendment 110 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) No 648/2012
Article 4a – paragraph 1 – subparagraph 2 – point b
Article 4a – paragraph 1 – subparagraph 2 – point b
(b) be subject toexempt from the clearing obligation referred to in Article 4 and from requirements set out in paragraph 3 of Article 11 for future OTC derivative contracts, irrespective of the asset class or asset classes for which the clearing threshold has not been exceeded;
Amendment 112 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) No 648/2012
Article 4a – paragraph 1 – subparagraph 2 – point c
Article 4a – paragraph 1 – subparagraph 2 – point c
Amendment 115 #
2. A financial counterparty that has become subjectbenefits from the exemption to the clearing obligation in accordance with paragraph 1 and, who subsequently demonstrates to the relevant competent authority that its aggregate month-end average position for the months March, April and May of a given year no longerw exceeds the clearing threshold referred to in paragraph 1, shall no longer be subject tonefit from the clearing obligation set out in Article 4exemption or from the exemption to the requirements set out in paragraph 3 of Article 11 for future contracts.
Amendment 117 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) No 648/2012
Article 4a – paragraph 2 a (new)
Article 4a – paragraph 2 a (new)
2a. Where a previously exempt financial counterparty is now subject to the clearing obligation in accordance with paragraph 1, it shall clear the contracts referred to in point (b) within four months of becoming subject to the clearing obligation.
Amendment 137 #
Proposal for a regulation
Article 1 – paragraph 1 – point 6
Article 1 – paragraph 1 – point 6
Regulation (EU) No 648/2012
Article 6b – paragraph 1 – subparagraph 3 a (new)
Article 6b – paragraph 1 – subparagraph 3 a (new)
Where the request for a suspension of the clearing obligation originates from a competent authority, ESMA shall, within 48 hours of the request based on reasons and evidence provided by the competent authority make a request to the Commission or reject the requested suspension. Where ESMA rejects the request made by the competent authority, it shall provide reasons in writing.
Amendment 142 #
Proposal for a regulation
Article 1 – paragraph 1 – point 6
Article 1 – paragraph 1 – point 6
Regulation (EU) No 648/2012
Article 6b – paragraph 3
Article 6b – paragraph 3
3. The Commission shall, within 48 hours of the request referred to in paragraph 1 and based on the reasons and evidence provided by ESMA, either suspend the clearing obligation for the specific class of OTC derivative or for the specific type of counterparty referred to in paragraph 1, or reject the requested suspension. An implementing act shall be adopted in accordance with the procedure referred to in Article 8 of Regulation (EU) No 182/2011. Where the Commission suspends the clearing obligation, the implementing act may, for counterparties who do not have arrangements in place for meeting the requirements for OTC derivative contracts not cleared by a CCP, specify temporary exemptions from the requirement in Article 11(3) for OTC derivative contracts not cleared by a CCP as set out in Article 11(3). When granting such exemptions, the implementing act must align the duration of the exemptions and cite the types of counterparty to be subject to these exemptions. The clearing obligation referred to in Article 4(1) shall not apply to those OTC derivative contracts that are the subject of the suspension period under Article 6a(3) and that are entered into or novated during the suspension period or any extension period. The clearing obligation shall not apply to these contracts during the suspension period or at or after the expiration of the suspension period.
Amendment 146 #
Proposal for a regulation
Article 1 – paragraph 1 – point 6
Article 1 – paragraph 1 – point 6
Regulation (EU) No 648/2012
Article 6b – paragraph 5
Article 6b – paragraph 5
5. A suspension of the clearing obligation pursuant to this Article and those referenced in paragraph 3 above, shall be valid for a period of three months from the date of the publication of that suspension in the Official Journal of the European Union.
Amendment 151 #
Proposal for a regulation
Article 1 – paragraph 1 – point 6
Article 1 – paragraph 1 – point 6
Regulation (EU) No 648/2012
Article 6b – paragraph 6 a (new)
Article 6b – paragraph 6 a (new)
6a. The implementing act suspending the clearing obligation for specific classes of OTC derivatives referred to in paragraph 3 shall also trigger a suspension of the trading obligation laid down in Article 28(1) and (2) of Regulation (EU) No 600/2014 for the same classes of OTC derivatives subject to this suspension of the clearing obligation. The suspension of that trading obligation shall be extended in line with any extension of the clearing obligation suspension under paragraph 6. When the clearing obligation suspension expires, this shall also trigger the expiry of the trading obligation suspension.
