Index 
Texts adopted
Tuesday, 19 May 2015 - StrasbourgFinal edition
Safeguard measures provided for in the Agreement with the Swiss Confederation ***I
  Resolution
  Consolidated text
 European Convention on the legal protection of services based on, or consisting of, conditional access ***
 Request for waiver of the parliamentary immunity of Viktor Uspaskich
 Request for waiver of the parliamentary immunity of Jérôme Lavrilleux
 Request for waiver of the parliamentary immunity of Janusz Korwin-Mikke
 Request for waiver of the parliamentary immunity of Theodoros Zagorakis
 Indices used as benchmarks in financial instruments and financial contracts ***I
  Text
  Consolidated text
 Financing for development
 Safer healthcare in Europe
 Green growth opportunities for SMEs

Safeguard measures provided for in the Agreement with the Swiss Confederation ***I
PDF 244k   DOC 52k
Resolution
Consolidated text
European Parliament legislative resolution of 19 May 2015 on the proposal for a regulation of the European Parliament and of the Council on the safeguard measures provided for in the Agreement between the European Economic Community and the Swiss Confederation (codified text) (COM(2014)0305 – C8-0009/2014 – 2014/0158(COD) ) (Ordinary legislative procedure – codification)
P8_TA(2015)0189 A8-0145/2015

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2014)0305 ),

–   having regard to Article 294(2) and Article 207(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C8‑0009/2014 ),

–   having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–   having regard to the Interinstitutional Agreement of 20 December 1994 – Accelerated working method for official codification of legislative texts(1) ,

–   having regard to Rules 103 and 59 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs (A8-0145/2015 ),

A.   whereas, according to the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission, the proposal in question contains a straightforward codification of the existing texts without any change in their substance;

1.   Adopts its position at first reading hereinafter set out;

2.   Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Position of the European Parliament adopted at first reading on 19 May 2015 with a view to the adoption of Regulation (EU) 2015/... of the European Parliament and of the Council on the safeguard measures provided for in the Agreement between the European Economic Community and the Swiss Confederation (codification)

P8_TC1-COD(2014)0158


(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Regulation (EU) 2015/1145.)

(1) OJ C 102, 4.4.1996, p. 2.


European Convention on the legal protection of services based on, or consisting of, conditional access ***
PDF 241k   DOC 60k
European Parliament legislative resolution of 19 May 2015 on the draft Council decision on the conclusion, on behalf of the European Union, of the European Convention on the legal protection of services based on, or consisting of, conditional access (07597/1/2014 – C8-0286/2014 – 2010/0361(NLE)) (Consent)
P8_TA(2015)0190 A8-0071/2015

The European Parliament,

–   having regard to the draft Council decision (07597/1/2014),

–   having regard to Directive 98/84/EC of the European Parliament and of the Council of 20 November 1998 on the legal protection of services based on, or consisting of, conditional access(1) ,

–   having regard to the European Convention on the legal protection of services based on, or consisting of, conditional access of 24 January 2001(2) ,

–   having regard to Council Decision 2014/243/EU of 14 April 2014 on the signing, on behalf of the European Union, of the European Convention on the legal protection of services based on, or consisting of, conditional access(3) ,

–   having regard to the request for consent submitted by the Council in accordance with Article 207(4), first subparagraph, and Article 218(6), second subparagraph, point (a) (v), of the Treaty on the Functioning of the European Union (C8‑0286/2014 ),

–   having regard to the judgment of the Court of Justice of 22 October 2013(4) ,

–   having regard to Rule 99(1), first and third subparagraphs, Rule 99(2), and Rule 108(7) of its Rules of Procedure,

–   having regard to the recommendation of the Committee on Legal Affairs (A8-0071/2015 ),

1.   Gives its consent to conclusion of the Convention;

2.   Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States and the Council of Europe.

(1) OJ L 320, 28.11.1998, p. 54.
(2) OJ L 336, 20.12.2011, p. 2.
(3) OJ L 128, 30.4.2014, p. 61.
(4) Judgment of the Court of Justice of 22 October 2013, Commission v Council , C-137/12, ECLI:EU:C:2013:675.


Request for waiver of the parliamentary immunity of Viktor Uspaskich
PDF 159k   DOC 62k
European Parliament decision of 19 May 2015 on the request for waiver of the immunity of Viktor Uspaskich (2014/2203(IMM) )
P8_TA(2015)0191 A8-0149/2015

The European Parliament,

–   having regard to the request for waiver of the immunity of Viktor Uspaskich, forwarded on 1 October 2014 by the Prosecutor General of Lithuania and announced in plenary on 12 November 2014,

–   having heard Viktor Uspaskich in accordance with Rule 9(5) of its Rules of Procedure,

–   having regard to Articles 8 and 9 of Protocol No 7 on the Privileges and Immunities of the European Union, and Article 6(2) of the Act of 20 September 1976 concerning the election of the members of the European Parliament by direct universal suffrage,

–   having regard to the judgments of the Court of Justice of the European Union of 12 May 1964, 10 July 1986, 15 and 21 October 2008, 19 March 2010, 6 September 2011 and 17 January 2013(1) ,

–   having regard to Article 62 of the Constitution of the Republic of Lithuania,

–   having regard to Rule 5(2), Rule 6(1) and Rule 9 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs (A8-0149/2015 ),

A.   whereas the Prosecutor General of Lithuania has requested the waiver of the parliamentary immunity of Viktor Uspaskich, Member of the European Parliament, in connection with a pre-trial investigation concerning an alleged criminal offence;

B.   whereas Article 9 of Protocol No 7 on the Privileges and Immunities of the European Union states that Members of the European Parliament shall enjoy, in the territory of their own state, the immunities accorded to members of the parliament of that state;

C.   whereas Article 62 of the Constitution of the Republic of Lithuania and Article 22(3) of the Statute of the Seimas state that criminal proceedings may not be instituted against a Member of the Seimas, and that she or he may not be arrested or subjected to any other restrictions of personal freedom without the consent of the Seimas, except in cases of flagrante delicto;

D.   whereas Viktor Uspaskich is accused of having committed the offence of contempt of court under Article 232 of the Criminal Code of the Republic of Lithuania;

E.   whereas there is no evidence of fumus persecutionis , that is to say a well-founded suspicion that the legal proceedings have been instituted with the intention of causing political damage to the Member;

1.   Decides to waive the immunity of Viktor Uspaskich;

2.   Instructs its President to forward this decision and the report of its committee responsible immediately to the Prosecutor General of Lithuania and to Viktor Uspaskich.

(1) Judgment of the Court of Justice of 12 May 1964, Wagner v Fohrmann and Krier , 101/63, ECLI:EU:C:1964:28; judgment of the Court of Justice of 10 July 1986, Wybot v Faure and others , 149/85, ECLI:EU:C:1986:310; judgment of the General Court of 15 October 2008, Mote v Parliament , T-345/05, ECLI:EU:T:2008:440; judgment of the Court of Justice of 21 October 2008, Marra v De Gregorio and Clemente , C‑200/07 and C-201/07, ECLI:EU:C:2008:579; judgment of the General Court of 19 March 2010, Gollnisch v Parliament , T-42/06, ECLI:EU:T:2010:102; judgment of the Court of Justice of 6 September 2011, Patriciello , C‑163/10, ECLI: EU:C:2011:543; judgment of the General Court of 17 January 2013, Gollnisch v Parliament , T-346/11 and T-347/11, ECLI:EU:T:2013:23.


Request for waiver of the parliamentary immunity of Jérôme Lavrilleux
PDF 161k   DOC 63k
European Parliament decision of 19 May 2015 on the request for waiver of the immunity of Jérôme Lavrilleux (2015/2014(IMM) )
P8_TA(2015)0192 A8-0152/2015

The European Parliament,

–   having regard to the request for waiver of the immunity of Jérôme Lavrilleux, forwarded on 23 December 2014 by the French Minister of Justice at the request of the Chief Prosecutor at the Paris Court of Appeal, and announced in plenary on 15 January 2015,

–   having heard Jérôme Lavrilleux in accordance with Rule 9(5) of its Rules of Procedure,

–   having regard to Articles 8 and 9 of Protocol No 7 on the Privileges and Immunities of the European Union, and Article 6(2) of the Act of 20 September 1976 concerning the election of the members of the European Parliament by direct universal suffrage,

–   having regard to the judgments of the Court of Justice of the European Union of 12 May 1964, 10 July 1986, 15 and 21 October 2008, 19 March 2010, 6 September 2011 and 17 January 2013(1) ,

–   having regard to Article 26 of the Constitution of the French Republic,

–   having regard to Rule 5(2), Rule 6(1) and Rule 9 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs (A8-0152/2015 ),

A.   whereas the Chief Prosecutor at the Paris Court of Appeal has requested the waiver of immunity of Jérôme Lavrilleux, Member of the European Parliament, in connection with an ongoing judicial investigation into charges of forgery, use of forged documents, breach of trust, attempted fraud and complicity in and concealment of those offences, illegal financing of an election campaign and concealment of and complicity in that offence; and whereas the French judges would like, in this context, to take a custodial or semi-custodial measure against Jérôme Lavrilleux;

B.   whereas Article 9 of Protocol No 7 on the Privileges and Immunities of the European Union states that Members of the European Parliament shall enjoy, in the territory of their own state, the immunities accorded to members of the Parliament of that state;

C.   whereas Article 26, paragraphs 2 and 3, of the French Constitution provides that no Member of Parliament shall be arrested for a serious crime or other major offence, nor shall he be subjected to any other custodial or semi-custodial measure, without the authorisation of the Bureau of the House of which he is a member; that such authorisation shall not be required in the case of a serious crime or other major offence committed flagrante delicto or when a conviction has become final; and that the Assembly may request the suspension of detention, of custodial or semi-custodial measures or of proceedings against one of its Members;

D.   whereas Jérôme Lavrilleux is suspected of having taken part in a system of false invoicing for campaign expenditure;

E.   whereas the waiver of the immunity of Jérôme Lavrilleux should be subject to the conditions indicated in Rule 9(6) of the Rules of Procedure;

F.   whereas the alleged charges are not related to the position of Jérôme Lavrilleux as a Member of the European Parliament and arise from his former position as a deputy campaign director in the last presidential election in France;

G.   whereas the prosecution does not concern opinions expressed or votes cast by Jérôme Lavrilleux as a Member of the European Parliament in the performance of his duties within the meaning of Article 8 of Protocol No 7 on the Privileges and Immunities of the European Union;

H.   whereas Parliament has found no evidence of fumus persecutionis , that is to say, a sufficiently serious and precise presumption that the proceedings were initiated with the intention of causing political damage to the Member;

1.   Decides to waive the immunity of Jérôme Lavrilleux;

2.   Instructs its President to forward this decision and the report of its committee responsible immediately to the competent authority of the French Republic and to Jérôme Lavrilleux.

(1) Judgment of the Court of Justice of 12 May 1964, Wagner v Fohrmann and Krier , 101/63, ECLI:EU:C:1964:28; judgment of the Court of Justice of 10 July 1986, Wybot v Faure and others , 149/85, ECLI:EU:C:1986:310; judgment of the General Court of 15 October 2008, Mote v Parliament , T-345/05, ECLI:EU:T:2008:440; judgment of the Court of Justice of 21 October 2008, Marra v De Gregorio and Clemente , C‑200/07 and C-201/07, ECLI:EU:C:2008:579; judgment of the General Court of 19 March 2010, Gollnisch v Parliament , T-42/06, ECLI:EU:T:2010:102; judgment of the Court of Justice of 6 September 2011, Patriciello , C‑163/10, ECLI: EU:C:2011:543; judgment of the General Court of 17 January 2013, Gollnisch v Parliament , T-346/11 and T-347/11, ECLI:EU:T:2013:23.


Request for waiver of the parliamentary immunity of Janusz Korwin-Mikke
PDF 163k   DOC 63k
European Parliament decision of 19 May 2015 on the request for waiver of the immunity of Janusz Korwin-Mikke (2015/2049(IMM) )
P8_TA(2015)0193 A8-0150/2015

The European Parliament,

–   having regard to the request for waiver of the immunity of Janusz Korwin-Mikke, forwarded on 29 December 2014 by the Prosecutor-General of the Republic of Poland in connection with criminal proceedings brought by the District Prosecutor’s Office in Warsaw (Case No V Ds 223/14), and announced in plenary on 28 January 2015,

–   having heard Mr Korwin-Mikke in accordance with Rule 9(5) of its Rules of Procedure,

–   having regard to Articles 8 and 9 of Protocol No 7 on the Privileges and Immunities of the European Union, and Article 6(2) of the Act of 20 September 1976 concerning the election of the members of the European Parliament by direct universal suffrage,

–   having regard to the judgments of the Court of Justice of the European Union of 12 May 1964, 10 July 1986, 15 and 21 October 2008, 19 March 2010, 6 September 2011 and 17 January 2013(1) ,

–   having regard to Article 105(2) of the Constitution of the Republic of Poland and Articles 7b(1) and 7c(1) of the Polish Act of 9 May 1996 on the exercise of the mandate of Deputy and Senator,

–   having regard to Rule 5(2), Rule 6(1) and Rule 9 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs (A8-0150/2015 ),

A.   whereas the Prosecutor-General of the Republic of Poland has forwarded a request from the District Prosecutor’s Office in Warsaw for authorisation to bring criminal proceedings against a Member of the European Parliament, Janusz Korwin-Mikke, with regard to an offence under Article 222(1) of the Polish Criminal Code; whereas, in particular, the proceedings concern the alleged infringement of the physical integrity of a public official;

B.   whereas, according to Article 8 of the Protocol on the Privileges and Immunities of the European Union, Members of the European Parliament may not be subject to any form of inquiry, detention or legal proceedings in respect of opinions expressed or votes cast by them in the performance of their duties;

C.   whereas, according to Article 9 of the Protocol on the Privileges and Immunities of the European Union, Members of the European Parliament must enjoy, in the territory of their own State, the immunities accorded to members of their parliament;

D.   whereas, under Article 105(2) of the Constitution of the Republic of Poland, a Deputy shall not be subject to criminal accountability without the consent of the Sejm;

E.   whereas it is for Parliament alone to decide whether immunity is or is not to be waived in a given case; whereas Parliament may reasonably take account of the Member’s position in reaching its decision on whether or not to waive his or her immunity(2) ;

F.   whereas, as also confirmed at his hearing, the alleged offence does not have a direct or obvious connection with Mr Korwin-Mikke’s performance of his duties as a Member of the European Parliament, and nor does it constitute an opinion expressed or a vote cast in the performance of his duties as a Member of the European Parliament within the meaning of Article 8 of Protocol No 7 on the Privileges and Immunities of the European Union;

G.   whereas in this case Parliament has found no evidence of fumus persecutionis , that is to say, a sufficiently serious and precise suspicion that the case has been brought with the intention of causing political damage to the Member concerned;

1.   Decides to waive the immunity of Janusz Korwin-Mikke;

2.   Instructs its President to forward this decision and the report of its committee responsible immediately to the competent authority of the Republic of Poland and to Janusz Korwin-Mikke.

(1) Judgment of the Court of Justice of 12 May 1964, Wagner v Fohrmann and Krier , 101/63, ECLI:EU:C:1964:28; judgment of the Court of Justice of 10 July 1986, Wybot v Faure and others , 149/85, ECLI:EU:C:1986:310; judgment of the General Court of 15 October 2008, Mote v Parliament , T-345/05, ECLI:EU:T:2008:440; judgment of the Court of Justice of 21 October 2008, Marra v De Gregorio and Clemente , C‑200/07 and C-201/07, ECLI:EU:C:2008:579; judgment of the General Court of 19 March 2010, Gollnisch v Parliament , T-42/06, ECLI:EU:T:2010:102; judgment of the Court of Justice of 6 September 2011, Patriciello , C‑163/10, ECLI: EU:C:2011:543; judgment of the General Court of 17 January 2013, Gollnisch v Parliament , T-346/11 and T-347/11, ECLI:EU:T:2013:23.
(2) Case T-345/05 Mote v Parliament (cited above), paragraph 28.


Request for waiver of the parliamentary immunity of Theodoros Zagorakis
PDF 191k   DOC 63k
European Parliament decision of 19 May 2015 on the request for waiver of the immunity of Theodoros Zagorakis (II) (2015/2071(IMM) )
P8_TA(2015)0194 A8-0151/2015

The European Parliament,

–   having regard to the request for waiver of the immunity of Theodoros Zagorakis, forwarded on 10 March 2015 by the Deputy Public Prosecutor at the Supreme Court of Greece in connection with proceeding No ΑΒΜ Δ2011/5382, Β2012/564, pending before the first-instance court of Thessaloniki and announced in plenary on 25 March 2015,

–   having regard to the fact that Mr Zagorakis waived his right to a hearing in accordance with Rule 9(5) of its Rules of Procedure,

–   having regard to Articles 8 and 9 of Protocol No 7 on the Privileges and Immunities of the European Union, and to Article 6(2) of the Act of 20 September 1976 concerning the election of the members of the European Parliament by direct universal suffrage,

–   having regard to the judgments of the Court of Justice of the European Union of 12 May 1964, 10 July 1986, 15 and 21 October 2008, 19 March 2010, 6 September 2011 and 17 January 2013(1) ,

–   having regard to Article 62 of the Constitution of the Hellenic Republic,

–   having regard to Rule 5(2), Rule 6(1) and Rule 9 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs (A8-0151/2015 ),

A.   whereas the Deputy Public Prosecutor at the Supreme Court of Greece has requested the waiver of the immunity of Theodoros Zagorakis, Member of the European Parliament, in connection with possible legal action concerning an alleged offence;

B.   whereas Article 9 of Protocol No 7 on the Privileges and Immunities of the European Union states that Members of the European Parliament shall enjoy, in the territory of their own state, the immunities accorded to members of the parliament of that state;

C.   whereas Article 62 of the Constitution of the Hellenic Republic provides that, during the parliamentary term, members of parliament may not be prosecuted, arrested, imprisoned or otherwise confined without prior leave granted by parliament;

D.   whereas Mr Zagorakis is accused of being responsible for financial irregularities between 2007 and 2012 at the PAOK football club, of which he was president at the time;

E.   whereas the alleged offence clearly has no link with Mr Zagorakis’s post as a Member of the European Parliament, but rather is connected to his position as president of the PAOK football club;

F.   whereas the prosecution does not concern opinions expressed or votes cast in the performance of duties as a Member of the European Parliament for the purposes of Article 8 of Protocol No 7 on the Privileges and Immunities of the European Union;

G.   whereas there is no reason to suspect that the intention underlying the criminal proceedings is to damage the Member’s political activity (fumus persecutionis ), given that the prosecution was initiated a number of years before the Member took up his post;

1.   Decides to waive the immunity of Theodoros Zagorakis;

2.   Instructs its President to immediately forward this decision, and the report of the committee responsible, to the Public Prosecutor’s Office at the Supreme Court of Greece and to Theodoros Zagorakis.

(1) Judgment of the Court of Justice of 12 May 1964, Wagner v Fohrmann and Krier , 101/63, ECLI:EU:C:1964:28; judgment of the Court of Justice of 10 July 1986, Wybot v Faure and others , 149/85, ECLI:EU:C:1986:310; judgment of the General Court of 15 October 2008, Mote v Parliament , T-345/05, ECLI:EU:T:2008:440; judgment of the Court of Justice of 21 October 2008, Marra v De Gregorio and Clemente , C‑200/07 and C-201/07, ECLI:EU:C:2008:579; judgment of the General Court of 19 March 2010, Gollnisch v Parliament , T-42/06, ECLI:EU:T:2010:102; judgment of the Court of Justice of 6 September 2011, Patriciello , C‑163/10, ECLI: EU:C:2011:543; judgment of the General Court of 17 January 2013, Gollnisch v Parliament , T-346/11 and T-347/11, ECLI:EU:T:2013:23.


Indices used as benchmarks in financial instruments and financial contracts ***I
PDF 718k   DOC 325k
Text
Consolidated text
Amendments adopted by the European Parliament on 19 May 2015 on the proposal for a regulation of the European Parliament and of the Council on indices used as benchmarks in financial instruments and financial contracts (COM(2013)0641 – C7-0301/2013 – 2013/0314(COD) ) (1)
P8_TA(2015)0195 A8-0131/2015
(Ordinary legislative procedure: first reading) [Amendment No 1] AMENDMENTS BY THE EUROPEAN PARLIAMENT(2)
P8_TA(2015)0195 A8-0131/2015
to the Commission proposal
P8_TA(2015)0195 A8-0131/2015
---------------------------------------------------------
P8_TA(2015)0195 A8-0131/2015
Proposal for a
P8_TA(2015)0195 A8-0131/2015

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on indices used as benchmarks in financial instruments and financial contracts
(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee(3) ,

Having regard to the opinion of the European Central Bank(4) ,

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1)   The pricing of many financial instruments and financial contracts depends on the accuracy and integrity of benchmarks. Serious cases of manipulation of interest rate benchmarks such as LIBOR, EURIBOR, as well as foreign exchange benchmarks, causing considerable losses to consumers and investors and further shattering the confidence of citizens in the financial sector, as well as allegations that energy, oil and foreign exchange benchmarks have been manipulated, demonstrate that benchmarks can be subject to conflicts of interest and have discretionary and weak governance regimes that are vulnerable to manipulation. Failures in, or doubts about, the accuracy and integrity of indices used as benchmarks may undermine market confidence, cause losses to consumers and investors and distort the real economy. It is therefore necessary to ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process.

(2)   Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments(5) contains certain requirements with respect to the reliability of benchmarks used to price a listed financial instrument. Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading(6) contains certain requirements on benchmarks used by issuers. Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)(7) contains certain requirements on the use of benchmarks by UCITS investment funds. Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity(8) contains certain provisions which prohibit the manipulation of benchmarks that are used for wholesale energy products. However these legislative acts only cover certain aspects of certain benchmarks and do not address all the vulnerabilities in the process of producing all benchmarks.

(3)   Benchmarks are vital in pricing cross-border transactions and thereby facilitating the effective functioning of the internal market in a wide variety of financial instruments and services. Many benchmarks used as reference rates in financial contracts, in particular mortgages, are produced in one Member State but used by credit institutions and consumers in other Member States. In addition, these credit institutions often hedge their risks or obtain the funding for granting these financial contracts in the cross border interbank market. Only two Member States have adopted national legislation on benchmarks, but their respective legal frameworks on benchmarks already show divergences regarding aspects such as the scope of application. In addition, the International Organisation Securities Commissions (IOSCO) ▌ agreed principles on benchmarks in 2013 and, since those principles provide a certain flexibility as to their exact scope and means of ▌ implementation ▌, Member States are likely to adopt legislation at national level which would implement such principles divergently.

(3a)   The use of financial benchmarks is not limited to the issuance and creation of financial instruments and contracts. The financial industry also relies on benchmarks for the assessment of the performance of an investment fund for the purpose of return tracking, of determining the asset allocation of a portfolio, or of computing the performance fees. The setting and review of the weights to be assigned to various indices within a combination of indices for the purpose of determining the pay-out or the value of a financial instrument or a financial contract, or measuring the performance of an investment fund, also amounts to use, as such an activity does not involve any discretion as opposed to the activity of the provision of benchmarks. The holding of financial instruments referencing a particular benchmark should not to be considered to be use of the benchmark.

(4)   These divergent approaches would result in fragmentation of the internal market since administrators and users of benchmarks would be subject to different rules in different Member States. Thus, benchmarks produced in one Member State could be prevented from being used in other Member States. In the absence of a harmonised framework to ensure the accuracy and integrity of benchmarks used in financial instruments and financial contracts in the Union it is therefore likely that differences in Member States legislation will create obstacles to the smooth functioning of the internal market for the provision of benchmarks.

(5)   EU consumer protection rules do not cover the particular issue of the suitability of benchmarks in financial contracts. As a result of consumer complaints and litigation relating to the use of unsuitable benchmarks in several Member States, it is likely that divergent measures, inspired by legitimate concerns of consumer protection, would be adopted at national level, which could result in fragmentation of the internal market due to the divergent conditions of competition attached to different levels of consumer protection.

(6)   Therefore to ensure the proper functioning of the internal market and improve the conditions of its functioning, in particular with regard to financial markets, and to ensure a high level of consumer and investor protection, it is therefore appropriate to lay down a regulatory framework for benchmarks at Union level.

(7)   It is appropriate and necessary for those rules to take the legislative form of a Regulation in order to ensure that provisions directly imposing obligations on persons involved in benchmark production, contribution and use are applied in a uniform manner throughout the Union. Since a legal framework for the provision of benchmarks necessarily involves measures specifying precise requirements on all different aspects inherent to the provision of benchmarks, even small divergences on the approach taken regarding one of these aspects could lead to significant impediments in the cross border provision of benchmarks. Therefore, the use of a Regulation, which is directly applicable without requiring national legislation, should reduce the possibility of divergent measures being taken at national level, and should ensure a consistent approach, greater legal certainty and prevent the appearance of significant impediments in the cross-border provision of benchmarks.

(8)   The scope of this Regulation should be as broad as necessary to create a preventive regulatory framework. The production of benchmarks involves discretion in their determination and is inherently subject to certain types of conflicts of interest, which implies the existence of opportunities and incentives to manipulate those benchmarks. These risk factors are common to all benchmarks, and all of them should be made subject to adequate governance and control requirements. The degree of risk, however, varies, and the approach adopted in each case should therefore be tailored to the particular circumstances. Since the vulnerability and importance of a benchmark varies over time, restricting the scope by reference to currently important or vulnerable indices would not address the risks that any benchmark may pose in the future. In particular, benchmarks that are currently not widely used may be so used in the future, so that, in their regard, even a minor manipulation may have significant impact.

(9)   The critical determinant of the scope of this Regulation should be whether the output value of the benchmark determines the value of a financial instrument or financial contract▌. Therefore the scope should not be dependent on the nature of the input data. Benchmarks calculated from economic input data, such as share prices and non-economic number or values such as weather parameters should thus be included. The framework should cover those benchmarks subject to these risks, but should also acknowledge the existence of the large number of benchmarks provided around the world and the different impact that they have on financial stability and the real economy. This Regulation should also provide for a proportionate response to the risks that different benchmarks pose. This Regulation should therefore cover all benchmarks which are used to price financial instruments listed or traded on regulated venues. All references to days in this Regulation should mean calendar days.

(10)   A large number of consumers are parties to financial contracts, in particular consumer credit agreements secured by mortgages, that reference benchmarks that are subject to the same risks. This Regulation should therefore cover the indices or reference rates referred to in Directive 2014/17/EU of the European Parliament and of the Council(9) .

(11)   An index or combination of existing indices in which no new input data is included and which is used to measure the performance of a fund or a financial product should be considered to be use of a benchmark.

(12)   All benchmark administrators are potentially subject to conflicts of interest, exercise discretion and may have inadequate governance and control systems in place. Further, as administrators control the benchmark process, requiring authorisation and supervision or registration of administrators is the most effective way of ensuring the integrity of benchmarks.

(13)   Contributors are subject to potential conflicts of interest, exercise discretion and so may be the source of manipulation. Contributing to a benchmark is a voluntary activity. If any initiative requires contributors to significantly change their business models, they may cease to contribute. However, for entities already subject to regulation and supervision, requiring good governance and control systems is not expected to lead to substantial costs or disproportionate administrative burden. Therefore this Regulation imposes certain obligation on supervised contributors.

(14)   An administrator is the natural or legal person that has voluntary control over the provision of a benchmark, in particular who administers the benchmark, collects and analyses the input data, determines the benchmark and either directly publishes the benchmark or outsources its publication to a third party . However, where a person merely publishes or refers to a benchmark as part of his or her journalistic activities but does not have control over the provision of that benchmark, that person should not be subject to the requirements imposed on administrators by this Regulation.

(15)   An index is calculated using a formula or some other methodology on the basis of underlying values. Discretion exists in constructing this formula, performing the calculation or determining the input data. This discretion creates a risk of manipulation and therefore all benchmarks sharing this characteristic should be covered by this Regulation. However where a single price or value is used as a reference to a financial instrument, for example where the price of a single security is the reference price for an option, there is no calculation, input data or discretion. Therefore single price or single value reference prices should not be considered benchmarks for the purposes of this Regulation. Reference prices or settlement prices produced by Central Counterparties (CCPs) should not be considered benchmarks because they are used to determine settlement, margins and risk management and thus do not determine the amount payable under a financial instrument or the value of a financial instrument.

(16)   The independence of the European Central Bank and of the national central banks of the European System of Central Banks in the performance of their powers, tasks and duties conferred on them by the Treaties, as well as the independence of national central banks inherent in the constitutional structures of the Member State or third country concerned, should be fully respected in the implementation of this Regulation.

(17)   ▌In order to ensure the integrity of benchmarks, benchmark administrators should be required to implement adequate governance arrangements to control these conflicts of interest and to safeguard confidence in the integrity of benchmarks. Even where effectively managed, most administrators are subject to some conflicts of interest and may have to make judgements and decisions which affect a diverse group of stakeholders. It is therefore important that administrators have an independent function to oversee the implementation and effectiveness of the governance arrangements that provide effective oversight.

(18)   The manipulation or unreliability of benchmarks can cause damage to investors and consumers. Therefore, this Regulation should set out a framework for retention of records by administrators and contributors as well as providing transparency about a benchmark's purpose and input data which facilitates more efficient and fairer resolution of any potential claims in accordance with national or Union law.

(19)   Auditing and the effective enforcement of this Regulation requires ex post analysis and evidence. This Regulation should therefore set out a framework for adequate recordkeeping by benchmark administrators relating to the calculation of the benchmark for a sufficient period of time. The reality that a benchmark seeks to measure and the environment in which it is measured are likely to change over time. Therefore it is necessary that the process and methodology of the provision of benchmarks are audited or reviewed on a periodic basis to identify shortcomings and possible improvements. Many stakeholders may be impacted by failures in the provision of the benchmark and can help identify these shortcomings. This Regulation should therefore set out a framework for the establishment of an independent complaints procedure by administrators to enable stakeholders ▌ to notify the benchmark administrator of complaints and ensure that the benchmark administrator objectively evaluates the merits of any complaint.

(20)   The provision of benchmarks frequently involves the outsourcing of important functions such as calculating the benchmark, gathering the input data and disseminating the benchmark. In order to ensure the effectiveness of the governance arrangements, it is necessary to ensure that any such outsourcing does not relieve a benchmark administrator of any of its obligations and responsibilities, and is done in such a way that it does not interfere with either the administrators ability to meet these obligations or responsibilities, or the relevant competent authority’s ability to supervise them.

(21)   The benchmark administrator is the central recipient of the input data and is able to evaluate the integrity and accuracy of this input data on a consistent basis.▌

(22)   Employees of the administrator may identify possible breaches of this Regulation or potential vulnerabilities that could lead to manipulation or attempted manipulation. This Regulation should therefore put in place a framework to enable employees to alert administrators confidentially of possible breaches of this Regulation.

(23)   Any discretion that can be exercised in providing input data creates an opportunity to manipulate a benchmark. Where the input data is transaction based data, there is less discretion and therefore the opportunity to manipulate the data is reduced. As a general rule benchmark administrators should therefore use actual transaction input data where possible but other data may be used in those cases where the transaction data is insufficient to ensure the integrity and accuracy of the benchmark.

(24)   The accuracy and reliability of a benchmark in measuring the economic reality it is intended to track depends on the methodology and input data used. It is therefore necessary to adopt a transparent methodology that ensures the benchmark’s reliability and accuracy.

(25)   It may be necessary to change the methodology to ensure the continued accuracy of the benchmark, but any changes in the methodology have an impact on the users and stakeholders in the benchmark. It is therefore necessary to specify the procedures to be followed when changing the benchmark methodology, including the need for consultation, so that users and stakeholders can take the necessary actions in light of these changes or notify the administrator if they have concerns about these changes.

(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 such input data are clearly specified, can be relied on and are consistent with the benchmark administrator’s controls and methodology. ▌Therefore, where appropriate and possible, and in collaboration with its contributors, the benchmark administrator should produce a code of conduct to specify these requirements and the contributors' responsibilities concerning the provision of input data .

(27)   Many benchmarks are determined by the application of a formula calculated using input data that is provided by regulated venues, approved publication arrangements or reporting mechanisms , energy exchanges or emission allowance auctions. In those cases, existing regulation and supervision ensure the integrity and transparency of the input data and provide for governance requirements and procedures for the notification of infringements . Therefore, provided the underlying input data is in its entirety sourced from venues subject to post-trade transparency requirements, including a third country market considered to be equivalent to a regulated market in the Union, these benchmarks should not be subject to certain obligations in this Regulation, in order to avoid dual regulation and because their supervision ensures the integrity of the input data used.

(28)   Contributors may be subject to conflicts of interest and may exercise discretion in the determination of the input data. Therefore it is necessary that contributors, where possible and appropriate, be made subject to governance arrangements to ensure that these conflicts are managed and that the input data is accurate, conforms to the administrator’s requirements and can be validated.

(29)   Different types of benchmark and different benchmark sectors have different characteristics, vulnerabilities and risks. The provisions of this Regulation should be further specified for particular benchmark sectors and types. Commodity benchmarks are widely used and have sector-specific characteristics and so it is necessary to specify how these provisions would apply to these benchmarks in this Regulation. In addition, some degree of flexibility should be foreseen in this Regulation in order to allow for a timely update of the differentiated requirements applying to different benchmark sectors in light of ongoing international developments, with particular regard to the work of the International Organisation of Securities Commissions (IOSCO) .

(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.

(30)   The failure of certain critical benchmarks may have a significant impact on financial stability, market orderliness or investors and it is therefore necessary that additional requirements apply to ensure the integrity and robustness of those critical benchmarks. Those potentially destabilising effects of critical benchmarks can be felt in a single Member State or in more than one. The national competent authorities and ESMA will establish which benchmarks are to be classed as critical.

(30a)   Given the strategic importance of critical benchmarks for the good functioning of the internal market, ESMA shall have the power to adopt decisions that are directly applicable to the administrator and where applicable, to contributors to the benchmark, where the national competent authority has not applied this Regulation or has breached Union law and following the procedure laid down in Article 17 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (10) .

(31)   Contributors ceasing to contribute may undermine the credibility of critical benchmarks, as the capability of those benchmarks to measure the underlying market or economic reality would be impaired . It is therefore necessary to include a power for the relevant competent authority to require mandatory contributions from supervised entities to critical benchmarks in order to preserve the credibility of the benchmark in question. Mandatory contribution of input data is not intended to impose an obligation on supervised entities to enter into, or commit to entering into, transactions .

(31a)   Once a benchmark has been classed as critical, its administrator could exploit a monopoly position over the users of that benchmark. With that in mind, the college of competent authorities for that critical benchmark will need to oversee the sale price and the administrator’s costs in order to prevent market abuse.

(32)   In order for users of benchmarks to make appropriate choices of, and understand the risks of benchmarks, they need to know what the benchmark measures and their vulnerabilities. Therefore the benchmark administrator should publish a statement specifying these elements▌. The administrator should, upon request, make its input data available to the relevant competent authority in the context of an investigation.

(34)   This Regulation should take into account the Principles for financial benchmarks issued by the International Organization of Securities Commissions (IOSCO) (‘IOSCO Financial Benchmark Principles’) on 17 July 2013 as well as the Principles for Oil Price Reporting Agencies issued by IOSCO on 5 October 2012 ('IOSCO PRA Principles') which serve as a global standard for regulatory requirements for benchmarks .

(34a)   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 provisions of this Regulation are not appropriate to apply to commodity benchmarks. Principles developed for commodity benchmarks by IOSCO in collaboration with the International Energy Agency and the International Energy Forum, among others, are specifically designed to apply to all commodity benchmarks and therefore this Regulation provides that certain requirements will not apply to commodity benchmarks.

(34b)   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 requirements set out in this Regulation or with the provisions in the relevant IOSCO principles.

(34c)   This Regulation introduces an endorsement regime allowing administrators located in the Union and authorised or registered in accordance with its provisions to endorse benchmarks provided in third countries, under certain conditions. Such an endorsement regime should be introduced for third country administrators that are affiliated or work closely with administrators located in the Union. An administrator that has endorsed benchmarks provided in a third country should be responsible for such endorsed benchmarks and ensure that they fulfil the relevant conditions referred to in this Regulation or that they fully fulfil the requirements of the relevant IOSCO principles.

(35)   The administrator of a critical benchmark should be authorised and supervised by the competent authority of the Member State where that administrator is located. An administrator that only provides benchmarks determined by the application of a formula using input data contributed entirely and directly by regulated venues, approved publication arrangements or reporting mechanisms, energy exchanges or emission allowance auctions and/or an administrator that provides only non-critical benchmarks, should be registered with, and supervised by, the competent authority. The registration of an administrator is not intended to affect supervision by the relevant competent authorities. ESMA should maintain a register of administrators at Union level.

(36)   In some circumstances a person may provide an index but be unaware that this index is being used as a reference for a financial instrument. This is particularly the case where the users and benchmark administrator are located in different Member States. It is therefore necessary to increase the level of transparency with regard to which benchmark is being used. This can be achieved by improving the content of the prospectuses or key information documents required by the Union law and the content of the notifications and list of financial instruments required by Regulation (EU) No 596/2014 of the European Parliament and of the Council (11) .

(37)   A set of effective tools and powers and resources for the competent authorities of Member States and for ESMA guarantees supervisory effectiveness. This Regulation therefore should in particular provide for a minimum set of supervisory and investigative powers ▌which should be entrusted to competent authorities of Member States in accordance with national law and to ESMA . When exercising their powers under this Regulation competent authorities and ESMA should act objectively and impartially and remain autonomous in their decision making.

(38)   For the purpose of detecting infringements of this Regulation, it is necessary for competent authorities and ESMA to be able to access, in accordance with national law, the premises of natural and legal persons in order to seize documents. The access to such premises is necessary when there is reasonable suspicion that documents and other data related to the subject matter of an inspection or investigation exist and may be relevant to prove an infringement of this Regulation. Additionally the access to such premises is necessary where: the person to whom a demand for information has already been made fails to comply with it; or where there are reasonable grounds for believing that if a demand were to be made, it would not be complied with, or that the documents or information to which the information requirement relates, would be removed, tampered with or destroyed. If prior authorisation is needed from the judicial authority of the Member State concerned, in accordance with national law, such power for access into premises shall be used after having obtained that prior judicial authorisation.

(39)   Existing recordings of telephone conversations and data traffic records from supervised entities may constitute crucial, and sometimes the only evidence to detect and prove the existence of infringements of this Regulation, notably the compliance with governance and control requirements. Such records and recordings can help to verify the identity of the person responsible for the submission, those responsible for its approval and whether organisational separation of employees is maintained. Therefore, competent authorities should be able to require existing recordings of telephone conversations, electronic communications and data traffic records held by supervised entities, in those cases where a reasonable suspicion exists that such recordings or records related to the subject-matter of the inspection or investigation may be relevant to prove an infringement of this Regulation.

(40)   Some of the provisions of this Regulation apply to natural or legal persons in third countries who may use benchmarks or be contributors to benchmarks or may be otherwise involved in the benchmark process. Competent authorities should therefore enter into arrangements with supervisory authorities in third countries. ESMA should coordinate the development of such cooperation arrangements and the exchange between competent authorities of information received from third countries.

(41)   This Regulation respects the fundamental rights and observes the principles recognised in the Treaty on the Functioning of the European Union (TFEU) and in the Charter of Fundamental Rights of the European Union (‘the Charter’) , in particular the right to respect for private and family life , the protection of personal data, the right to freedom of expression and information, the freedom to conduct a business, the right to property, the right to consumer protection, the right to an effective remedy, the right of defence. Accordingly , this Regulation should be interpreted and applied in accordance with those rights and principles. In particular, where this Regulation refers to rules governing the freedom of expression in other media and the rules or codes governing journalist professions, consideration should be given to those freedoms as they are guaranteed in the Union and in the Member States and as recognised under Article 11 of the Charter and under other relevant provisions. This Regulation should not apply to the press, other media and journalists where they merely publish or refer to a benchmark as part of their journalistic activities with no control over the provision of that benchmark.

(42)   The rights of defence of the persons concerned should be fully respected. In particular, persons subject to proceedings shall be provided with access to the findings upon which the competent authorities has based the decision and shall be given the right to be heard.

(43)   Transparency regarding benchmarks is necessary for reasons of financial market stability and investor protection. Any exchange or transmission of information by competent authorities should take place in accordance with the rules on the transfer of personal data as laid down in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data(12) . Any exchange or transmission of information by ESMA should take place in accordance with the rules on the transfer of personal data as laid down in Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data(13) .

(44)   Taking into consideration the principles set out in the Commission’s communication on reinforcing sanctioning regimes in the financial services sector and legal acts of the Union adopted as a follow-up to that Communication, Member States should lay down rules on penalties and administrative measures applicable to infringements of the provisions of this Regulation and should ensure that they are implemented. Those penalties and administrative measures should be effective, proportionate and dissuasive.