Amendment 153 #
Proposal for a regulation
Article 1 – paragraph 1 – point 6 a (new)
Article 1 – paragraph 1 – point 6 a (new)
Regulation (EU) No 648/2012
Article 6 c (new)
Article 6 c (new)
(6a) The following Article 6c is inserted: Article 6c Permanent removal of the clearing obligation and the trading obligation in situations other than resolution The Commission may, where it deems a permanent exemption is warranted to ensure global alignment, and after consulting the European Parliament, the Council and ESMA, take steps to enact a permanent exemption from the clearing obligation referred to in Article 4 (1). Where a decision has been taken to permanently suspend the clearing obligation, the corresponding trading obligation laid down in Article 28(1) and (2) of Regulation (EU) No 600/2014 for the same classes of OTC derivatives subject to this suspension of the clearing obligation, shall be assessed by the Commission.
Amendment 160 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7 – point a
Article 1 – paragraph 1 – point 7 – point a
Regulation (EU) No 648/2012
article 9 – paragraph 1 – subparagraph 3
article 9 – paragraph 1 – subparagraph 3
The reporting obligation shall not apply to intragroup transactions referred to in Article 3 where: (a) one of the counterparties is a non- financial counterparty.; or (b) one of the counterparties is established in a third country and would be a non- financial counterparty if it were established in the Union.
Amendment 166 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7 – point b
Article 1 – paragraph 1 – point 7 – point b
Regulation (EU) No 648/2012
Article 9 – paragraph 1a –subparagraph 1 – point a
Article 9 – paragraph 1a –subparagraph 1 – point a
Amendment 174 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7 – point b
Article 1 – paragraph 1 – point 7 – point b
Regulation (EU) No 648/2012
Article 9 – paragraph 1a – subparagraph 2 a (new)
Article 9 – paragraph 1a – subparagraph 2 a (new)
For the purpose of point (b), to ensure that the financial counterparty has all data needed to fulfil the reporting obligation set out in that point, the non- financial counterparty shall provide to the financial counterparty the details, which the financial counterparty cannot be reasonably expected to possess, relating to the OTC derivative contracts concluded between them.
Amendment 178 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8
Article 1 – paragraph 1 – point 8
Regulation (EU) No 648/2012
Article 10 – paragraph 1 – subparagraph 1
Article 10 – paragraph 1 – subparagraph 1
A non-financial counterparty taking positions in OTC derivative contracts shallmay calculate, annually, its aggregate month- end average position for the months March, April and May in accordance with paragraph 3.
Amendment 196 #
Proposal for a regulation
Article 1 – paragraph 1 – point 9 – point b
Article 1 – paragraph 1 – point 9 – point b
Regulation (EU) No 648/2012
Article 11 – paragraph 15 – subparagraph 2 – first sentence
Article 11 – paragraph 15 – subparagraph 2 – first sentence
The ESAs shall submit those common draft regulatory technical standards to the Commission by [PO please insert the date 912 months after the entry into force of this Regulation].;
Amendment 210 #
Proposal for a regulation
Article 1 – paragraph 1 – point 11
Article 1 – paragraph 1 – point 11
Regulation (EU) No 648/2012
Article 39 – paragraph 11
Article 39 – paragraph 11
11. Where the requirement referred to in paragraph 9 is satisfied, the assets and positions recorded in those accounts shall not be considered part of the insolvency estate of the CCP or thedefaulting clearing member.;
Amendment 214 #
Proposal for a regulation
Article 1 – paragraph 1 – point 12 – point b
Article 1 – paragraph 1 – point 12 – point b
Regulation (EU) No 648/2012
Article 56 – paragraph 3 – subparagraph 2
Article 56 – paragraph 3 – subparagraph 2
ESMA shall submit those draft regulatory technical standards to the Commission by [PO please insert the date 912 months after the entry into force of this Regulation].