(45)   Therefore, a set of administrative measures, sanctions and fines should be provided for to ensure a common approach in Member States and to enhance their deterrent effect. Sanctions applied in specific cases should be determined taking into account where appropriate factors such as the presence or absence of intent, the repayment of any identified financial benefit, the gravity and duration of the infringement , any aggravating or mitigating factors, the need for fines to have a deterrent effect and, where appropriate, include a reduction in return for cooperation with the competent authority.▌

(46)   In order to ensure that decisions made by competent authorities have a deterrent effect on the public at large, they should normally be published. The publication of decisions is also an important tool for competent authorities to inform market participants of what behaviour is considered constitute a violation of this Regulation and to promote wider good behaviour amongst market participants. If such publication risks causing disproportionate damage to the persons involved, jeopardises the stability of financial markets or an on-going investigation the competent authority should publish the sanctions and measures on an anonymous basis or delay the publication. Competent authorities should have the option not to publish sanctions where anonymous or delayed publication is considered insufficient to ensure that the stability of financial markets are not be jeopardised. Competent authorities are also not required to publish measures which are deemed to be of a minor nature where publication would be disproportionate.

(47)   Critical benchmarks may involve contributors, administrators and users in more than one Member State. Thus, the cessation of the provision of such a benchmark or any events that may significantly undermine its integrity may have an impact in more than one Member State meaning that the supervision of such a benchmark by the competent authority of the Member State in which it is located alone will not be efficient and effective in terms of addressing the risks that the critical benchmark poses. To ensure the effective exchange of supervisory information among competent authorities, coordination of their activities and supervisory measures, colleges of competent authorities, with ESMA in the lead, should be formed. The activities of the colleges should contribute to the harmonised application of rules under this Regulation and to the convergence of supervisory practices. ESMA's legally binding mediation is a key element of the achievement of coordination, supervisory consistency and convergence of supervisory practices. Benchmarks may reference financial instruments and financial contracts that have a long duration. In certain cases such benchmarks may no longer be permitted to be provided once this Regulation comes into effect because they have characteristics that cannot be adjusted to conform to the requirements of this Regulation. However, prohibiting the continued provision of such a benchmark may result in the termination or frustration of the financial instruments or financial contracts and so harm investors. It is therefore necessary to make provision to allow for the continued provision of such benchmarks for a transitional period.

(47a)   In 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 Council (14) (REMIT), the Agency for the Cooperation of Energy Regulators (ACER) should be fully consulted by ESMA in order to draw upon ACER's expertise in energy markets and to mitigate any dual regulation.

(47b)   Where an existing benchmark does not comply with the requirements of this Regulation but changing the benchmark to bring it into compliance with this Regulation would result in a force majeure event or breach the terms of a financial contract or financial instrument, the relevant competent authority may permit the continued use of the benchmark until such a time as it is possible for the benchmark to cease being used or to be substituted by another benchmark to avoid adverse effects on consumers caused by a disorderly and abrupt cessation of the benchmark.

(48)   In order to ensure uniform conditions for the implementation of this Regulation and further specify technical elements of the proposal, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission▌. When proposing those acts, the prevailing international standards for administration, contribution and the use of benchmarks should be taken into account, especially the results of the work of IOSCO. Proportionality, especially in the case of non-critical benchmarks and commodity benchmarks, must be respected.

(49)   The Commission should adopt draft regulatory technical standards developed by ESMA concerning governance and control requirements and establishing the minimum content of cooperation arrangements with the competent authorities of third countries, amongst others, by means of delegated acts pursuant to Article 290 TFEU and in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

(50)   In order to ensure uniform conditions for the implementation of this Regulation, in regard to certain of its aspects implementing powers should be granted to the Commission. Those aspects concern the ascertainment of the equivalence of the legal framework to which ▌ providers of benchmarks of third countries are subject, as well of the fact that a benchmark is critical in nature. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011(15) laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers.

(51)   The Commission should also be empowered to adopt implementing technical standards developed by ESMA establishing procedures and forms for exchange of information between competent authorities and ESMA, by means of implementing acts pursuant to Article 291 TFEU and in accordance with Article 15 of Regulation (EU) No 1095/2010. Since the objectives of this Regulation, namely to lay down a consistent and effective regime to address the vulnerabilities that benchmarks pose cannot be sufficiently achieved by the Member States, given that the overall impact of the problems relating to benchmarks can be fully perceived only in a Union context, and can therefore be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives,

HAVE ADOPTED THIS REGULATION:

TITLE 1

SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

Subject matter

This Regulation introduces a common framework to ensure the accuracy and integrity of 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.

Article 2

Scope

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

2.   This Regulation shall not apply to the provision of benchmarks by :

(a)   ▌central banks , where they are exercising powers or carrying out the tasks and duties conferred on them by the Treaties and by the Statute of the European System of Central Banks (ESCB) and of the ECB, or for which their independence is inherent in the constitutional structures of the Member State or third country concerned;

(aa)   public authorities, where they provide, or have control over the provision of, benchmarks for public policy purposes, including measures of employment, economic activity, and inflation;

(ab)   central counterparties;

(ac)   administrators where they provide single prices or single value reference prices;

(ad)   the press, other media and journalists where they merely publish or refer to a benchmark as part of their journalistic activities with no control over the provision of that benchmark;

(ae)   credit unions within the meaning of Directive 2013/36/EU of the European Parliament and the Council (16) .

2a.   Article 5(1), (2a), (3b), (3c), and (3d), Articles 5a and 5b, Article 5d(b) to (g), Article 7(1)(aa), (b), (ba), (bb), (bc) and (c), Article 7(2a), (3a) and (3b), Article 7a, Article 8(1) and (2), Article 9(1) and (2), Article 11 and Article 17(1) shall not apply to administrators in respect of their non-critical benchmarks.

Article 3

Definitions

1.   For the purposes of this Regulation, the following definitions ▌apply:

(1)   ‘index’ means any figure:

(a)   that is published or made available to the public;

(b)   that is regularly determined, entirely or partially, by the application of a formula or any other method of calculation, or by an assessment; and

(c)   where this determination is made on the basis of the value of one or more underlying assets, or prices, including estimated prices, actual or estimated interest rates, or other values or surveys ;

(1a)   ‘index provider means a natural or legal person that has control over the provision of an index;

(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▌;

(2a)   ‘family of benchmarks means a 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;

(3)   ‘provision of a benchmark’ means:

(a)   administering the arrangements for determining a benchmark; ▌

(b)   collecting, analysing or processing input data for the purpose of determining a benchmark; and

(c)   determining a benchmark through the application of a formula or other method of calculation or by an assessment of input data provided for that purpose;

(4)   ‘administrator' means a natural or legal person that has control over the provision of a benchmark;

(5)   ‘use of a benchmark’ means:

(a)   issuance of a financial instrument which references an index or a combination of indices;

(b)   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)   determination of the performance of an investment fund through an index or a combination of indices for the purpose of tracking the return of such index or combination of indices, of defining the asset allocation of a portfolio or of computing the performance fees;

(6)   ‘contribution of input data’ means providing any input data not publicly available to an administrator, or to another person for the purposes of passing to an administrator, that is required in connection with the determination of a benchmark, and is provided for that purpose;

(7)   ‘contributor’ means a natural or legal person contributing input data that is not regulated data ;

(8)   ‘supervised contributor’ means a supervised entity that contributes input data to an administrator located in the Union;

(9)   ‘submitter’ means a natural person employed by the contributor for the purpose of contributing input data;

(9a)   'assessor' means an employee of an administrator of a commodity benchmark, or any other natural person or third party, whose services are placed at the administrator's disposal or under its control and who is responsible for applying a methodology or judgement to input data and other information to reach a conclusive assessment about the price of a certain commodity;

(10)   ‘input data’ means the data in respect of the value of one or more underlying assets, or prices, including estimated prices, or other values, used by the administrator to determine the benchmark;

(11)   ‘regulated data’ means:

(i)   input data that is contributed entirely from:

(a)   a trading venue as defined in point (24 ) of Article 4(1) of Directive 2014/65/EU but only with reference to data concerning financial instruments;

(b)   an approved publication arrangement as defined in point (52 ) of Article 4(1) of Directive 2014/65/EU or a consolidated tape provider as defined in point (53 ) of Article 4(1) 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;

(c)   an approved reporting mechanism as defined in point (54) of Article 4(1) 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;

(d)   an electricity exchange as referred to in point (j) of paragraph 1 of Article 37 of Directive 2009/72/EC of the European Parliament and of the Council (17) ;

(e)   a natural gas exchange as referred to in point (j) of paragraph 1 of Article 41 of Directive 2009/73/EC of the European Parliament and of the Council (18) ;

(f)   an auction platform referred to in Article 26 or ▌ 30 of Commission Regulation (EU) No 1031/2010(19) ;

(g)   data provided under Article 8(1) of Regulation (EU) No 1227/2011 and elaborated in Commission Implementing Regulation (EU) No 1348/2014 (20) ; or

(h)   a third country trading venue, platform, exchange, publication arrangement or reporting mechanism equivalent to those specified in points (a) to (g) or any other entity such as a transactional data aggregator or a transactional data collector whose contribution of input data is already subject to appropriate supervision; and

(ii)   net asset values of the units of undertakings for collective investment in transferable securities (UCITS) as defined in Article 1(2) of Directive 2009/65/EC (21) .

(12)   ‘transaction data’ means observable prices, rates, indices or values representing transactions between unaffiliated counterparties in an active market subject to competitive supply and demand forces;

(13)   ‘financial instrument’ means any of the instruments listed in Section C of Annex I to Directive 2014/65/EU for which a request for admission to trading on a trading venue, as defined in point (24) of Article 4(1) of Directive 2014/65/EU, has been made or which are traded on a trading venue as defined in point (24) of Article 4(1) of Directive 2014/65/EU ;

(14)   ‘supervised entity’ means the following :

(a)   credit institutions as defined in point (1) of Article 3 of Directive 2013/36/EU;

(b)   investment firms as defined in point (1) of paragraph 1 of Article 4(1) of Directive 2014/65/EU ;

(c)   insurance undertakings as defined in point (1) of Article 13 Directive 2009/138/EC of the European Parliament and of the Council(22) ;

(d)   reinsurance undertakings as defined in point (4 ) of Article 13 Directive 2009/138/EC;

(e)   UCITS as defined in Article 1(2) of Directive 2009/65/EU(23) ;

(f)   alternative investment fund managers (AIFMs) as defined in point (b) of Article 4(1) of Directive 2011/61/EU of the European Parliament and of the Council(24) ;

(g)   central counterparties or CCPs , as defined in point (1) of Article 2 of Regulation (EU) No 648/2012 of the European Parliament and of the Council(25) ;

(h)   trade repositories as defined in point (2) of Article 2 of Regulation (EU) No 648/2012;

(i)   administrators ;

(15)   ‘financial contract’ means:

(a)   any credit agreement as defined in point (c) of Article 3 of Directive 2008/48/EC of the European Parliament and of the Council(26) ;

(b)   any credit agreement as defined in point 3 of Article 4 of Directive 2014/17/EU of the European Parliament and of the Council (27) ;

(16)   ‘investment fund’ means AIFs as defined in point (a) of paragraph 1 of Article 4 of Directive 2011/61/EU, or UCITS falling within the scope of Directive 2009/65/EU;

(17)   ‘management body‘ means the governing body, comprising the supervisory and the management function, which has ultimate decision-making authority and is empowered to set the entity’s strategy, objectives and overall direction;

(18)   ‘consumer’ means a natural person who, in financial contracts covered by this Regulation is acting for purposes which are outside his or her trade, business or profession;

(19)   'interbank interest rate benchmark' means a benchmark where the underlying asset for the purposes of point (1)(c) of this Article is the rate at which banks may lend to, or borrow from other banks;

(19a)   'foreign exchange rate benchmark' means a benchmark the value of which is determined in relation to the price, expressed in one currency, of one or a basket of currencies;

(20)   ‘commodity benchmark' means a benchmark where the underlying asset for the purposes of point (1)(c) of this Article is a commodity within the meaning of point (2) of Article 2 of Commission Regulation (EC) No 1287/2006(28) , excluding emission allowances as referred to in point (11) of Section C of Annex I of Directive 2014/65/EU ;

(20a)   ´basis risk´ means the risk related to the accuracy of the description by a benchmark of the underlying market or economic reality that the benchmark intends to measure;

(21)   ‘critical benchmark’ means:

(a)   a benchmark that is not based on regulated data, the reference value of which exceeds EUR 500 billion euro as defined in Article 13(1) ; or

(b)   a benchmark, the cessation of which would have a significant adverse impact on financial stability, on the orderly functioning of the markets and on the real economy in one or more Member States;

A critical benchmark is ‘national’ in nature where the adverse effects of it no longer being provided or it being provided using an unrepresentative set of contributors or data are restricted to one Member State. In such a case, the procedure laid down in Article 13(2a) to (2d) applies.

A critical benchmark is ‘European’ in nature where the adverse effects of it no longer being provided or it being provided using an unrepresentative set of contributors or data are not restricted to one Member State. In such a case, the procedure laid down in Article 13(2e), (2f) and (2g) applies.

(21a)   'non-critical benchmark' means a benchmark which does not meet the criteria for a critical benchmark provided for in Article 13;

(22)   ‘located’ means in relation to a legal person, the Member State or third country where that person’s registered office or other official address is situated and in relation to a natural person, the Member State or third country where that person is resident for tax purposes;

(22a)   ‘public authority’ means:

(a)   any government or public administration;

(b)   any entity or person either performing public administrative functions under national law or having public responsibilities or functions or providing public services, including measures of inflation, labour and economic activities, under the control of any government or public authority.

2.   The Commission shall be empowered to adopt delegated acts in accordance with Article 37 in order to specify further technical elements of the definitions laid down in paragraph 1, in particular specifying what constitutes making available to the public for the purposes of the definition of an index. In those delegated acts, the Commission shall ensure that published or 'made available' to the public is understood as made available to the wider public of users or potential users.

Where applicable, the Commission shall take into account market or technological developments and the international convergence of supervisory practice in relation to benchmarks.

2a.   The Commission shall adopt implementing acts in order to establish a list of public authorities in the Union as referred to in point (22a) of paragraph 1 of this Article and to review that list. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 38(2).

Article 4

Exclusion of index providers unaware of the use of benchmarks provided by them ▌

This Regulation shall not apply to an index provider in respect of an index provided by him or her where that index provider is unaware and could not reasonably have been aware that that index is used for the purposes referred to in point (2) of Article 3(1).

TITLE II

BENCHMARK INTEGRITY AND RELIABILITY

Chapter 1

Governance and Control of Administrators

Article 5

Governance and conflict of interest requirements

1.   The ▌administrator shall have robust governance arrangements which include a clear organisational structure with well-defined, transparent and consistent roles and responsibilities for all persons involved in the provision of a benchmark.

The administrator shall take all necessary steps to identify and to prevent or manage conflicts of interests between itself, including its managers, employees or any other natural person or third party whose services are placed at its disposal or under its control, and the contributors or users and to ensure that, where any discretion or judgement in the benchmark process is required, it is exercised independently and fairly.

2a.   The provision of a benchmark shall be operationally separated from any part of the administrator's business that may create an actual or potential conflict of interest. Where conflicts of interests 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 by an entity 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, as well as subscribers and contributors. If such conflicts cannot be adequately managed, the administrator shall either cease any activities or relationships that create those conflicts or shall cease producing the benchmark.

3a.   An administrator shall publish or disclose all existing or potential conflicts of interest to users of the benchmark and the relevant competent authority and, where relevant, to contributors, including conflicts of interest arising from the ownership or control of the administrator.

3b.   An administrator shall establish and operate adequate policies and procedures, as well as effective organisational arrangements, for the identification, disclosure, management, mitigation and avoidance of conflicts of interest in order to protect the integrity and independence of benchmark determinations. Such policies and procedures shall be regularly reviewed and updated. The policies and procedures shall take into account and address conflicts of interest, the degree of discretion exercised in the benchmark process and the risks that the benchmark poses, and shall:

(a)   ensure the confidentiality of information contributed to or produced by the administrator, subject to the disclosure and transparency obligations under this Regulation; and

(b)   specifically mitigate conflicts due to the administrator’s ownership or control, or due to other interests in its group or as a result of other persons that may exercise influence or control over the administrator in relation to setting the benchmark.

3c.   The administrator shall ensure that employees and any other natural persons whose services are placed at its disposal or under its control and who are directly involved in the provision of a benchmark:

(a)   have the necessary skills, knowledge and experience for the duties assigned to them and are subject to effective management and supervision;

(b)   are not subject to undue influence or conflicts of interest and that the compensation and performance evaluation of those persons do not create conflicts of interest or otherwise impinge on the integrity of the benchmark process;

(c)   do not have any interests or business connections that compromise the administrator’s functions;

(d)   are prohibited from contributing to a benchmark determination by way of engaging in bids, offers and trades on a personal basis or on behalf of market participants; and

(e)   are subject to effective procedures to control the exchange of information with other employees, and are not involved in activities that may create a risk of conflict of interest.

3d.   The administrator shall establish specific control procedures to ensure the integrity and reliability of the employee or person determining the benchmark, which 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.

3e.   Any non-material change to the benchmark in respect of provisions covered in this Article shall not be considered to be a breach of any financial contract or financial instrument which references that benchmark. For a critical benchmark, the relevant competent authority shall have the power to deem a change to be material.

Article 5a

Oversight function requirements

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.   An administrator shall develop and maintain robust procedures regarding its oversight function, which shall be made available to the relevant competent authorities.

The main features of the procedures shall include:

(a)   the terms of reference of the oversight function;

(b)   criteria to select members of the oversight function;

(c)   the summary details of membership of any board or committee charged with the oversight function, along with any declarations of conflicts of interest and processes for election, nomination or removal and replacement of committee member.

3.   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)   at least annually 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 remedial actions highlighted in the results of those audits;

(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.

4.   The oversight function shall be carried out by a separate committee or by another appropriate governance arrangement.

ESMA shall develop draft regulatory technical standards to determine the characteristics that the oversight function shall have in terms of composition as well as of positioning within the organisational structure of the administrator, so as to ensure the integrity of the function and the absence of conflicts of interest.

ESMA shall distinguish for different types of benchmarks and sectors as set out in this Regulation and shall take into consideration the differences in the ownership and control structure of administrators, the nature, scale and complexity of the provision of the benchmark, and the risk and impact of the benchmark, also in light of international convergence of supervisory practice in relation to governance requirements of benchmarks.

ESMA shall submit those draft regulatory technical 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 procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

5.   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 Titles I and IV.

6.   Any non-material change to the benchmark in respect of provisions covered in this Article shall not be considered to be a breach of any financial contract or financial instrument which references that benchmark. For a critical benchmark, the relevant competent authority shall have the power to deem a change to be material.

Article 5b

Control framework requirements

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 shall include:

(a)   the management of operational risk;

(b)   the contingency and recovery procedures that are in place in the event of a disruption to the benchmark provision.

3.   Where input data is not transaction data, the administrator shall:

(a)   establish measures to ensure, to the extent possible, that contributors 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 monitoring the 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 made available to the relevant competent authority, and upon request, to the users.

5.   Any non-material change to the benchmark in respect of provisions covered in this Article shall not be considered to be a breach of any financial contract or financial instrument which references that benchmark. For a critical benchmark, the relevant competent authority shall have the power to deem a change to be material.

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 down in Articles 5(1), (2a), (3b), (3c) and (3d), Articles 5a and 5b, Article 5d(b) to (g), Article 7(1)(aa), (b), (ba), (bb), (bc) and (c), Article 7(2a), (3a) and (3b), Article 7a, Article 8(1) and (2), Article 9(1) and 9(2), Article 11, and Article 17(1).

Where the administrator does not comply with the requirements laid down in Articles 5(1), (2a), (3b), (3c) and (3d), Articles 5a and 5b, Article 5d(b) to (g), Article 7(1)(aa), (b), (ba), (bb), (bc) and (c), Article 7(2a), (3a) and (3b), Article 7a, Article 8(1) and (2), Article 9(1) and (2), Article 11 and Article 17(1), 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 an independent external auditor to review, and report on, the accuracy of the administrator´s compliance statement. Such an audit shall take place at least every two years and whenever material changes to the benchmark occur.

5.   The administrator shall provide the audits under paragraph 4 to the relevant competent authority. The administrator shall provide or publish details of the audits under paragraph 4 to any user of the benchmark upon request. Upon the request of the relevant competent authority, or any user of the benchmark, the administrator shall provide or publish details of the reviews referred to in paragraph 4.

6.   The relevant competent authority may request additional information from the administrator in respect of their non-critical benchmarks in accordance with Article 30 and/or issue a recommendation to the administrator regarding the administrator´s compliance with the provisions covered by the compliance statement until the full satisfaction of the competent authority. The competent authority may publish the recommendation on its website.

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;

(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)   other changes in or deviations from standard procedures and methodologies, including those made during periods of market stress or disruption;

(e)   the identities of the submitters and of the natural persons employed by the administrators for determining the benchmarks;

(f)   all documents relating to any complaint; and

(g)   records of relevant communications between any person employed by the administrator and the contributors or submitters in respect of the benchmark.

2.   Where the benchmark is based on contributions from 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 such 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 conversation 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.

Article 5e

Complaint handling

The administrator shall have in place and publish written procedures for receiving, investigating and retaining records concerning complaints made about an administrator's calculation process. Such a complaint mechanism shall ensure that:

(a)   an administrator shall have in place a mechanism detailed in a written complaints handling policy, through which its subscribers may submit complaints on whether a specific benchmark calculation is representative of market value, proposed benchmark calculation changes, applications of methodology in relation to a specific benchmark calculation, and other editorial decisions in relation to the benchmark calculation processes;

(b)   there is a process and target timetable for the handling of complaints;

(c)   formal complaints made against an administrator and its personnel are investigated by that administrator in a timely and fair manner;

(d)   the inquiry is conducted independently of any personnel who may be involved in the subject matter of the complaint;

(e)   an administrator shall aim to complete its investigation promptly.

Article 5f

Regulatory technical standards on governance and control requirements

ESMA shall develop draft regulatory technical standards to specify further and calibrate the governance and control requirements under Articles 5(2a), 5(3a-3d), 5a(2), 5a(3), 5b(2), 5b(3), 5c(2), 5c(1) to (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 sectoral features and the types of input data used;

(c)   distinction between critical and non-critical benchmarks;

(d)   whether requirements are already partially or fully covered by other relevant regulatory requirements, particularly for benchmarks based on regulated data, and particularly but not limited to requirements under Directive 2014/65/EU or Regulation (EU) No 600/2014of the European Parliament and of the Council (29) , so as to ensure that no duplication of requirements or other unnecessary burdens for administrators result.

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.

Article 6

Outsourcing

1.   Administrators shall not outsource functions in the provision of a benchmark in such a way as to impair materially the administrator’s control over the provision of the benchmark or the ability of the relevant competent authority to supervise the benchmark.

3.   Where an administrator outsources functions or any relevant services and activities in the provision of a benchmark to any service provider, it shall remain fully responsible for discharging all of its obligations under this Regulation.

3a.   Where outsourcing takes place, the administrator shall ensure that the following conditions are satisfied:

(a)   the service provider shall have the ability, capacity, and any authorisation required by law, to perform the outsourced functions, services or activities reliably and professionally;

(b)   the administrator shall make available to the relevant competent authorities the identity and the tasks of the service provider who participates in the benchmark determination process;

(c)   the administrator shall take appropriate action if it appears that the service provider may not be carrying out the outsourced functions effectively and in compliance with applicable law and regulatory requirements;

(d)   the administrator shall retain the necessary expertise to supervise the outsourced functions effectively and to manage the risks associated with the outsourcing;

(e)   the service provider shall disclose to the administrator any development that may have a material impact on its ability to carry out the outsourced functions effectively and in compliance with applicable law and regulatory requirements;

(f)   the service provider shall cooperate with the relevant competent authority in connection with the outsourced activities, and the administrator and the relevant competent authority shall have effective access to data related to the outsourced activities, as well as to the business premises of the service provider, and the relevant competent authority shall be able to exercise those rights of access;

(g)   the administrator shall be able to terminate the arrangements where necessary.

(h)   the administrator shall take reasonable steps, including contingency plans, to avoid undue operational risk related to the participation of the service provider in the benchmark determination process.

Chapter 2

Input data, methodology and reporting of infringements

Article 7

Input data ▌

1.   The provision of a benchmark shall be governed by the following requirements in respect of its input data :

(a)   The input data shall be transaction data or, where more appropriate, non-transaction based data, including committed quotes and verifiable estimates, provided that it accurately and reliably represents the market or economic reality that the benchmark is intended to measure▐.

(aa)   The input data referred to in point (a) shall be verifiable.

(b)   The administrator shall obtain the input data from a reliable and representative panel or sample of contributors so as to ensure that the resulting benchmark is reliable and representative of the market or economic reality that the benchmark is intended to measure▐.

(ba)   The administrator shall only use input data from contributors which comply with the code of conduct referred to in Article 9.

(bb)   The administrator shall maintain a list of persons who may contribute input data to the administrator including procedures to evaluate the identity of a contributor and any submitters.

(bc)   The administrator shall ensure contributors provide all relevant input data; and

(c)   Where the input data of a benchmark is not transaction data and a contributor is a party to more than 50% of the value of transactions in the market ▐ that the benchmark intends to measure, the administrator shall verify where possible, that the input data represents a market subject to competitive supply and demand forces. Where the administrator finds that the input data does not represent a market subject to competitive supply and demand forces, it shall either change the input data, the contributors or the methodology to ensure that the input data represents a market subject to competitive supply and demand forces, or cease to provide that benchmark ▌.

2a.   The administrator shall ensure that the controls in respect of the input data include:

(a)   criteria that define who may contribute input data to the administrator and a process for selecting the contributors;

(b)   a process for evaluating the contributor's input data and preventing the contributor from providing further input data or applying other sanctions for non-compliance against the contributor, where appropriate; and

(c)   a process for validating the input data including against other indicators or data, to ensure its integrity and accuracy. Where a benchmark meets the criteria laid down in Article 14a, this requirement shall only apply where compliance is possible within reason.

3a.   Where the input data of a benchmark is contributed from a front office function, meaning any department, division, group, or personnel of contributors or any of its affiliates that performs any pricing, trading, sales, marketing, advertising, solicitation, structuring, or brokerage activities, the administrator shall:

(a)   obtain data from other sources that corroborates that input data;

(b)   ensure that contributors have adequate internal oversight and verification procedures that allow for:

(i)   validation of input data contributed, including procedures for multiple reviews by senior staff to check inputs and internal sign off procedures by management for submitting inputs;

(ii)   the physical separation of employees in the front office function and reporting lines;

(iii)   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 conflicts of interest between the contribution of input data activities and any other business of the contributor, its affiliates, or their respective clients or customers.

The provisions laid down in points (a) and (b) of the first subparagraph shall apply to benchmarks that meet the criteria laid down in Article 14a only where compliance with these provisions is possible within reason.

3b.   Any non-material change to the benchmark in respect of provisions covered in this Article shall not be considered to be a breach of any financial contract or financial instrument which references that benchmark. For a critical benchmark, the relevant competent authority shall have the power to deem a change to be material.

3c.   ESMA shall develop draft regulatory technical standards to specify further the internal oversight and verification procedures of a contributor that the administrator shall seek, in compliance with paragraph 2a and 3a, in order to ensure the integrity and accuracy of input data.

ESMA shall take into account the principle of proportionality with respect to non-critical and commodity benchmarks; the specificity of different types of benchmarks in particular those benchmarks based on contributions from entities that meet the criteria laid down in Article 14a; the nature of the input data , whether requirements are already partially or fully covered by other relevant regulatory requirements, particularly but not limited to requirements under Directive 2014/65/EU or Regulation (EU) No 600/2014, so as to ensure no duplication of requirements or other unnecessary burdens for administrators shall result, as well as the international convergence of supervisory practice in relation to benchmarks.

ESMA shall submit those draft regulatory technical 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 procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 7a

Methodology

1.   The administrator shall use a methodology for the determination of the benchmark that:

(a)   is robust and reliable;

(b)   has clear rules identifying how and when discretion may be exercised in the determination of that benchmark;

(c)   is rigorous, continuous and capable of validation, including back-testing;

(d)   is resilient and ensures that the benchmark can be calculated in the widest set of possible circumstances;

(e)   is traceable and verifiable.

2.   When developing the benchmark methodology the benchmark administrator shall:

(a)   take into account factors including the size and normal liquidity of the market, the transparency of trading and the positions of market participants, market concentration, market dynamics, and the adequacy of any sample to represent the market or the economic reality that the benchmark is intended to measure;

(b)   determine what constitutes an active market for the purposes of that benchmark; and

(c)   establish the priority given to different types of input data.

3.   The administrator shall have in place clear published arrangements that identify the circumstances in which the quantity or quality of input data falls below the standards necessary for the methodology to determine the benchmark accurately and reliably, and that describe whether and how the benchmark will be calculated in such circumstances.

4.   Any non-material change to the benchmark in respect of provisions covered in this Article shall not be considered to be a breach of any financial contract or financial instrument which references that benchmark. For a critical benchmark, the relevant competent authority shall have the power to deem a change to be material.

Article 7b

Transparency of methodology

1.   The administrator shall transparently develop, operate and administer the benchmark data and methodology.

The administrator shall publish, by means that ensure a fair and easy access:

(i)   the methodology used for each of the benchmark or family of benchmarks; and

(ii)   the procedure for consulting on, and the rationale for, any proposed material change in its methodology and the rationale for such a change, including a definition of what constitutes a material change and when it will notify users of any changes.

2.   Where a benchmark meets the criteria laid down in Article 14a, the administrator of that benchmark shall describe and publish with each calculation, to the extent reasonable and without prejudicing due publication of the benchmark:

(a)   a concise explanation, sufficient to facilitate a benchmark subscriber's or competent authority's ability to understand how the calculation was developed including, at a minimum, the size and liquidity of the physical market being assessed (such as the number and volume of transactions submitted), the range and average volume and range and average price, and indicative percentages of each type of input data that have been considered in a calculation; terms referring to the pricing methodology shall be included such as "transaction-based", "spread-based" or "interpolated or extrapolated"; and

(b)   a concise explanation of the extent to which, and the basis upon which, any judgement was exercised including any decision to exclude input data which otherwise conformed to the requirements of the relevant methodology for that calculation; base prices on spreads or interpolation, extrapolation, or weighting bids or offers higher than concluded transactions in any calculation.

3.   Where such a publication would not be compatible with applicable intellectual property law, the methodology shall be made available to the relevant competent authority.

4.   Where a material change is made to the methodology of a critical benchmark, the administrator shall notify the relevant competent authority of the change. The competent authority shall have 30 days to approve the change.

Article 7c

Regulatory technical standards on input data and methodology

ESMA shall develop regulatory technical standards to 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 the relevant competent authorities 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;

(c)   the principle of proportionality with respect to non-critical benchmarks;

(d)   the vulnerability of benchmarks to manipulation in light of the methodologies and input data used;

(e)   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;

(f)   whether requirements are already partially or fully covered by other relevant regulatory requirements, particularly for benchmarks based on regulated data, and particularly but not limited to requirements under Directive 2014/65/EU or Regulation (EU) No 600/2014, so as to ensure no duplication of requirements or other unnecessary burdens for administrators shall result.

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.

Article 8

Reporting of infringements

1.   The administrator shall have procedures in place for its managers, employees, and any other natural persons whose services are placed at its disposal or under its control, to report internally infringements of this Regulation and other relevant applicable law .

2.   The administrator shall have procedures in place to report infringements of this Regulation and other relevant applicable law to the appropriate authorities.

Chapter 3

Code of conduct and requirements for contributors

Article 9

Code of conduct

1.   Where a benchmark is based on input data from contributors, the administrator shall draw up, where possible in collaboration with the contributors, a code of conduct for each benchmark clearly specifying the ▌ contributors’ responsibilities ▌with respect to the contribution of input data and shall ensure submitters confirm their compliance with the code of conduct and reconfirm compliance in the event of any changes to it .

2.   The code of conduct shall 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 is provided in accordance with Articles 7 and 8;

(b)   policies to ensure contributors provide all relevant input data; and

(c)   the systems and controls that the contributor is required to establish, including:

(i)   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;

(ii)   policies on the use of discretion in providing input data;

(iii)   any requirement for the validation of input data before it is provided to the administrator;

(iv)   record keeping policies;

(v)   suspicious input data reporting requirements;

(vi)   conflict management requirements.

2a.   The administrator may develop a single code of conduct for each family of benchmarks it provides.

2b.   Within 20 days from the date of application of the decision to include a critical benchmark in the list referred to in Article 13(1), 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 this Regulation.

3.   ESMA shall develop draft regulatory technical standards to specify further the elements of the code of conduct referred to in paragraph 2 for different types of benchmarks, and in order to take account of developments in benchmarks and financial markets.

ESMA, while developing those draft regulatory technical standards, shall take into account the principle of proportionality with respect to different characteristics of benchmarks and of contributors, notably in terms of differences in input data and methodologies, the risks of input data being manipulated, and the international convergence of supervisory practices in relation to benchmarks. ESMA shall consult with ACER, with regard to applicability of codes of conduct in particular with regard to relevant benchmarks.

ESMA shall submit those draft regulatory technical standards to the Commission by [XXX].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first paragraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 11

Requirements for supervised contributors

1.   The ▌governance and control requirements set out in paragraphs 2a and 3 shall apply to a supervised contributor contributing input data to a critical benchmark.

2.   A supervised contributor shall have effective systems and controls in place to ensure the integrity and reliability of all contributions of input data to the administrator, including:

(a)   controls regarding who may submit input data to an administrator including, where proportionate, a process for sign-off by a natural person senior to the submitter;

(b)   appropriate training for submitters, covering at least this Regulation and Regulation (EU) No 596/2014;

(c)   conflict management measures, including organisational separation of employees where appropriate and a consideration of how to remove incentives to manipulate any benchmark created by remuneration polices;

(d)   record keeping of communications in relation to provision of input data for an appropriate period of time;

(e)   record keeping of exposures of individual traders and trader desks to instruments referencing a benchmark in order to facilitate audits, investigations and for purposes of managing conflicts of interest;

(f)   record keeping of internal and external audits.

2a.   Where input data is not transaction data or committed quotes, supervised contributors shall, in addition to the systems and controls referred to in paragraph 2, establish policies guiding any use of judgement or exercise of discretion and retain records of the rationale for any such judgement or discretion, where proportionate, taking into account the nature of the benchmark and input data.

3.   A supervised contributor shall fully cooperate with the administrator and the relevant competent authority in the auditing and supervision of the provision of a benchmark, including for the purposes set out in Article 5c(3), and make available the information and records kept in accordance with paragraphs 2 and 2a .

4.   ESMA shall develop draft regulatory technical standards to specify further the requirements concerning systems and controls set out in paragraphs 2, 2a and 3 for different types of benchmarks.

ESMA shall submit those draft regulatory technical 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 procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

TITLE III

▌REQUIREMENTS FOR CRITICAL BENCHMARKS

Chapter 1

Regulated data

Article 12a

Regulated data

Where benchmarks are determined by the application of a formula to data set out in point 11(i) or point 11(ii) of Article 3(1), Articles 7(1)(b), 7(1)(ba), 7(1)(c), 7(2a), 7(3a), 8(1), 8(2), 9, 11 and 13a 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 as specified in point 11 of Article 3(1). These requirements shall also not apply for purposes of Article 5c(3).

Chapter 2

Critical benchmarks

Article 13

Critical benchmarks

1.   A benchmark that is not based on regulated data 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 500 000 000 000, as measured over an appropriate period of time;

(b)   the benchmark is recognised as critical in accordance with the procedure laid down in paragraphs 2a, 2c and 2e-2g.

ESMA shall develop draft regulatory technical standards to:

–   specify how the market value of financial instruments is calculated;

–   specify how the gross notional value of derivatives is calculated;

–   specify the length of time to be used to measure appropriately the value of the benchmark;

–   review the EUR 500 000 000 000 threshold, at least every [three] years after the date of the entry into force of this Regulation.

ESMA shall submit those draft regulatory technical 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 procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

2a.   A competent authority of a Member State may deem a benchmark administered within its jurisdiction to be critical where it has an average notional value totalling less than the amount set in point (a) of the first subparagraph of paragraph 1 if it considers that the cessation of that benchmark would have a significant adverse impact on the integrity of markets, financial stability, consumers, the real economy, or the financing of households and corporations within its jurisdiction. In such a case, it shall notify ESMA of its decision within five days.

2b.   Within 10 days following receipt of the notification provided for in paragraph 2a of this Article, ESMA shall publish the notification on its website and update the register referred to Article 25a.

2c.   Where a national competent authority considers that a decision taken pursuant to paragraph 2a by another competent authority in the Union will have a significant adverse impact on financial market stability, the real economy, or supervised contributors to the relevant benchmark in its jurisdiction, it shall issue a request to that national competent authority to reconsider its decision. The competent authority that took the decision pursuant to paragraph 2a shall inform the requesting competent authority of its response within 30 days of the receipt of the request.

2d.   In the absence of an agreement between the competent authorities, the requesting competent authority may refer the matter to ESMA. Within 60 days of receiving such a referral request, ESMA shall act in accordance with Article 19 of Regulation (EU) No 1095/2010.

2e.   Where a competent authority of a Member State or ESMA considers that a benchmark administered in another Member State with an average notional value totalling less than the amount set in point (a) of the first subparagraph of paragraph 1 should nevertheless be deemed to be critical, as the cessation of that benchmark would have a significant adverse impact on the integrity of markets, financial stability, consumers, the real economy, or the financing of households and corporations within its jurisdiction, it shall issue a request to the national competent authority of the relevant benchmark administrator to categorise the benchmark as critical. The competent authority of the relevant benchmark administrator shall inform the requesting competent authority of its response within 30 days of the receipt of the request.

2f.   Following the procedure laid down in paragraph 2e, and in the absence of an agreement between the competent authorities, the requesting competent authority may refer the matter to ESMA. It shall transmit a documented assessment of the impact of the cessation of the benchmark in its jurisdiction, which shall include at least the following:

(a)   the variety of use in terms of market participants, as well as use in retail markets;

(b)   the availability of a feasible market-led substitute for the benchmark;

(c)   the value of financial instruments and financial contracts that reference the benchmark within the Member State and its relevance in terms of the gross national product of the Member State;

(d)   the concentration in use and, where applicable, of contribution to the benchmark among Member States;

(e)   any other indicator to assess the potential impact of the discontinuity or unreliability of the benchmark on the integrity of markets, financial stability, or the financing of households and corporations of the Member State.

Where ESMA is the requesting competent authority, it shall review its request and issue a binding opinion.

2g.   Within [10] weeks of receiving the notification referred to in paragraph 2d, and after consulting the ESRB and other relevant national competent authorities, ESMA shall issue a binding opinion on the criticality of the benchmark. ESMA shall transmit its opinion to the Commission, the national competent authorities and the administrator, together with the results of the consultations. ESMA shall base its opinion on the criteria listed in paragraph 2f and other relevant criteria.

2h.   Once a benchmark has been defined as critical, the college of competent authorities shall be formed pursuant to Article 34.

The college of competent authorities shall request the information needed in order to grant the authorisation enabling this benchmark to be provided under the additional conditions imposed by this Regulation on account of the benchmark being critical, as provided for in Article 23.

2i.   The college of competent authorities shall review at least once every two years benchmarks previously classed as critical.

2j.   Member States may, in exceptional circumstances, impose additional requirements on any benchmark administrator in respect of the matters covered by this Article.

Article 13a

Mandatory administration of a critical benchmark

1.   If an administrator of a critical benchmark intends to cease producing its critical benchmark, it shall:

(a)   immediately notify its competent authority; and

(b)   within four weeks of such notification submit an assessment of how the benchmark is to be transitioned to a new administrator; or

(c)   within four weeks of such notification submit an assessment of how the benchmark is to be ceased to be produced, taking into account the procedure established in Article 17(1).

During that period, the administrator shall not cease production of the benchmark.

2.   Upon receipt of the assessment of the administrator referred to in paragraph 1, the competent authority shall within four weeks:

(a)   inform ESMA; and

(b)   make its own assessment of how the benchmark shall be transitioned to a new administrator or be ceased to be produced, taking into account the administrator's procedure for cessation of its benchmark established in accordance with Article 17(1).

During that period of time, the administrator shall not cease production of the benchmark.

3.   Following completion of the assessment under paragraph 2, the competent authority shall have the power to compel the administrator to continue publishing the benchmark until such time:

(a)   as the provision of the benchmark has been transferred to a new administrator; or

(b)   as the benchmark can be ceased in an orderly fashion; or

(c)   as the benchmark is no longer critical.

The competent authority may compel the administrator to continue to publish the benchmark for a limited period of time not exceeding six months, which the competent authority may extend where necessary by up to a further six months.

Article 13b

Mitigation of market power of critical benchmark administrators

1.   The administrator, in controlling the provision of the critical benchmark, shall have due regard to the principles of market integrity and benchmark continuity including the need for legal certainty for contracts which reference the benchmark.

2.   When providing the critical benchmark for use in a financial contract or a financial instrument, the administrator shall ensure that licences of, and information relating to, the benchmark are provided to all users on a fair, reasonable and non-discriminatory basis, as outlined in Article 37 of Regulation (EU) No 600/2014.