Amendment 233 #
Proposal for a regulation
Article 1 – paragraph 1 – point 16
Article 1 – paragraph 1 – point 16
Regulation (EU) No 648/2012
Article 78 – paragraph 10 – subparagraph 2
Article 78 – paragraph 10 – subparagraph 2
ESMA shall submit those draft regulatory technical standards to the Commission by [PO please insert the date 912 months after the entry into force of this Regulation].
Amendment 237 #
Proposal for a regulation
Article 1 – paragraph 1 – point 17 – point c
Article 1 – paragraph 1 – point 17 – point c
Regulation (EU) No 648/2012
Article 81 – paragraph 5 – subparagraph 2
Article 81 – paragraph 5 – subparagraph 2
ESMA shall submit those draft regulatory technical standards to the Commission by [PO please insert the date 912 months after the entry into force of this Regulation].
Amendment 242 #
Proposal for a regulation
Article 1 – paragraph 1 – point 19 – point b
Article 1 – paragraph 1 – point 19 – point b
Regulation (EU) No 648/2012
Article 85 – paragraph 2 – subparagraph 1
Article 85 – paragraph 2 – subparagraph 1
By [PO please add date of entry into force of this amending Regulation + 24 years], the Commission shall prepare a report assessing whether viable technical solutions have been developed for the transfer by PSAs of cash and non-cash collateral as variation margins and the need for any measures to facilitate those technical solutions.
Amendment 252 #
Proposal for a regulation
Article 1 – paragraph 1 – point 19 – point b a (new)
Article 1 – paragraph 1 – point 19 – point b a (new)
Regulation (EU) No 648/2012
Article 85 – paragraph 2a (new)
Article 85 – paragraph 2a (new)
(ba) paragraph 2a is inserted: 2 a. ESMA shall by [date of entry into force of this amending Regulation+ 12 months] submit a report to the Commission which assesses whether the list of financial instruments that are considered highly liquid with minimal credit and market risk, in accordance with Article 47, could be extended and whether this list could include money market funds as defined in Regulation (EU) 2017/1131.
Amendment 254 #
Proposal for a regulation
Article 1 – paragraph 1 – point 19 – point c
Article 1 – paragraph 1 – point 19 – point c
Regulation (EU) No 648/2012
Article 83 – paragraph 3
Article 83 – paragraph 3
3. By [PO please add 6 months before the date referred to in paragraph 1] ESMA shall report to the Commission on the following: (a) whether viable technical solutions have been developed that facilitate the participation of PSAs in central clearing and the impact of those solutions on the level of central clearing by PSAs, taking into account the report referred to in paragraph 2; (b) the impact of this Regulation on the level of clearing by non-financial counterparties and the distribution of clearing within the non-financial counterparty class, especially with regard to the appropriateness of the clearing thresholds referred to in Article 10(4); (c) the impact of this Regulation on the level of clearing by financial counterparties other thAfter the five year period referred to in Article 89(1) the Commission shall: (a) submit a proposal for a binding solution if it considers that no solution has been found by stakeholders; (b) adopt a delegated act in accordance with Article 82 to extend the five-year period referred to in Article 89 (1) once, by two years, if it considers that a solution is within reach of the stakeholders and those subject to Article 4a(2) and the distribution of clearing within that financial counterparty class, especially with regard to the appropriateness of the clearing thresholds referred to in Article 10(4); (d) the improvement of the quality of transaction data reported to trade repositories, the accessibility of those data and the quality of the information received from trade repositories in accordance with Article 81; (e) the accessibility of clearing by counterpartieat additional time is needed for its finalization; (c) let the exemption lapse, while encouraging stakeholders to implement their solution beforehand if it considers that a solution has been found; (d) grant a permanent exemption for PSAs.;
Amendment 258 #
Proposal for a regulation
Article 1 – paragraph 1 – point 19 – point c a (new)
Article 1 – paragraph 1 – point 19 – point c a (new)
Regulation (EU) No 648/2012
Article 85 – paragraph 5 a (new)
Article 85 – paragraph 5 a (new)
(ca) paragraph 5a is inserted: 5a. By 12 months after entry into force of this amending Regulation, the Commission shall, after consulting ESMA, submit a report to the European Parliament and to the Council assessing whether the alignment of the changes made to the clearing obligation for derivatives, in particular the scope of entities subject to the clearing obligation as well as the suspension mechanism, with the provisions for the trading obligation for derivatives in Regulation No 600/2014 is functioning.