Article 14

Mandatory contribution to a critical benchmark

1.   The administrator of one or more critical benchmarks based on submissions by contributors the majority of which are supervised entities shall, every two years, submit to its competent authority an assessment of the capability of each critical benchmark it provides to measure the underlying market or economic reality.

2.   If one or more supervised contributors to a critical benchmark intend to cease contributing input data to that critical benchmark, they shall promptly notify in writing the administrator of the critical benchmark and the relevant competent authority. Within 14 days of receipt of such notification, the administrator shall inform the competent authority and provide an assessment of the implications of the cessation on the capability of the benchmark to measure the underlying market or economic reality. 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.

The competent authority shall promptly inform the college of competent authorities and shall complete its own assessment of the implications of the cessation within a reasonable period of time. The competent authority shall have the power to require the contributors which made the notification intending to cease contributing input data to a critical benchmark to continue to contribute such input data until the competent authority has completed its assessment.

3.   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 4, including entities that are not already contributors to the relevant critical benchmark, to contribute input data to the administrator in accordance with the methodology, code of conduct or other rules. Such a requirement shall be in place for an appropriate transition period dependent upon the average length of contract referencing the relevant benchmark, but not exceeding 12 months from the date when the initial decision to mandate contribution was taken;

(b)   following a review as laid down in paragraph 5b of the transitional period referred to in point (a) of this paragraph, extend the period of mandatory contribution by a period of time not exceeding 12 months;

(c)   determine the time by which input data shall be contributed, without obliging supervised entities to trade or commit to trade;

(d)   require the administrator to make changes to the code of conduct, methodology or other rules of the critical benchmark to increase the benchmark’s representativeness and robustness, after discussion with the administrator;

(e)   request administrator to provide and make available to users of the benchmark a written report on measures that the administrator intends to adopt, to increase the representativeness and robustness of the benchmark.

4.   The supervised entities referred to in point (a) of paragraph 3 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 the contributor’s expertise and ability to provide input data of the necessary quality. Due consideration shall be given to the existence of appropriate alternative benchmarks to which the financial contracts and financial instruments referencing the critical benchmark could transition.

5.   Where a benchmark is deemed to be critical in accordance with the procedure laid down in paragraphs 2a to 2d of Article 13, the competent authority of the administrator shall have the power to require the contribution of input data in accordance with points (a), (b) and (c) of paragraph 3 of this Article only from supervised contributors located in its Member State .

5a.   The competent authority of a supervised entity referred to in paragraph 3 shall assist the competent authority of the administrator in enforcing measures pursuant to paragraph 3.

5b.   By the end of the transitional period referred to in point (a) of paragraph 3, the competent authority of the administrator in cooperation with the college of competent authorities shall review the continued necessity of the measures laid down in point (a) of paragraph 3 and submit its conclusions in a written report. The competent authority of the administrator shall revoke the measures if it judges:

(a)   that the benchmark can continue once the contributors mandated to contribute input data have ceased contributing;

(b)   that the contributors are likely to continue contributing input data for at least one year if the power were revoked;

(c)   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 acceptable costs. Such a switch shall not be deemed to constitute a breach of an existing contract; or

(d)   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) of the first subparagraph, the supervised entities intending to cease contributing shall do so on the same date to be determined by the competent authority of the administrator, not exceeding the periods laid down in point (b) of paragraph 3.

5c.   In the event that a critical benchmark is to be wound down, each supervised contributor to the critical benchmark shall continue to contribute input data for an additional appropriate period of time determined by the competent authority, but not exceeding the periods laid down in point (b) of paragraph 3. Any changes or switches to another benchmark shall not be deemed to constitute a breach of an existing contract.

5d.   The administrator shall, as soon as is practically possible, notify the relevant competent authority in the event that a contributor infringes the requirements of paragraph 2.

Article 14a

Commodity benchmarks based on contributions from non-supervised entities

Where a commodity benchmark is based on submissions from contributors the majority of which are not supervised entities whose main business is the provision of investment services within the meaning of Directive 2014/65/EU or banking activities under Directive 2013/36/EU, Articles 5a, 5b, 5c(1), 5c(2), 5d(2), 7(1)(ba), 7(1)(bc) and 9 shall not apply.

TITLE IV

TRANSPARENCY AND CONSUMER PROTECTION

Article 15

Benchmark statement

1.   Within two weeks of inclusion in the register referred to in Article 25a, an administrator shall publish a benchmark statement for each benchmark or, where applicable, for each family of benchmarks produced and published in order to obtain authorisation or registration, or in order to be endorsed under Article 21b, or recognised under Article 21a. The administrator shall update the benchmark statement for each benchmark or a family of benchmarks at least every two years. The statement shall :

(a)   clearly and unambiguously defines the market or economic reality measured by the benchmark and the circumstances in which such measurement may become unreliable;

(c)   ▌clearly and unambiguously identify the elements of the benchmark to which discretion may be exercised and the criteria applicable to the exercise of such discretion▌;

(d)   provide notice of the possibility that factors, including external factors beyond the control of the administrator, may necessitate changes to, or the cessation, of the benchmark; and

(e)   advise that any financial contracts or other financial instruments that reference the benchmark should be able to withstand, or otherwise address the possibility of changes to, or cessation of, the benchmark.

2.   The benchmark statement shall contain at least:

(a)   the definitions for all key terms relating to the benchmark;

(b)   the rationale for adopting the benchmark methodology and procedures for the review and approval of the methodology;

(c)   the criteria and procedures used to determine the benchmark, including a description of the input data, the priority given to different types of input data, minimum data needed to determine a benchmark, the use of any models or methods of extrapolation and any procedure for rebalancing the constituents of a benchmark's index;

(d)   the controls and rules that govern any exercise of discretion or judgment by the administrator or any contributors, to ensure consistency in the use of such discretion or judgment;

(e)   the procedures which govern benchmark determination in periods of stress, or periods where transaction data sources may be insufficient, inaccurate or unreliable and the potential limitations of the benchmark in such periods;

(f)   the procedures for dealing with errors in input data, or the benchmark determination, including when a re-determination of the benchmark will be required; and

(g)   the identification of potential limitations of a benchmark, including its operation in illiquid or fragmented markets and the possible concentration of inputs.

Article 17

Cessation of a benchmark

1.   An administrator shall publish, together with the benchmark statement referred to in Article 15, a procedure concerning the actions to be taken by the administrator in the event of changes to or the cessation of a benchmark or the cessation of the recognition of a benchmark pursuant to Article 21a or the endorsement pursuant to Article 21b. The procedure shall also be integrated into the code of conduct referred to in Article 9(1). The procedure may be drafted, where applicable, for families of benchmarks and shall be updated and published whenever a material change occurs .

2.   Supervised entities that use a benchmark shall produce and maintain robust written plans setting out the actions that they would take in the event that a benchmark materially changes or ceases to be produced. Where feasible and appropriate, such plans shall nominate one or several alternative benchmarks that might be referenced, indicating why such benchmarks would be suitable alternatives. The supervised entities shall provide the relevant competent authority with these plans upon request and where possible reflect them in the contractual relationship with clients .

Article 17a

Appropriateness of a benchmark

The administrator shall ensure the accuracy of the benchmark in relation to the description of the market or economic reality that the benchmark intends to measure in accordance with the benchmark statement requirements laid down in Article 15.

ESMA shall publish guidelines in accordance with Article 16 of Regulation (EU) No 1095/2010 six months after the entry into force of this Regulation setting out the definition of appropriateness in terms of acceptable levels of basis risk.

By December 2015, the Commission shall publish a report analysing existing practices with regard to managing basis risk in financial contracts, in relation to the use of benchmarks such as a interbank interest rate and a foreign exchange benchmark, and assessing if the conduct of business provisions laid down in Directive 2008/48/EC and Directive 2014/17/EU are sufficient to mitigate basis risk associated with benchmarks used in financial contracts.

TITLE V

USE OF BENCHMARKS PROVIDED BY AUTHORISED OR REGISTERED ADMINISTRATORS OR BY ADMINISTRATORS FROM THIRD COUNTRIES

Article 19

Use of a benchmark

1.   A supervised entity may use a benchmark or a combination of benchmarks in the Union as a reference in a financial instrument or financial contract if they are provided by an administrator authorised or registered in accordance with Article 23 or 23a, respectively , or an administrator located in a third country pursuant to Article 20, 21a or 21b.

2.   Where the object of a prospectus to be published under Directive 2003/71/EC or Directive 2009/65/EC is transferable securities or other investment that reference a benchmark, the issuer, offeror, or person asking for admission to trade on a regulated market shall ensure that the prospectus also includes clear and prominent information stating whether the benchmark has been registered or is provided by an administrator registered in the public register referred in Article 25a of this Regulation.

3.   ESMA shall withdraw, or bring into line with paragraph 1 of this Article, paragraphs 49 to 62 of ESMA's Guidelines for competent authorities and UCITS management companies, Guidelines on ETFs and other UCITS issues (30) .

Article 20

Equivalence

1.   Benchmarks provided by an administrator located in a third country may be used by supervised entities in the Union provided that the following conditions met, unless Article 21a or Article 21b applies :

(a)   the Commission has adopted an equivalence decision in accordance with paragraph 2 or 2a ;

(b)   the administrator is authorised or registered in, and is subject to supervision in, that third country;

(c)   the administrator has notified ESMA of its consent that its actual or prospective benchmarks may be used by supervised entities in the Union▌;

(d)   the administrator is duly registered under Article 25a ; and

(e)   the cooperation arrangements referred to in paragraph 3 of this Article are operational.

2.   The Commission may adopt a decision stating that the legal framework and supervisory practice of a third country ensures that:

(a)   administrators authorised or registered in that third country comply with binding requirements which are equivalent to the requirements resulting from this Regulation, in particular taking into account if the legal framework and supervisory practice of a third country ensures compliance with the IOSCO principles on financial benchmarks published on 17 July 2013 and with the IOSCO Principles for Oil Price Reporting Agencies, published on 5 October 2012 ; and

(b)   the binding requirements are subject to effective supervision and enforcement on an on-going basis in that third country.

(ba)   – there is effective exchange of information with foreign tax authorities;

–   there is no lack of transparency in legislative, judicial or administrative provisions;

–   there is a requirement for a substantive local presence;

–   the third country does not act as an offshore financial centre;

–   the third country does not provide for tax measures which entail no or nominal taxes or that no advantages are granted even without any real economic activity and substantial economic presence within the third country offering such tax advantages;

–   the third country is not listed as a Non-Cooperative Country and Territory by FATF;

–   the third country fully complies with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and on Capital and ensures an effective exchange of information in tax matters, including any multilateral tax agreements.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 38(2).

2a.   Alternatively, the Commission may adopt a decision stating that specific rules or requirements in a third country with respect to individual and specific administrators or individual and specific benchmarks or families of benchmarks are equivalent to those of this Regulation and that those individual and specific administrators or individual and specific benchmarks or families of benchmarks may therefore be used by supervised entities in the Union.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 38(2).

3.   ESMA shall establish cooperation arrangements with the competent authorities of third countries whose legal frameworks and supervisory practices have been recognised as equivalent in accordance with paragraph 2 or 2a . Such arrangements shall specify at least:

(a)   the mechanism for the exchange of information between ESMA and the competent authorities of third countries concerned, including access to all relevant information regarding the administrator authorised in that third country that is requested by ESMA;

(b)   the mechanism for prompt notification to ESMA where a third country competent authority deems that the administrator authorised in that third country that it is supervising is in breach of the conditions of its authorisation or other domestic legislation;

(c)   the procedures concerning the coordination of supervisory activities ▌.

4.   ESMA shall develop draft regulatory technical standards to determine the minimum content of the cooperation arrangements referred to in paragraph 3 so as to ensure that the competent authorities and ESMA are able to exercise all their supervisory powers under this Regulation:

ESMA shall submit those draft regulatory technical 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 procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 21

Withdrawal of registration of third country administrators

2.   ESMA shall withdraw the registration of an administrator referred to in point (d) of Article 20(1) where ESMA has well-founded reasons, based on documented evidence, that the administrator :

(a)   ▌is acting in a manner which is clearly prejudicial to the interests of the users of its benchmarks or the orderly functioning of markets; or

(b)   ▌has seriously infringed the national domestic legislation or other provisions applicable to it in the third country and on the basis of which the Commission has adopted the decision in concordance with Article 20(2) or (2a) .

3.   ESMA shall take a decision under paragraph 2 only if the following conditions are fulfilled:

(a)   ESMA has referred the matter to the competent authority of the third country and that competent authority has not taken the appropriate measures needed to protect investors and the proper functioning of the markets in the Union, or has failed to demonstrate that the administrator concerned complies with the requirements applicable to it in the third country;

(b)   ESMA has informed the competent authority of the third country of its intention to withdraw the registration of the administrator, at least 30 days before the withdrawal.

4.   ESMA shall inform the other competent authorities of any measure adopted in accordance with paragraph 2 without delay and shall publish its decision on its website.

Article 21a

Recognition of an administrator in a third country

1.   Until such time as an equivalence decision in accordance with Article 20(2) is adopted, benchmarks provided by an administrator located in a third country may be used by supervised entities in the Union provided that the administrator acquires prior recognition by ESMA in accordance with this Article.

2.   An administrator located in a third country intending to obtain prior recognition as referred to in paragraph 1 shall comply with all the requirements established in this Regulation but shall be exempt from Articles 11, 13a and 14. Where an administrator is able to demonstrate that a benchmark it provides is based on regulated data or is a commodity benchmark that is not based on submissions by contributors the majority of which are not supervised entities where the main business of the group is the provision of investment services within the meaning of Directive 2014/65/EU or banking activities under Directive 2013/36/EU, the exemptions for such benchmarks, as provided for in Articles 12a and 14a respectively, shall apply to the administrator.

3.   An administrator located in a third country intending to obtain prior recognition as referred to in paragraph 1 shall also be able to do so by complying in full with all requirements established in the IOSCO principles for financial benchmarks, or where the administrator complies with the criteria laid down in Article 14a(1), the IOSCO principles for oil price reporting agencies . Such compliance shall be reviewed and certified by an independent external auditor at least every two years, and whenever a material change to the benchmark is made, and the audit reports shall be sent to ESMA and, upon request, made available to users.

4.   An administrator located in a third country intending to obtain prior recognition as referred to in paragraph 1 shall have a representative established in the Union. The representative shall be a natural person domiciled in the Union or a legal person with its registered office in the Union. The representative shall be expressly designated by the administrator located in a third country to act on its behalf concerning all communication with the authorities including ESMA and relevant competent authorities and any other relevant person in the Union with regard to the administrator's obligations under this Regulation.

5.   An administrator located in a third country intending to obtain prior recognition as referred to in paragraph 1 shall apply for recognition with ESMA. The applicant administrator shall provide all information, as set out in Article 23 or 23a, necessary to satisfy ESMA that it has established, at the time of recognition, all the necessary arrangements to meet the requirements referred to in paragraph 2 or 2a and shall indicate the list of its actual or prospective benchmarks which may be used in the Union and, where the administrator is supervised by a third-country authority, the competent authority responsible for its supervision in the third country.

Within [90] days of receiving the application referred to in the first subparagraph, ESMA, after consulting relevant competent authorities, shall verify that the conditions laid down in paragraphs 2 or 2a, 3 and 4 are fulfilled. ESMA may delegate this task to a relevant national competent authority.

If ESMA considers that this is not the case, it shall refuse the recognition request explaining the reasons for the refusal.

Without prejudice to the third subparagraph, no recognition shall be granted unless the following additional conditions are met:

(i)   where the administrator located in a third country is supervised by a third country authority, an appropriate cooperation arrangement is in place between the relevant competent authority or ESMA and the third country authority of the administrator in order to ensure at least an efficient exchange of information;

(ii)   the effective exercise by the competent authority or ESMA of its supervisory functions under this Regulation is not prevented by the laws, regulations or administrative provisions of the third country where the administrator is located.

6.   Where an administrator located in a third country intends to obtain prior recognition through compliance with this Regulation as laid down in paragraph 2 of this Article, and where the administrator considers that a benchmark it provides may be entitled to the exemptions in Article 12a and 14a, it shall, without undue delay, notify ESMA thereof. It shall provide documentary evidence to support its assertion.

7.   Where an administrator located in a third country considers that the cessation of a benchmark it provides would have a significant adverse impact on the integrity of markets, financial stability, consumers, the real economy, or the financing of households and corporations in one or more Member States, it may apply to ESMA for an exemption from one or more of the applicable requirements of this Regulation or of the relevant IOSCO principles, for a specific and limited period of time not exceeding 12 months. It shall provide documentary evidence to support its application.

ESMA shall consider the application within 30 days and inform the third country administrator whether it is exempt from one or more of the requirements as specified in its application and the length of time of the exemption.

ESMA may extend the exemption period upon its expiry by up to a further 12 months where there is good reason to do so

8.   ESMA shall develop draft regulatory technical standards to specify further the recognition process, the form and content of the application referred to in paragraph 4, the presentation of the information required in paragraph 5 and any delegation of tasks and responsibilities to national competent authorities with respect to those paragraphs.

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 subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 21b

Endorsement

1.   An administrator located in the Union and authorised in accordance with Article 23 or registered in accordance with Article 23a may apply to its competent authority to endorse a benchmark or a family of benchmarks provided in a third country for their use in the Union, provided that the following conditions are met:

(a)   the endorsing administrator has verified and is able to demonstrate to its competent authority that the provision of the benchmark or family of benchmarks to be endorsed fulfils requirements which:

(i)   are at least as stringent as the requirements set out in this Regulation;

(ii)   ensure full compliance with the IOSCO Principles for Financial Benchmarks as reviewed and certified by an independent external auditor at least every two years or when a material change to the benchmark occurs; or

(iii)   ensure full compliance with the IOSCO Principles for Oil Price Reporting Agencies, as reviewed and certified by an independent external auditor at least every two years or when a material change to the benchmark occurs, where the benchmark to be endorsed meets the criteria laid down in Article 14a(1);

(b)   the endorsing administrator has the necessary expertise to monitor the provision of benchmark activities performed in a third country effectively and to manage the risks associated.

2.   The applicant administrator shall provide all information necessary to satisfy the competent authority that, at the time of application, all the conditions referred to in paragraph 1 are fulfilled, including the audit reports required under points (a) (ii) and (iii) of that paragraph.

3.   Within 90 days of receipt of the application, the relevant competent authority shall examine the application for an endorsement and adopt a decision to approve or refuse it. The relevant competent authority shall notify ESMA of any benchmarks or families of benchmarks that have been approved for endorsement and the endorsing administrator.

4.   A benchmark or family of benchmarks endorsed shall be considered to be a benchmark or family of benchmarks provided by the endorsing administrator.

5.   The administrator that has endorsed a benchmark or family of benchmarks provided in a third country shall remain responsible for ensuring the endorsed benchmark or family of benchmarks fulfil the conditions set out in paragraph 1.

6.   Where the competent authority of the endorsing administrator has well-founded reasons to consider that the conditions laid down under paragraph 1 are no longer fulfilled it shall have the power to withdraw its approval of the endorsement and shall inform ESMA. Article 17 shall apply in the event of a cessation of the endorsement.

TITLE VI

AUTHORISATION AND SUPERVISION OF ADMINISTRATORS

Chapter 1

Authorisation

Article 23

Authorisation procedure for a critical benchmark

1.   A natural or legal person located in the Union that intends to act as an administrator of at least one critical benchmark shall apply to the competent authority designated under Article 29 for the Member State in which that person is located.

2.   The application for authorisation in accordance with paragraph 1 shall be made▌within 30 ▌ days of any agreement entered into by a supervised entity to use an index provided by that administrator as a reference to a financial instrument or financial contract ▌.

2a.   Once a benchmark has been defined as critical, be this ´national´ or ´European´ in nature, the relevant competent authority shall be responsible for granting authorisation for the provision of that benchmark in line with its new legal status, after verifying that all the requirements have been fulfilled.

3.   The applicant administrator shall provide all information necessary to satisfy the competent authority that it has established, at the time of authorisation, 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(1) or estimate thereof, where available, for each benchmark.

4.   Within 20 days of receipt of the application, the relevant competent authority shall assess whether the application is complete and shall notify the applicant accordingly. If the application is incomplete, then the applicant shall submit the additional information required by the relevant competent authority.

5.   ▌The relevant competent authority shall examine the application for an authorisation and adopt a decision to authorise or refuse within 60 days of receipt of a complete application .

Within five ▌days of the adoption of a decision whether to authorise or refuse authorisation, the competent authority shall notify ▌the applicant administrator concerned. Where the competent authority refuses to authorise the applicant administrator, it shall give reasons for its decision.

5a.   If the relevant competent authority decides to refuse to grant authorisation for the provision of a critical benchmark which was already being provided without that status, the relevant competent authority may issue a temporary permit for a period of time not exceeding six months, during which the benchmark may continue to be provided on the basis of the previous model pending fulfilment of the relevant requirements for its authorisation as a critical benchmark.

The relevant competent authority may extend the permit for an additional period of time not exceeding six months.

5b.   Should the administrator and/or the contributors fail to fulfil the requirements for continuing to provide a benchmark defined as critical by the end of that period, the provision of the benchmark will cease in accordance with Article 17.

6.   The competent authority shall notify ESMA of any decision to authorise an applicant administrator ▌within 10 days .

7.   The Commission shall be empowered to adopt delegated acts in accordance with Article 37 concerning measures to further specify information to be provided in the application for authorisation and in the application for registration, taking into account the principle of proportionality and the costs to the applicants and competent authorities.

Article 23a

Registration process for a non-critical benchmark

1.   A natural or legal person located in the Union that intends to act exclusively as an administrator of non-critical benchmarks shall apply for registration to the competent authority designated under Article 29 for the Member State in which that person is located.

2.   A registered administrator shall comply at all times with the conditions laid down in this Regulation and shall notify the competent authority of any material changes thereof.

3.   An application in accordance with paragraph 1 shall be made within 30 days of any agreement entered into by a supervised entity to use an index provided by the person as a reference to a financial instrument or financial contract or to measure the performance of an investment fund.

4.   The applicant administrator shall provide:

(a)   documentation to satisfy the competent authority that it meets the requirements laid down in Articles 5(3a), 5c, 6, where applicable, 7b and 15; and

(b)   the total reference value, or estimate thereof, where available, of each benchmark.

5.   Within 15 days of receipt of the application, the relevant competent authority shall assess whether the application is complete and shall notify the applicant accordingly. If the application is incomplete, the applicant shall submit the additional information required by the relevant competent authority.

6.   The relevant competent authority shall register the applicant within 15 days of receipt of a complete application for registration.

7.   Where the relevant competent authority believes a benchmark should be categorised as critical pursuant Article 13(1), it shall notify ESMA and the administrator within 30 days of receipt of the complete application.

8.   Where the registering competent authority believes a benchmark should be categorised as critical pursuant Article 13(2a) or 13(2c), it shall notify ESMA and the administrator within 30 days after receipt of the complete application, and submit to ESMA its assessment pursuant to Article 13(2a) or 13(2c).

9.   Where a registered administrator´s benchmark is categorised as critical, the administrator shall apply for authorisation pursuant to Article 23 within 90 days following the receipt of the notification laid down in Article 13(2b) or the opinion laid down Article 13(2g).

Article 24

Withdrawal or suspension of authorisation or registration

1.   The competent authority shall withdraw or suspend the authorisation or registration of an administrator where the administrator:

(a)   expressly renounces the authorisation or has provided no benchmarks for the preceding twelve months;

(b)   has obtained the authorisation or registration by making false statements or by any other irregular means;

(c)   no longer meets the conditions under which it was authorised or registered ; or

(d)   has seriously or repeatedly infringed the provisions of this Regulation.

2.   The competent authority shall notify ESMA of its decision within seven days.

2a.   Following the adoption of a decision to suspend the authorisation or registration of an administrator, and where cessation of the benchmark would result in a force majeure event, or frustrate or otherwise breach the terms of any financial contract or financial instrument which references that benchmark, the provision of the benchmark may be permitted by the relevant competent authority of the Member State where the administrator is located until the decision of suspension has been withdrawn. During such period of time, the use of such benchmark by supervised entities shall be permitted only for financial instruments and financial contracts that already reference the benchmark. No new financial contracts or financial instruments shall reference the benchmark.

2b.   Following the adoption of a decision to withdraw the authorisation or registration of an administrator, Article 17(2) shall apply.

Chapter 2

Notification of benchmarks

Article 25a

Administrators´ register and initial use of a benchmark

1.   ESMA shall establish and maintain a public register that contains the following information:

(a)   the identities of the administrators authorised or registered under the provisions of Articles 23 and 23a, as well as the competent authority responsible for the supervision thereof;

(b)   the identities of the administrators that have notified ESMA of their consent referred to in Article 20(1)(c) and the third country competent authority responsible for the supervision thereof;

(c)   the identities of the administrators that acquired recognition in accordance with Article 21a and the third country competent authority responsible for the supervision thereof;

(d)   the benchmarks that are endorsed in accordance with the procedure laid down in Article 21b and the identities of the endorsing administrators.

2.   Before an index is used by a supervised entity as a benchmark in the Union, the entity shall verify that the provider of the relevant index is referenced on the website of ESMA as an authorised, registered or recognised administrator in accordance with this Regulation.

Chapter 3

Supervisory cooperation

Article 26

Delegation of tasks between competent authorities

1.   In accordance with Article 28 of Regulation (EU) No 1095/2010 a competent authority may delegate its tasks under this Regulation to the competent authority of another Member State with its prior written consent. The competent authorities shall notify ESMA of any proposed delegation 60 days prior to such delegation taking effect.

2.   A competent authority may delegate ▌its tasks under this Regulation to ESMA subject to the agreement of ESMA.▐

3.   ESMA shall notify the Member States of a proposed delegation within seven days. ESMA shall publish details of any agreed delegation within seven days of notification.

Article 26a

Breach of Union law by national competent authorities

1.   Where a national competent authority has not applied this Regulation or has applied it in a way which appears to be a breach of Union law, ESMA may use its powers under Article 17 of Regulation (EU) No 1095/2010 in accordance with the procedures laid down in that Article and may, for the purposes of Article 17(6) of Regulation (EU) No 1095/2010, adopt individual decisions addressed to benchmark administrators supervised by that national competent authority and to contributors to a benchmark supervised by that national competent authority where those contributors are supervised entities.

2.   Where the relevant benchmark is a critical benchmark, ESMA shall ensure cooperation with the college of competent authorities in accordance with the procedure laid down Article 34.

Article 27

Disclosure of information from another Member State

1.   The competent authority may disclose information received from another competent authority only if:

(a)   it has obtained the written agreement of that competent authority and the information is disclosed only for the purposes for which that competent authority gave its agreement; or

(b)   ▌such disclosure is necessary for legal proceedings.

Article 28

Cooperation on investigations

1.   The relevant competent authority may request the assistance of another competent authority with regard to on-site inspections or investigations. The competent authority receiving the request shall cooperate to the extent possible and appropriate.

2.   The competent authority making the request referred to in paragraph 1 shall inform ESMA thereof. In the event of an investigation or inspection with cross-border effect, the competent authorities may request ESMA to coordinate the on-site inspection or investigation.

3.   Where a competent authority receives a request from another competent authority to carry out an on-site inspection or an investigation, it may:

(a)   carry out the on-site inspection or investigation itself;

(b)   allow the competent authority which submitted the request to participate in an on-site inspection or investigation;

(c)   appoint auditors or experts to support or carry out the on-site inspection or investigation.

Chapter 4

Role of Competent Authorities

Article 29

Competent authorities

1.   For administrators and supervised contributors, each Member State shall designate the relevant competent authority responsible for carrying out the duties resulting from this Regulation and shall inform the Commission and ESMA thereof.

2.   Where a Member State designates more than one competent authority, it shall clearly determine the respective roles and shall designate a single authority to be responsible for coordinating cooperation and the exchange of information with the Commission, ESMA and other Member States’ competent authorities.

3.   ESMA shall publish on its website a list of the competent authorities designated in accordance with paragraph 1 of this Article and pursuant to point (a) of Article 25a(1) .

Article 30

Powers of competent authorities

1.   In order to fulfil their duties under this Regulation, competent authorities shall have in conformity with national law, at least the following supervisory and investigatory powers:

(a)   have access to any relevant document and other data in any form, and to receive or take a copy thereof;

(b)   require or demand information from any person ▌involved in the provision of, and contribution to, a benchmark, including any service provider pursuant to Article 6(3a), as well as their principals, and if necessary, ▌summon and question any such person with a view to obtaining information;

(c)   in relation to commodity benchmarks ▌, request information from contributors on related spot markets according, where applicable, to standardised formats and reports on transactions, and have direct access to traders' systems;

(d)   carry out on-site inspections or investigations, at sites other than the private residences of natural persons;

(e)   enter premises of natural and legal persons in order to seize documents and other data in any form, where a reasonable suspicion exists that documents and other data related to the subject-matter of the inspection or investigation may be relevant to prove a breach of this Regulation. Where prior authorisation is needed from the judicial authority of the Member State concerned, in accordance with national law, such power shall only be used after having obtained that prior authorisation;

(f)   require existing recordings of telephone conversations, electronic communications or other data traffic records held by supervised entities;

(g)   request the freezing or sequestration of assets or both;

(i)   require temporary cessation of any practice that the competent authority considers contrary to this Regulation;

(j)   impose a temporary prohibition on the exercise of professional activity;

(k)   take all necessary measures to ensure that the public is correctly informed about the provision of a benchmark, including by requiring a person who has published or disseminated the benchmark to publish a corrective statement about past contributions to or figures of the benchmark;

(ka)   review and require modifications of the compliance statement.

2.   The competent authorities shall exercise their functions and powers, referred to in paragraph 1, and the powers to impose sanctions referred to in Article 31, in accordance with their national legal frameworks, in any of the following ways:

(a)   directly;

(b)   in collaboration with other authorities or with market undertakings;

(c)   under their responsibility by delegation to such authorities or to market undertakings;

(d)   by application to the competent judicial authorities.

For the exercise of those powers, competent authorities shall have in place adequate and effective safeguards in regard to the right of defence and fundamental rights.

3.   Member States shall ensure that appropriate measures are in place so that competent authorities have all the supervisory and investigatory powers that are necessary to fulfil their duties.

4.   A person shall not be considered in breach of any restriction on disclosure of information posed by a contract or by any legislative, regulatory or administrative provision when making information available in accordance with paragraph 2.

Article 31

Administrative measures and sanctions

1.   Without prejudice to the supervisory powers of competent authorities in accordance with Article 34, Member States shall, in conformity with national law, provide for competent authorities to have the power to take appropriate administrative measures and impose administrative measures and sanctions at least for:

(a)   the infringements of Articles 5, 5a, 5b, 5c, 5d, 6, 7, 7a, 7b, 8, 9, ▌11, 14, 15, 17, ▌19, ▌23 and 23a of this Regulation where they are apply; and

(b)   failure to cooperate or comply in an investigation or with an inspection or request covered by Article 30.

2.   In the event of an infringement referred to in paragraph 1, Member States shall, in conformity with national law, confer on competent authorities the power to apply at least the following administrative measures and sanctions:

(a)   an order requiring the administrator or supervised entity responsible for the infringement to cease the conduct and to desist from repeating that conduct;

(b)   the disgorgement of the profits gained or losses avoided because of the infringement where those can be determined;

(c)   a public warning which indicates the administrator or supervised entity responsible and the nature of the infringement ;

(d)   withdrawal or suspension of the authorisation of an administrator ;

(e)   a temporary ban prohibiting any natural person, who is held responsible for such infringement , from exercising management functions in administrators or contributors;

(f)   the imposition of maximum administrative pecuniary sanctions of at least three times the amount of the profits gained or losses avoided because of the infringement where those can be determined; or

(1)   in respect of a natural person maximum administrative pecuniary sanctions of at least:

(i)   for infringements of Articles 5 , 5a, 5b, 5c, 5d, 6, 7 , 7a, 7b, 8, 9, ▌11, 12a(2), 14, 15, ▌17, 18, 19▌ and 23, EUR 500 000 or in the Member States where the Euro is not the official currency, the corresponding value in the national currency on the date of entry into force of this Regulation; or

(ii)   for infringements of point (b)▌ of Article 7(1) or of Article 7(4) EUR 100 000 or in the Member States where the Euro is not the official currency, the corresponding value in the national currency on the date of entry into force of this Regulation;

(2)   in respect of a legal person up to maximum administrative pecuniary sanctions of at least:

(i)   for infringements of Articles 5 , 5a, 5b, 5c, 5d, 6, 7 , 7a, 7b, 8, 9, ▌11, 14, 15, ▌17, 18, 19▌ and 23, whichever is the higher of EUR 1 000 000 or 10 % of its total annual turnover according to the last available accounts approved by the management body. Where the legal person is a parent undertaking or a subsidiary of a parent undertaking which has to prepare consolidated financial accounts according to Directive 2013/34/EU, the relevant total annual turnover shall be the total annual turnover or the corresponding type of income according to Directive 86/635/EEC for banks and Directive 91/674/EEC for insurance companies according to the last available consolidated accounts approved by the management body of the ultimate parent undertaking or if the person is an association, 10% of the aggregate turnovers of its members; or

(ii)   for infringements of points (b) and (c) of Article 7 (1), whichever is the higher of EUR 250 000 or 2 % of its total annual turnover according to the last available accounts approved by the management body; where the legal person is a parent undertaking or a subsidiary of a parent undertaking which has to prepare consolidated financial accounts according to Directive 2013/34/EU, the relevant total annual turnover shall be the total annual turnover or the corresponding type of income according to Directive 86/635/EEC for banks and Directive 91/674/EEC for insurance companies according to the last available consolidated accounts approved by the management body of the ultimate parent undertaking or if the person is an association, 10% of the aggregate turnovers of its members.

3.   By [12 months after entry into force of this Regulation] Member States shall notify the rules regarding paragraphs 1 and 2 to the Commission and ESMA.

Member States may decide not to lay down rules for administrative sanctions for infringements which are subject to criminal sanctions under their national law. In that case, Member States shall communicate to the Commission and ESMA the relevant criminal law provisions along with the notification referred to in the first subparagraph.

They shall notify the Commission and ESMA without delay of any subsequent amendment thereto.

4.   Member States may provide competent authorities under national law to have other sanctioning powers in addition to those referred to in paragraph 1 and may provide for higher levels of sanctions than those established in that paragraph.

Article 32

Exercise of supervisory and sanctioning powers and obligation to cooperate

1.   Member States shall ensure that, when determining the type, level and proportionality of administrative sanctions, competent authorities take into account all relevant circumstances, including where appropriate:

(a)   the gravity and duration of the infringement ;

(aa)   the criticality of the benchmark to financial stability and the real economy;

(b)   the degree of responsibility of the responsible person;

(c)   ▌the total turnover of the responsible legal person or the annual income of the responsible natural person;

(d)   the level of the profits gained or losses avoided by the responsible person, insofar as they can be determined;

(e)   the level of cooperation of the responsible person with the competent authority, without prejudice to the need to ensure disgorgement of profits gained or losses avoided by that person;

(f)   previous breaches by the person concerned;

(g)   measures taken, after the breach, by a responsible person to prevent the repetition of the breach.

2.   In the exercise of their sanctioning powers under circumstances defined in Article 31 competent authorities shall cooperate closely to ensure that the supervisory and investigative powers and administrative sanctions produce the desired results of this Regulation. They shall also coordinate their action in order to avoid possible duplication and overlap when applying supervisory and investigative powers and administrative sanctions and fines to cross border cases.

2a.   Where Member States have chosen, in accordance with Article 31, to lay down criminal sanctions for infringements of the provisions referred to in that Article, they shall ensure that appropriate measures are in place so that competent authorities have all the necessary powers to liaise with judicial authorities within their jurisdiction to receive specific information relating to criminal investigations or proceedings commenced for possible infringements of this Regulation and provide the same to other competent authorities and ESMA to fulfil their obligation to cooperate with each other and ESMA for the purposes of this Regulation.

2b.   Competent authorities shall provide assistance to competent authorities of other Member States. In particular, they shall exchange information and cooperate in any investigation or supervisory activities. Competent authorities may also cooperate with competent authorities of other Member States with respect to facilitating the recovery of fines.

Article 33

Publication of decisions

1.   A decision imposing an administrative sanction or measure for infringements of this Regulation shall be published by competent authorities on their official website immediately after the person sanctioned is informed of that decision. The publication shall include at least information on the type and nature of the infringement and the identity of the persons responsible. This obligation does not apply to decisions imposing measures that are of an investigatory nature.

2.   Where the publication of the identity of the legal persons or personal data of natural persons is considered by the competent authority to be disproportionate following a case-by-case assessment conducted on the proportionality of the publication of such data, or where publication jeopardises the stability of financial markets or an on-going investigation, competent authorities shall either:

(a)   delay the publication of the decision to impose a sanction or a measure until the moment where the reasons for non-publication cease to exist;

(b)   publish the decision to impose a sanction or a measure on an anonymous basis in a manner which is in conformity with national law, if such anonymous publication ensures an effective protection of the personal data concerned; In the case of a decision to publish a sanction or measure on an anonymous basis the publication of the relevant data may be postponed for a reasonable period of time if it is foreseen that within that period the reasons for anonymous publication shall cease to exist;

(c)   not publish the decision to impose a sanction or measure at all in the event that the options set out in (a) and (b) above are considered insufficient to ensure:

(i)   that the stability of financial markets would not be put in jeopardy; or

(ii)   the proportionality of the publication of such decisions with regard to measures which are deemed to be of a minor nature.

3.   Where the decision to impose a sanction or measure is subject to an appeal before the relevant judicial or other authorities, competent authorities shall also publish, immediately, on their official website such information and any subsequent information on the outcome of such appeal. Moreover, any decision annulling a previous decision to impose a sanction or a measure shall also be published.

4.   Competent authorities shall ensure that any publication, in accordance with this Article, shall remain on their official website for a period of at least five years after its publication. Personal data contained in the publication shall only be kept on the official website of the competent authority for the period which is necessary in accordance with the applicable data protection rules.

4a.   Member States shall annually provide ESMA with aggregated information regarding all sanctions and measures imposed pursuant to Article 31. That obligation does not apply to measures of an investigatory nature. ESMA shall publish that information in an annual report.

Where Member States have chosen, in accordance with Article 31, to lay down criminal sanctions for infringements of the provisions referred to in that Article, their competent authorities shall annually provide ESMA with anonymised and aggregated data regarding all criminal investigations undertaken and criminal sanctions imposed. ESMA shall publish data on criminal sanctions imposed in an annual report.

Article 34

College of competent authorities

1.   Within 30 ▌ days from the inclusion of a benchmark in the list of critical benchmarks pursuant to Article 25a, with the exception of critical benchmarks that are national in nature as laid down in point 21 of Article 3(1) , the relevant competent authority shall establish a college of competent authorities.

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

3.   Competent authorities of other Member States shall have the right to be member of the college where, if that ▌benchmark were to cease to be provided, it would have a significant adverse impact on the financial stability, or the orderly functioning of markets, or consumers, or the real economy of those Member States.

Where a competent authority intends to become a member of a college pursuant to the first subparagraph, it shall submit a request to the competent authority of the administrator containing evidence that the requirements of that provision are fulfilled. The relevant competent authority of the administrator shall consider the request and notify the requesting authority within 30 days of receipt of the request whether or not it considers those requirements to be fulfilled. Where it considers those requirements not to be fulfilled, the requesting authority may refer the matter to ESMA in accordance with paragraph 10.

4.   ESMA shall contribute to promoting and monitoring the efficient, effective and consistent functioning of colleges of supervisors referred to in this Article in accordance with Article 21 of Regulation (EU) No 1095/2010. To that end, ESMA shall participate as appropriate and shall be considered to be a competent authority for that purpose.

5.   ESMA shall chair the meetings of the college, coordinate the actions of the college and ensure efficient exchange of information among members of the college.

6.   The competent authority of the administrator shall establish written arrangements within the framework of the college regarding the following matters:

(a)   information to be exchanged between competent authorities;

(b)   the decision-making process between the competent authorities;

(c)   cases in which the competent authorities must consult each other;

(d)   the assistance to be provided under Article 14(5a) in the enforcement of the measures referred to in Article 14(3) .

Where the administrator provides more than one benchmark, ESMA may establish a single college in respect of all the benchmarks provided by that administrator.

7.   In the absence of agreement concerning the arrangements under paragraph 6, any members of the college, other than ESMA, may refer the matter to ESMA. The competent authority of the administrator shall give due consideration to any advice provided by ESMA concerning the written coordination arrangements before agreeing their final text. The written coordination arrangements shall be set out in a single document containing full reasons for any significant deviation from the advice of ESMA. The competent authority of the administrator shall transmit the written coordination arrangements to the members of the college and to ESMA.

8.   Before taking any measures referred to in Article ▌24 and ▌, where applicable, Articles 14 and 23, the competent authority of the administrator shall consult the members of the college. The members of the college shall do everything reasonable within their power to reach an agreement within the timeframe specified in the written arrangements referred to in paragraph 6 . A mediation mechanism shall be established to assist in finding a common view among the competent authorities in the event of any disagreement.