Amendment 262 #
Proposal for a regulation
Article 1 – paragraph 1 – point 19 – point c b (new)
Article 1 – paragraph 1 – point 19 – point c b (new)
Regulation (EU) No 648/2012
Article 85 – paragraph 5 b (new)
Article 85 – paragraph 5 b (new)
(cb) paragraph 5b is inserted: 5b. Based on the findings of the European Commission public consultation on fitness check on supervisory reporting published on 1 December 2017, the Commission shall, by [12 months following the entry into force of this Regulation], review and report on the application of Article 9(1a). The Commission shall submit that report to the European Parliament and the Council, together with any appropriate legislative proposal. When reviewing the application of Article 9(1a) the Commission shall assess whether the obligation to report transactions under Article 26 of Regulation (EU) No 600/2014 creates unnecessary duplication of transaction reporting for non-OTC derivatives and whether the requirement to report non-OTC transactions under Article 9(1a)could be reduced without undue loss of information with a view to simplifying the reporting chains for non- OTC derivatives for all counterparties, in particular for non-financial counterparties not subject to the clearing obligation referred to in the second subparagraph of Article 10(1). In addition, ESMA shall, by [12 months after entry into force], in cooperation with the ESRB, submit a report to the Commission, assessing the following: (a) the consistency between the reporting obligations for non OTC derivatives under Regulation (EU) No 600/2014and under Article 9 of this Regulation, both in terms of details of the derivatives contract reported and access to data by the relevant entities; (b) whether it is possible to align the reporting requirements for non OTC derivatives under Regulation (EU) No 600/2014 and under Article 9 of this Regulation both in terms of details of the derivatives contract reported and access to data by the relevant entities. (c) the feasibility to simplify the reporting chains for all counterparties including all indirect clients, taking into account the need for the timely reporting and the provisions adopted pursuant to Article 4(4) of this Regulation and Article 30(2) of Regulation 600/2014.
Amendment 263 #
Proposal for a regulation
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Regulation (EU) No 648/2012
Article 89 – paragraph 1 – subparagraph 1
Article 89 – paragraph 1 – subparagraph 1
1. Until [PO please add date of entry into force + 35 years], the clearing obligation set out in Article 4 shall not apply to OTC derivative contracts that are objectively measurable as reducing investment risks directly relating to the financial solvency of PSAs, and to entities established to provide compensation to members of PSAs in case of a default of a PSA.;
Amendment 267 #
Proposal for a regulation
Article 1 a (new)
Article 1 a (new)
Regulation (EU) No 600/2014
Article 28 – paragraph 1
Article 28 – paragraph 1
Article 1a Article 28(1) of Regulation (EU)No 600/2014 is replaced by the following: 1. Financial counterparties as defined in Article 2(8) of Regulation (EU) No 648/2012 that are subject to the clearing obligation pursuant to Article 4a of that Regulation and non-financial counterparties that meet the conditions referred to in Article 10(1)(b) thereof shall conclude transactions which are neither intragroup transactions as defined in Article 3 of that Regulation nor transactions covered by the transitional provisions in Article 89 of that Regulation with other such financial counterparties or other such non-financial counterparties that meet the conditions referred to in Article 10(1)(b) of Regulation (EU) No 648/2012 in derivatives pertaining to a class of derivatives that has been declared subject to the trading obligation in accordance with the procedure set out in Article 32 and listed in the register referred to in Article 34 only on: (a) regulated markets; (b) MTFs; (c) OTFs; or (d) third-country trading venues, provided that the Commission has adopted a decision in accordance with paragraph 4 and provided that the third country provides for an effective equivalent system for the recognition of trading venues authorised under Directive 2014/65/EU to admit to trading or trade derivatives declared subject to a trading obligation in that third country on a non-exclusive basis. Non-financial counterparties that meet the conditions referred to in Article 10(1)(b) of Regulation (EU) No 648/2012 shall only be subject to the obligation to trade on regulated markets, MTFs or OTFs in relation to the transactions in asset classes to which they are subject to a clearing obligation under that Regulation.