9.   In the absence of agreement between the members of the college ▌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 there is a disagreement with the measure taken in accordance with Articles ▌23 and 24▌.

Where, 20 days after the referral to ESMA provided for in the first subparagraph, the issue is not settled, the competent authority of the administrator shall take the final decision and provide a detailed explanation in writing of its decision to the authorities referred to in the first subparagraph and to ESMA.

Where ESMA considers that the competent authority of the administrator has taken any measures referred to in paragraph 8 which may not be in conformity with Union law it shall act in accordance with Article 17 of Regulation (EU) No 1095/2010.

9a.   Any of the competent authorities within a college that fails to agree on any of the measures to be taken under Article 13a or 14 may refer the matter to ESMA. Without prejudice to Article 258 TFEU, ESMA may act in accordance Article 19 of Regulation (EU) No 1095/2010.

9b.   Any measure taken under Article 13a or 14 shall remain in force at least until there is agreement by the college, pursuant to paragraphs 8 and 9a.

Article 35

Cooperation with ESMA

1.   The competent authorities shall cooperate with ESMA for the purposes of this Regulation, in accordance with Regulation (EU) No 1095/2010.

2.   The competent authorities shall, without delay, provide ESMA with all information necessary to carry out its duties, in accordance with Article 35 of Regulation (EU) No 1095/2010.

2a.   Performing its role in the implementation and monitoring of Regulation (EU) No 1227/2011, the Agency for the Cooperation of Energy Regulators (ACER) and other relevant supervisors shall cooperate with ESMA for the purposes of this Regulation and shall be consulted during the drafting of all regulatory technical standards and delegated acts and, without delay, shall supply all information necessary to fulfil its obligations.

3.   ESMA shall develop draft implementing technical standards to determine the procedures and forms for exchange of information as referred to in paragraph 2.

ESMA shall submit the draft implementing technical standards referred to in the first subparagraph 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 (EU) No 1095/2010.

Article 36

Professional secrecy

1.   Any confidential information received, exchanged or transmitted pursuant to this Regulation shall be subject to the conditions of professional secrecy laid down in paragraph 2.

2.   The obligation of professional secrecy applies to all persons who work or who have worked for the competent authority or for any authority or market undertaking or natural or legal person to whom the competent authority has delegated its powers, including auditors and experts contracted by the competent authority.

3.   Information covered by professional secrecy may not be disclosed to any other person or authority except by virtue of provisions laid down by law.

4.   All the information exchanged between the competent authorities under this Regulation that concerns business or operational conditions and other economic or personal affairs shall be considered confidential and shall be subject to the requirements of professional secrecy, except where the competent authority states at the time of communication that such information may be disclosed or such disclosure is necessary for legal proceedings.

TITLE VII

DELEGATED AND IMPLEMENTING ACTS

Article 37

Exercise of the delegation

1.   The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

2.   The power to adopt delegated acts referred to in Articles 3(2) ▌and 23(7) shall be conferred on the Commission for an indeterminate period of time from [date of entry into force of this Regulation].

3.   The delegation of power referred to in Articles 3(2) ▌and 23(7) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of power specified in that decision. It shall take effect on the day following the publication of the decision in the Official Journal of the European Union or on a later date specified therein. It shall not affect the validity of any delegated acts already in force.

4.   As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

5.   A delegated act adopted pursuant to Articles 3(2) ▌and 23(7) shall enter into force only if no objection has been expressed by either the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.

Article 38

Committee procedure

1.   The Commission shall be assisted by the European Securities Committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011.

2.   Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply, having regard to the provisions of Article 8 thereof.

TITLE VIII

Transitional and Final Provisions

Article 39

Transitional provisions

1.   An administrator providing a benchmark on [the date of entry into force of this Regulation] shall apply for authorisation or registration under Article 23 or 23a within [12 months after the date of application].

1a.   The competent national authorities shall decide which of the registered benchmarks are to be considered 'critical'. Those benchmarks shall be authorised in accordance with the provisions of Article 23.

2.   A natural or legal person that submitted an application for authorisation or registration in accordance with paragraph 1 may continue to produce an existing benchmark which may be used by supervised entities unless and until such authorisation is refused.

3.   Where an existing benchmark does not meet the requirements of this Regulation, but changing that benchmark to comply with the requirements of this Regulation would result in a force majeure event, frustrate or otherwise breach the terms of any financial contract or financial instrument which references that benchmark, the continued use of the benchmark in existing financial contracts and financial instruments may be permitted by the relevant competent authority of the Member State where the natural or legal person providing the benchmark is located until such time as the competent authority considers it possible for the benchmark to cease being used or be substituted by another benchmark without causing detriment to either party to the contract .

3a.   New financial instruments or financial contracts shall not reference an existing benchmark that does not meet the requirements of this Regulation after [the entry into application of this Regulation] .

3b.   By way of derogation from paragraph 3a, new financial instruments may reference an existing benchmark that does not meet the requirements of this Regulation for a period of one year after [the date of application of this Regulation], provided that the financial instrument is necessary for hedging purposes in order to manage the risk of an existing financial instrument that references that benchmark.

4.   Unless the Commission has adopted an equivalence decision as referred to in Article 20(2) or (2a), supervised entities in the Union shall only use a benchmark provided by an administrator located in a third country, where it is used as a reference in existing financial instruments and financial contracts ▌at the time of entry into force of this Regulation ▌or where it is used in new financial instruments and financial contracts for three years from the date of application of this Regulation.

Article 39a

Deadline for updating the prospectuses and key information documents

Article 19(2) is without prejudice to existing prospectuses approved under Directive 2003/71/EC prior to [the entry into force of this Regulation]. For prospectuses approved prior to [the entry into force of this Regulation] under Directive 2009/65/EC the underlying documents shall be updated at the first opportunity and in any event by …* [[twelve] months after the entry into force of this Regulation].

Article 40

Review

1.   By 1 January 2018, the Commission shall review and submit a report to the European Parliament and to the Council on this Regulation and in particular:

(a)   the functioning and effectiveness of the critical benchmark and mandatory participation regime under Articles 13 and 14 and the definition of a critical benchmark in Article 3; and

(b)   the effectiveness of the supervisory regime in Title VI and the colleges under Article 34 and the appropriateness of supervision of certain benchmarks by a Union body.

1a.   The Commission shall review the evolution of international principles, particularly those applicable to PRA commodity benchmarks, as well as the evolution of legal frameworks and supervisory practices in third countries concerning the provision of benchmarks, and shall submit a report to the European Parliament and to the Council by …* [four years after the date of the entry into force of this Regulation] and every four years thereafter. Those reports shall be accompanied by a legislative proposal, if appropriate.

Article 41

Entry into force

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union .

It shall apply from 6 months after ... [the entry into force of the delegated acts adopted by the Commission under this Regulation] .

However, Article 13(1) and Articles 14 and 34 shall apply from ...[6 months after entry into force].

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President

(1)The matter was referred back to the committee responsible for reconsideration pursuant to Rule 61(2), second subparagraph (A8-0131/2015 ).
(2)Amendments: new or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌.
(3)OJ C 177, 11.6.2014, p. 42.
(4)OJ C 113, 15.4.2014, p. 1.
(5)OJ L 145, 30.4.2004, p. 1.
(6)OJ L 345, 31.12.2003, p. 64.
(7)OJ L 302, 17.11.2009, p. 32.
(8)OJ L 326, 8.12.2011, p. 1.
(9) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 (OJ L 60, 28.2.2014, p. 34).
(10) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).
(11) Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 12.6.2014, p. 1).
(12)OJ L 281, 23.11.1995, p. 31.
(13)OJ L 8, 12.1.2001, p. 1.
(14). Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (OJ L 326, 8.12.2011, p. 1).
(15) OJ L 55, 28.2.2011, p. 13.
(16) Directive 2013/36/EU of the European Parliament and of 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).
(17)Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC ( OJ L 211, 14.8.2009, p. 55) .
(18)Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC ( OJ L 9, 14.8.2009, p. 112) .
(19) Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community (OJ L 302, 18.11.2010, p. 1).
(20) Commission Implementing Regulation (EU) No 1348/2014 of 17 December 2014 on data reporting implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency (OJ L 363, 18.12.2014, p. 121).
(21) Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32).
(22)Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1).
(23)OJ L 302, 17.11.2009, p. 32.
(24)Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 ( OJ L 174, 1.7.2011, p. 1) .
(25) Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (OJ L 201, 27.7.2012, p. 1) .
(26)Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC ( OJ L 133, 22.5.2008, p. 66) .
(27) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 (OJ L 60, 28.2.2014, p. 34).
(28)Commission Regulation (EC) No 1287/2006 of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive ( OJ L 241, 2.9.2006, p. 1) .
(29) Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, p. 84).
(30)1.8.2014, ESMA/2014/937.


Financing for development
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European Parliament resolution of 19 May 2015 on Financing for Development (2015/2044(INI) )
P8_TA(2015)0196 A8-0143/2015

The European Parliament,

–   having regard to the outcome documents of the First and Second International Conferences on Financing for Development, notably the Monterrey Consensus of 2002 and the Doha Declaration of 2008,

–   having regard to the UN General Assembly resolutions 68/204 and 68/279 on the Third International Conference on Financing for Development, to be held in Addis Ababa (Ethiopia) from 13 to 16 July 2015,

–   having regard to the ‘Elements’ paper of 21 January 2015 presented by the Co-chairs of the Preparatory Process for the Third International Conference on Financing for Development,

–   having regard to the UN Secretary-General’s Synthesis Report of December 2014 on the Post-2015 Agenda, entitled ‘The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet’,

–   having regard to the report of August 2014 by the Intergovernmental Committee of Experts on Sustainable Development Financing,

–   having regard to the report of July 2014 by the UN Open Working Group on Sustainable Development Goals,

–   having regard to the document ‘UNCTAD’s World Investment Report 2014 – Investing in the SDGs: An Action Plan’(1) ,

–   having regard to the outcome document of the UN Conference on Sustainable Development (Rio+20) of June 2012, ‘The Future We Want’,

–   having regard to the UN General Assembly Resolution ‘Towards the establishment of a multilateral legal framework for sovereign debt restructurings’ of September 2014,

–   having regard to the Commission communication of 5 February 2015 entitled ‘A Global Partnership for Poverty Eradication and Sustainable Development after 2015’ (COM(2015)0044 )(2) ,

–   having regard to the Commission communication of 2 June 2014 entitled ‘A decent life for all: From vision to collective action’ (COM(2014)0335 )(3) ,

–   having regard to the Commission communication of 16 July 2013 entitled ‘Beyond 2015: towards a comprehensive and integrated approach to financing poverty eradication and sustainable development’ (COM(2013)0531 )(4) ,

–   having regard to the Commission communication of 27 February 2013 entitled ‘A decent life for all: Ending poverty and giving the world a sustainable future’ (COM(2013)0092 )(5) ,

–   having regard to the Foreign Affairs Council conclusions of 12 December 2013 on policy coherence for development,

–   having regard to the General Affairs Council conclusions of 16 December 2014 on a transformative post-2015 agenda(6) ,

–   having regard to the Foreign Affairs Council conclusions of 12 December 2013 on financing poverty eradication and sustainable development beyond 2015(7) ,

–   having regard to the Foreign Affairs Council conclusions of 12 December 2014 on a stronger role of the private sector in development cooperation,

–   having regard to the General Affairs Council conclusions of 25 June 2013 on the Overarching Post 2015 Agenda(8) ,

–   having regard to its resolution of 25 November 2014 on the EU and the global development framework after 2015(9) ,

–   having regard to its resolution of 23 September 2008 on the follow-up to the Monterrey Conference of 2002 on Financing for Development(10) ,

–   having regard to its resolutions of 26 November 2014 on the 2014 UN Climate Change Conference – COP 20 in Lima, Peru (1-12 December 2014)(11) ; of 26 February 2014 on promoting development through responsible business practices, including the role of extractive industries in developing countries(12) ; of 8 October 2013 on ‘Corruption in the public and private sectors: the impact on human rights in third countries’(13) ; of 21 May 2013 on ‘Fight against Tax Fraud, Tax Evasion and Tax Havens’(14) ; and of 16 April 2013 on advancing development through trade(15) ,

–   having regard to Decision No 472/2014/EU of the European Parliament and of the Council of 16 April 2014 on the European Year for Development (2015)(16) ,

–   having regard to Regulation (EU) No 233/2014 of the European Parliament and of the Council of 11 March 2014 establishing a financing instrument for development cooperation for the period 2014-2020,

–   having regard to Article 208 TFEU, which establishes eradication of poverty as the primary objective of EU development policy and the principle of policy coherence for development,

–   having regard to Rule 52 of its Rules of Procedure,

–   having regard to the report of the Committee on Development and the opinion of the Committee on Budgets (A8-0143/2015 ),

A.   whereas 2015 is a crucial year for global development efforts, with the adoption of the Sustainable Development Goals (SDGs) and an agreement on global climate action, both to be valid until 2030;

B.   whereas the Third International Conference on Financing for Development (FfD), which will be held in Addis Ababa, Ethiopia, from 13 to16 July 2015, must create the necessary conditions for financing and implementing the post-2015 agenda, and whereas the success of that agenda will be determined by the level of ambition demonstrated at the conference;

C.   whereas 1,5 billion people are still living in poverty with deprivation in health, education and living standards, notably in conflict-affected and fragile states; whereas this is not acceptable, given that sufficient resources exist in the world to progressively end this situation;

D.   whereas eradication of poverty and inequality can only be achieved through mobilisation of sufficient and appropriate resources for all, and the better targeting of marginalised groups, such as children, women, the elderly or persons with disabilities; whereas despite a significant reduction in extreme poverty, progress for children has been slower, making the need for investing in children – both through domestic resource mobilisation and international public financing – a key factor;

E.   whereas there can be no sustainable development without peace and security, as acknowledged by the 2005 European Consensus on Development;

F.   whereas three-quarters of the world’s poorest people – an estimated 960 million – currently live in middle-income countries, and a new development paradigm therefore requires programmes targeted both on poor people and on poor countries;

G.   whereas UNCTAD estimates the financing needs in developing countries for the emerging SDGs at about USD 3,9 trillion per year, with USD 2,5 trillion per year currently missing; whereas the costs of weak action will ultimately be much greater than the costs of decisive action for sustainable development;

H.   whereas the magnitude of the SDGs financing challenge demands a strong and global partnership and the use of all forms of financing (domestic, international, public, private and innovative sources) and non-financial means; whereas private financing can complement, but not substitute public funding;

I.   whereas domestic resource mobilisation and Official Development Assistance (ODA) are non-substitutable anchors of development finance which must be strengthened;

J.   whereas developing countries’ potentials for domestic resource mobilisation are significant, but there are limits in the current situation to what countries can accomplish on their own; whereas tax resources remain low as a proportion of GDP in most developing countries and it is thus essential to promote well-balanced, fair and efficient tax systems based on the ability to pay of individual taxpayers and companies; whereas domestic resource mobilisation also requires a fair and transparent distribution of the benefits of natural resources;

K.   whereas very few developed countries are fulfilling their commitment of providing 0,7 % of Gross National Income (GNI) as ODA, including 0,15-0,20 % of GNI to Least Developed Countries (LDCs); whereas the Member States which joined the EU in 2004 or later have committed to strive towards the target of 0,33 % of GNI, but none of them has yet reached this target;

L.   whereas many less developed countries are vulnerable, or have been made vulnerable, as a result of external events such as armed conflicts, epidemics such as Ebola, and natural disasters, and whereas they need greater support;

M.   whereas poverty reduction, economic growth and security depend to a large extent on the ability of a state to perform its sovereign functions to ensure the rule of law and to provide basic public services such as access to education and healthcare, while respecting the principle of ownership; whereas these countries need, in particular, greater support to introduce robust health systems;

N.   whereas the development agenda is becoming broader and it is therefore important to recognise and further incentivise the efforts that are being made above and beyond ODA; whereas despite challenging fiscal circumstances in many OECD countries, high levels of ODA were maintained and ODA reached an all-time high of USD 134,8 billion in 2013; whereas ODA can be a catalyst to attract private investment and the relevance of innovative financial instruments in this context should be noted;

O.   whereas the private sector and Foreign Direct Investment (FDI), when properly regulated and linked to concrete improvements in the domestic economy, have an important potential to contribute to the achievement of the SDGs, as reflected in UNCTAD’s proposal for an Action Plan for SDG investment;

P.   whereas private capital flow affects developing countries in many different ways, positive as well as negative; whereas financial flows to developing countries from private sources are significant but largely volatile, unevenly distributed and often associated with outflows such as profit repatriation, which since 2010, have exceeded new inflows of FDI;

Q.   whereas civil society plays a key role in ensuring a universal and inclusive process, at both national and global level, and contributes to good governance and accountability; whereas development assistance and corruption are mutually incompatible;

R.   whereas it is important to promote the use of banking services in developing countries;

S.   whereas the EU and its Member States, as the largest donors of development aid, must lead the FfD process and help bring about a credible response to the development finance challenges, ensuring policy coherence for development within the post-2015 agenda; whereas other developed and emerging countries should follow the EU’s example;

A global partnership

1.   Welcomes the Zero Draft of the Outcome Document of the Third Financing for Development Conference, and calls for the EU and its Member States to support it;

2.   Welcomes the UN Secretary-General’s Synthesis Report and its transformative, universal, holistic and integrated approach to an ambitious global partnership for new development goals and the associated financial framework, focused on poverty eradication, universality of human rights and gender equality; insists that without comprehensive and substantial means of implementation such an ambitious partnership will not be successful;

3.   Urges the EU to affirm its political leadership throughout the preparatory process towards the definition of a sustainable development framework, a renewed agreement on financing for development and other means of implementation, along the commitments and values stated in its founding Treaties; considers that the provision of EU development aid should not be conditioned by other partner donors;

4.   Insists that the EU and its Member States should maintain their position as major donors of development aid while pushing for shared responsibility; calls on high-income countries, upper middle-income countries and emerging economies to take on significant commitments;

5.   Welcomes the recent Commission communication entitled ‘A Global Partnership for Poverty Eradication and Sustainable Development after 2015’, for its comprehensiveness, for its policy coherence focus and for confirming that the EU is committed to playing its full part in this global partnership; however, regrets a certain lack of commitment regarding the timeline for future financial targets;

International public financing

6.   Stresses that ODA remains a key instrument for financing development; urges the EU and its Member States to re-commit without delay to the 0,7 % of GNI target for ODA, with 50 % of ODA and at least 0,2 % of GNI being reserved for LDCs, and to present, taking into account budgetary constraints, multiannual budget timetables for the scale-up to these levels by 2020; welcomes the EU’s firm stance on focusing efforts on the quantity and quality of development aid; calls on other developed partners and on emerging countries to scale up their development assistance, and on the Commission and the Member States to persuade public and private donors around the world to honour their financial promises and to make new commitments; stresses that all donors should ensure that ODA represents genuine transfers to developing countries;

7.   Stresses that the EU and other developed countries must honour their commitment to provide scaled-up, new and additional climate finance in order to reach by 2020 the goal of jointly mobilising USD 100 billion annually, from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources; deplores the lack of progress on the additionality of climate finance to ODA; calls for a joint international effort from developed and emerging countries to find new and additional climate finance for developing countries – though not at the expense of the development budget – in the agreement on Global Climate Action to be concluded at the Paris Conference to be held in December 2015; considers that the EU should propose intermediate steps on the path to full additionality; urges Member States to use revenues raised through carbon markets for climate action in developing countries; also calls on emerging economies to mobilise climate finance for developing countries;

8.   Supports innovative sources for additional development and climate finance, including financial transaction taxes, carbon taxes on international aviation and maritime transport, and automatic allocation of carbon market revenues; welcomes further European and international efforts to identify further additional sources;

9.   Emphasises that ODA should remain the standard measure of financial efforts made; supports the introduction of a complementary total official support for sustainable development (TOSSD) indicator provided it is made fully clear that this shall not in any way replace or reduce the importance of the ODA measure;

10.   Notes that while most ODA is provided in the form of grants, concessional loans are also important but add to debt burdens and risk leading to a debt bubble, notably in sub-Saharan African and Caribbean countries which have limited revenues to service debt; calls, accordingly, on donors to give aid to LDCs in the form of grants; considers that concessional loans might not be suitable for investments in social sectors where profit generation is not sought; welcomes the agreement by the OECD Development Assistance Committee (OECD-DAC) to modernise the reporting of concessional loans by introducing a grant equivalent system for the purpose of calculating ODA figures;

11.   Points out that the EU is the world’s leading donor of development aid, accounting for almost 60 % of global official development aid; calls, nevertheless, on the Commission to provide clear and transparent data on the share of the overall budget dedicated to EU development aid so as to be able to assess the follow-up to the Monterrey Consensus by all European donors; also expresses its regret that the level of EU financial contributions to developing countries lacks visibility, and invites the Commission to develop appropriate and targeted communication and information tools to increase the visibility of EU development aid;

12.   Calls on the EU to take account of long-term financial requirements by favouring and leading a more strategic, ambitious and universal approach in line with the SDGs;

13.   Recalls the EU budget’s contribution to financing for development, with EUR 19,7 billion for development cooperation and EUR 6,8 billion for humanitarian aid between 2014 and 2020, in addition to the EUR 2,2 billion emergency aid reserve; also points to the EUR 30,5 billion European Development Fund (EDF); advocates the budgetisation of the EDF, which would bring advantages such as increased transparency, visibility, efficiency and efficacy; welcomes the opportunity provided by the post-electoral mid-term review and the revision of the multiannual financial framework to take into account the increasing structural needs of humanitarian relief and the development needs of the poorest and most fragile countries;

14.   Notes that the 2015 budget dedicates EUR 2,4 billion in commitments (EUR 2,1 billion in payments) to development cooperation and EUR 928,8 million in commitments (EUR 918,8 million in payments) to humanitarian aid; supports the steps taken to reduce the backlog of unpaid bills, notably with a view to maintaining the financial viability of the most vulnerable partners, and stresses the importance of the principle of parity between commitments and payments with regard to humanitarian aid, as crises are happening more frequently and funds need to be disbursed quickly;

15.   Calls on the EU to ensure that negotiations on the post-2015 global development agenda, financing for development and climate change have credible links with the new Sendai Framework for Disaster Risk Reduction 2015-2030 in order to build resilience and preparedness while achieving the global goal of leaving no one behind;

16.   Recalls that development cooperation is a shared responsibility of the EU and its Member States and that it needs to be consistent with the concepts of complementarity and coordination; highlights the need to involve civil society and local authorities in the coordination process;

17.   Calls on the EU and its Member States to promote an aid effectiveness agenda building on the commitments in the Busan Partnership for Effective Development Cooperation, reduction of aid fragmentation through pooled funding mechanism, and greater coordination between different aid delivery mechanisms and stakeholders; stresses that all development finance should be pro-poor, gender-sensitive, environmentally sound and climate-proof;

18.   Recalls that according to the TFEU the reduction and eventual eradication of poverty is the EU’s primary objective in the development field, while the defence of human rights, gender equality, social cohesion and the fight against inequalities should remain at the core of development activities;

19.   Emphasises the importance of setting clear priorities for expenditure, with a special focus on measures in the areas of health, education, energy, water supply and infrastructure; underlines the need for further efforts and improvements to be made in the area of aid effectiveness through a higher degree of coordination between the different aid mechanisms and donors;

20.   Underlines that ODA should prioritise basic social services for all and ‘public goods’ that are less effectively provided by the private sector, such as primary education, social safety nets, health care and infrastructure for sanitation, water supply and energy, so that developing countries can reach their full potential; stresses that accessibility should be a key criterion in international public financing to promote universal and inclusive services and infrastructures;

21.   Stresses the need to ensure that the most vulnerable populations have access to development opportunities; recalls, in this respect, that channelling assistance only through governments risks resulting in insufficient funding for marginalised or vulnerable communities;

22.   Highlights the importance of development banks mobilising additional funds for reducing the gap in infrastructure funding and access to credit in developing countries with monitoring and impact assessment mechanisms;

23.   Underlines the absolute need for the EU to aim for the highest level of coordination in order to achieve coherence with other policy areas (environment, migration, international trade, human rights, agriculture, etc.) and to avoid duplication of work and inconsistencies in activities; recalls that, with the Lisbon Treaty (Article 208 TFEU), policy coherence for development became a treaty obligation;

Domestic resource mobilisation and international tax cooperation

24.   Stresses that domestic resource mobilisation is more predictable and sustainable than foreign assistance and must be a key source of financing; encourages efforts by developing countries to increase such mobilisation; emphasises the importance of improved collection of domestic taxes in developing countries and the need for robust, well-balanced, fair and efficient tax systems that are pro-poor, sensitive to the most vulnerable groups and respectful of international sustainable development commitments; calls for the removal of harmful subsidies in the areas of energy (in particular fossil fuels), fisheries and agriculture;

25.   Asks the Commission to enhance its capacity-building assistance in the areas of tax administration, financial governance, public financial management, anti-corruption, the recovery of stolen assets and the fight against tax evasion and transfer mispricing; believes that the Union has a key role to play in this; recalls the importance of distribution of tax revenues from natural resources, especially through the creation of sovereign wealth funds; stresses the need to accelerate and scale up ongoing efforts to improve budgetary reporting, and calls for increased harmonisation of budgetary reporting practices across countries;

26.   Calls on the EU and its Member States to actively crack down on tax havens, tax evasion and illicit financial flows, which dwarf development assistance and contribute to developing countries’ debts, to cooperate with developing countries in counteracting aggressive tax avoidance practices by certain transnational companies, and to seek ways to help developing countries withstand pressures to engage in tax competition, since this undermines the mobilisation of domestic resources for development;

27.   Supports the setting-up of an intergovernmental body for tax cooperation under the auspices of the UN; encourages the automatic exchange of information; calls for the creation of public registers of beneficial ownership and mandatory country-by-country reporting for transnational companies in all sectors and for ensuring a fair distribution of taxing rights while negotiating tax and investment treaties with developing countries;

28.   Considers that international corporate tax rules should include the principle that taxes should be paid where value is extracted or created;

29.   Stresses the decisive importance of good governance, human rights protection, the rule of law, institutional framework and regulatory instruments; especially supports investment in capacity-building, basic social services such as education and health (ensuring universal health coverage), including sexual and reproductive health and rights, nutrition, public services and social protection and the fight against poverty and inequality, including among children and in terms of gender; recognises the need for accessible infrastructures and selective public investments, as well as the sustainable use of natural resources, including by the extractive industries;

30.   Stresses that financing for development must strengthen the resources available to promote equality between women and men, women’s rights and women’s empowerment; emphasises the specific role of women in society, and stresses that this should include the implementation of gender budgeting, targeted investments in key sectors such as health and education and steps to ensure that all development finance takes full account of the situation of women and girls;

31.   Calls for greater financing of research and development in science, technology and innovation in developing countries, while recognising that this financing should be both domestic and international; urges the promotion of research and development that can advance progress in tackling complex challenges and towards good management of global public goods, such as technology and innovation for health; notes the important role of micro, small and medium enterprises (MSMEs) in this context; calls for a review of intellectual property rights regimes introduced in developing countries through free trade agreements in order to identify any adverse impacts on public health, the environment or technology transfer;

Private sector and civil society

32.   Underlines the high importance of establishing favourable conditions for private enterprise and entrepreneurship in developing countries, especially for MSMEs, as they play a fundamental role as an engine for job creation and inclusive growth; calls in particular for further strengthening microfinance loan and guarantee systems; insists on the necessity of further developing local and regional banks and credit unions in order to significantly decrease excessive interest rates for market loans so as to better support community development at a local level(17) ; calls for alignment of the private sector with the SDGs through appropriate partnerships, financial instruments, incentives, an accountability framework and effective Corporate Social Responsibility (CSR); recalls the need to comply with agreed international standards such as the International Labour Organisation (ILO) standards and the UN Guiding Principles on Business and Human Rights;

33.   Stresses the need to promote the provision to undertakings of instruments for information, training and advice platforms essential to their development;

34.   Stresses that, in order to impart long-term impetus to the economy, it is essential to give young people and women access to credit to support start-ups;

35.   Stresses the social cohesion role played by the collective entrepreneurship of producers’ associations in preventing ethnic and religious conflict;

36.   Insists that the EU’s support for and cooperation with the private sector can and must contribute to reducing poverty and inequality and respect and promote human rights, environmental standards, climate commitments and social dialogue; calls for the establishment of a legally binding framework for companies, including transnational corporations with a grievance mechanism;

37.   Calls for the EU to set up, together with developing countries, a regulatory framework, in line with UNCTAD’s comprehensive Investment Policy Framework for Sustainable Development, that stimulates more responsible, transparent and accountable investment, contributing to the development of a socially conscious private sector in developing countries;

38.   Calls on the Commission to support increased access to finance for MSMEs and cooperatives in developing countries; underlines the importance of microfinance loan systems, especially for women; encourages further developing local and regional banks and credit unions; asks the Commission to encourage developing countries in setting up policies and legal frameworks conducive to the development of banking services; points to the need - at various levels, including among poor people, women and other vulnerable groups - for information and training on financial matters, the use of banking products and insurance, and relevant new technologies;

39.   Recalls that public aid alone is far from sufficient to cover all investment needs in developing countries; therefore insists on the leverage role of blending and public-private partnerships (PPPs) as a means to enhance the impact of development assistance, to attract private finance and to support local businesses; stresses, however, that blended finance must not replace state responsibility for delivering on social needs and should be aligned with national development objectives and with development effectiveness principles; encourages PPPs in particular in the field of research related to the Innovative Medicines Initiative such as the Ebola+ programme;

40.   Calls for the adoption of international standards and criteria and debt risk analysis for blending projects and PPPs that attract private finance and support local businesses, while respecting agreed ILO, WHO and international human rights standards; urges the Commission, in view of its wish to considerably extend the use of blending in the future, to implement the recommendations made in the European Court of Auditors Special Report on the use of blending, and to evaluate the mechanism of blending loans and grants, particularly in terms of development and financial additionality, transparency and accountability; calls on the EIB and other development finance institutions to prioritise investment in companies and funds that publicly disclose beneficial ownerships and apply country-by-country reporting;

41.   Supports increased market access for developing countries, especially LDCs, as it can strengthen the private sector and create incentives for reform; urges the Commission to ensure that trade and investment agreements, especially with developing countries, LDCs and fragile states, are aligned with the SDGs and promote human rights and regional integration; emphasises that such agreements should be subjected to SDG impact assessments; supports the Commission’s suggestion of updating its Aid for Trade Strategy in light of the outcomes of the post-2015 negotiations and to grant special and differential treatment to developing countries, LDCs and fragile states in trade agreements while respecting their policy space to take sovereign decisions in accordance with their national context and their populations’ needs;

42.   Calls for action to boost the use and transparency of national public procurement systems in activities managed by the public sector and for the strengthening of competition authorities in developing countries;

43.   Highlights the positive contribution of migrants to the development of their countries of origin, and calls for more effective and innovative cooperation in migration policy between origin and destination countries; draws attention to the significant and growing financial flows represented by remittances from the diaspora and supports the creation of diaspora funds; calls for further efforts to bring down transfer costs to increase the impact on local development in origin countries;

44.   Calls for increased participation of local authorities and civil society, including community-based NGOs, in discussions on development priorities, notably at the Addis Ababa conference, and for a more inclusive and accountable implementation of the post-2015 agenda; underlines the role of NGOs in the implementation of operations on the ground and the development of accountability, monitoring and review mechanisms; recognises that the role of local authorities in the implementation of the SDGs requires the allocation of the necessary means; calls for increased consultation of young people in the discussions on the post-2015 agenda, namely through innovative communication technologies; underlines the role of EU delegations as facilitators of such dialogues;

Global governance

45.   Recalls the UN’s central role, in complementarity with other existing institutions and forums such as the OECD, in global economic governance and development; calls for equal and gender-balanced representation of all countries in multilateral institutions and other norm- and standard-setting bodies, including in international financial institutions; recalls that all international financial institutions should abide by basic transparency standards - as set out in the Transparency Charter for International Financial Institutions - and enact public disclosure policies;

46.   Insists that sustainable debt solutions, including standards for responsible lending and borrowing, must be facilitated through a multilateral legal framework for sovereign debt restructuring processes, with a view to alleviating the debt burden and avoiding unsustainable debt; asks the EU to engage constructively in the UN negotiations on this framework; urges the EU to push for the implementation of the UNCTAD principles of responsible sovereign debt transactions for both borrowers and lenders;

47.   Welcomes the international efforts to relieve the international debt obligations of Ebola-affected countries in order to help them face the economic crises caused by the epidemic;

48.   Calls for a review of international organisations’ programmes and instruments of financial assistance for development in order to align them with the new SDGs; urges notably, the European Investment Bank, the European Bank for Reconstruction and Development, the International Monetary Fund and the World Bank to establish the highest standards of responsible financing and to gear their resources more closely to the needs of developing countries, including through mutually effective pro-poor lending facilities; calls notably for an increase in the amounts available to the European Investment Bank, beyond its current mandate, in order to further increase its funding to low-income countries;

Monitoring, accountability and review

49.   Calls for an agreement at the Addis Ababa conference on a robust, transparent and accessible monitoring and accountability framework for effective tracking and follow-up of investment and progress as regards specific commitments and objectives; calls for an international initiative to improve the quality of statistics, data and information, including data disaggregated by income, gender, age, race, ethnicity and migratory status, disability, geographic location and other characteristics relevant in national contexts; asks all parties to ensure the transparent and efficient implementation of aid and financing, in particular by signing and effectively implementing the provisions of the UN Convention against Corruption and by committing to systematically publishing accurate, timely and comparable revenue and expenditure data as well as budget documents; notably, asks the Commission to further monitor and control its financing of aid programmes and projects and to take the appropriate measures in case of evidence of corruption and mismanagement; urges the Commission, equally, to upgrade its assistance in order to strengthen the judiciary and anti-corruption agencies in developing countries;

50.   Calls for an international initiative to improve the quality of statistics, data and information in order to track spending, investment and progress on specific commitments and objectives; welcomes global efforts to ensure that data used in the implementation of the SDGs are sufficiently disaggregated for income, gender, age and other indicators, so that the impact of the policies can be effectively monitored;

51.   Reiterates that, as a complement to GDP, a new set of other indicators is necessary in order to take account of new social and environmental challenges, and that this set should include in particular the Human Development Index, the Gini coefficient, a gender equality measure, the carbon footprint and the ecological footprint;

o
o   o

52.   Instructs its President to forward this resolution to the Council, the Commission, the Vice-President of the European Commission/High Representative of the European Union for Foreign Affairs and Security Policy, the Secretary-General of the United Nations, and the Co-Facilitators for the preparatory process of the Third International Conference on Financing for Development.

(1) http://unctad.org/en/publicationslibrary/wir2014_en.pdf
(2) http://ec.europa.eu/europeaid/sites/devco/files/com-2015-44-final-5-2-2015_en.pdf
(3) http://ec.europa.eu/europeaid/sites/devco/files/part1-a-decent-life-for-all.pdf
(4) http://ec.europa.eu/transparency/regdoc/rep/1/2013/EN/1-2013-531-EN-F1-1.Pdf
(5) http://ec.europa.eu/europeaid/documents/2013-02-22_communication_a_decent_life_for_all_post_2015_en.pdf
(6) http://eu-un.europa.eu/articles/en/article_15873_en.htm
(7) http://eu-un.europa.eu/articles/en/article_14363_en.htm
(8) http://eu-un.europa.eu/articles/en/article_13692_en.htm
(9) Texts adopted, P8_TA(2014)0059 .
(10) OJ C 8 E, 14.1.2010, p. 1.
(11) Texts adopted, P8_TA(2014)0063 .
(12) Texts adopted, P7_TA(2014)0163 .
(13) Texts adopted, P7_TA(2013)0394 .
(14) Texts adopted, P7_TA(2013)0205 .
(15) Texts adopted, P7_TA(2013)0119 .
(16) OJ L 136, 9.5.2014, p. 1.
(17) Report on Support for SMEs in Developing Countries Through Financial Intermediaries, Dalberg, November 2011, www.eib.org.


Safer healthcare in Europe
PDF 415k   DOC 126k
European Parliament resolution of 19 May 2015 on safer healthcare in Europe: improving patient safety and fighting antimicrobial resistance (2014/2207(INI) )
P8_TA(2015)0197 A8-0142/2015

The European Parliament,

–   having regard to its position of 23 April 2009 on the proposal for a Council recommendation on patient safety, including the prevention and control of healthcare-associated infections(1) ,

–   having regard to the Council recommendation of 9 June 2009 on patient safety, including the prevention and control of healthcare-associated infections(2) ,

–   having regard to Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border healthcare,

–   having regard to the Commission communication of 15 November 2011 entitled ‘Action plan against the rising threats from Antimicrobial Resistance’ (COM(2011)0748 ),

–   having regard to the Council conclusions of 22 June 2012 on ‘The impact of antimicrobial resistance in the human health sector and in the veterinary sector – a “One Health” perspective’,

–   having regard to its resolution of 11 December 2012 on ‘The Microbial Challenge – Rising threats from Antimicrobial Resistance’(3) ,

–   having regard to the reports of 13 November 2012 and 19 June 2014 from the Commission to the Council on the basis of Member States’ reports on the implementation of the Council recommendation (2009/C 151/01) on patient safety, including the prevention and control of healthcare-associated infections (COM(2012)0658 and COM(2014)0371 ),

–   having regard to its resolution of 22 October 2013 on the report from the Commission to the Council on the basis of Member States’ reports on the implementation of the Council Recommendation (2009/C 151/01) on patient safety, including the prevention and control of healthcare-associated infections(4) ,

–   having regard to Decision No 1082/2013/EU of the European Parliament and the Council of 22 October 2013 on serious cross-border threats to health,

–   having regard to the Special Eurobarometer 411, ‘Patient safety and quality of care’,

–   having regard to the Progress report on the Action plan against the rising threats from Antimicrobial Resistance (SANTE/10251/2015),

–   having regard to the proposal, of 10 September 2014, for a Regulation of the European Parliament and of the Council on veterinary medicinal products (2014/0257(COD) ),

–   having regard to the ‘Conceptual framework for the international classification for patient safety’ drawn up by the World Health Organisation (WHO),

–   having regard to the Latvian Presidency’s efforts in addressing the issue of antimicrobial resistance, in particular with regard to tuberculosis and multi-drug resistant tuberculosis (MDR-TB),

–   having regard to the Council conclusions of l December 2014 on patient safety and quality of care, including the prevention and control of healthcare- associated infections and microbial resistance,

–   having regard to the first ECDC/EFSA/EMA joint report on the integrated analysis of the consumption of antimicrobial agents and occurrence of antimicrobial resistance in bacteria from humans and food-producing animals (Joint Interagency Antimicrobial Consumption and Resistance Analysis – JIACRA),

–   having regard to Rule 52 of its Rules of Procedure,

–   having regard to the report of the Committee on the Environment, Public Health and Food Safety (A8-0142/2015 ),

A.   whereas the key to overall healthcare quality lies in patient safety, the essential elements of which are a healthcare culture and the management of adverse events;

B.   whereas the volume of data available on the prevalence and incidence of adverse events in Member State healthcare systems is at present limited, but is steadily growing, and whereas the latest available data date back to 2008;

C.   whereas it is estimated that between 8 % and 12 % of patients admitted to hospitals in the EU suffer from adverse events while receiving healthcare, and whereas nearly half of these events could be avoided;

D.   whereas the most common healthcare-related adverse events are healthcare-associated infections (HAIs), medication-related events and complications arising during or after surgical operations;

E.   whereas patient safety and the quality of healthcare require decent working conditions and safety at work for healthcare professionals, and whereas, in particular, ensuring patient safety, prevention and control of HAIs and prevention of the spread of multidrug-resistant bacteria is very difficult in overcrowded and understaffed healthcare environments;

F.   whereas the current economic crisis has placed increased pressure on Member State healthcare budgets, hence having an impact on patient safety, as many Member States, instead of properly addressing efficiency, have reduced budgets and staffing levels in their healthcare systems with rather harsh cuts;

G.   whereas the economic crisis has further deepened existing inequalities with regard to access to health services;

H.   whereas continuous training of doctors and other healthcare professionals is crucial to avoid adverse events, including adverse drug events (ADEs), which are estimated to cost the EU healthcare systems some EUR 2,7 billion per year in care expenses and account for 1,1 % of all hospitalisations in the Union;

I.   whereas patient-centred electronic health (e-Health) and home-care medical treatments have a high potential for improving the quality and efficiency of medical treatments while contributing to better healthcare performance;

J.   whereas a multidisciplinary approach increases the chances of positive outcomes of medical treatments;

K.   whereas patients, families and patient organisations play a key role in advocating for safer care, and their role should be promoted through patient empowerment and participation in the healthcare process and policy at all levels;

L.   whereas home-care medical treatments can help patients psychologically and result in better healthcare performance;

M.   whereas it has been noted that less-informed people use antibiotics more frequently, while full knowledge of antibiotics could encourage people to consume them more responsibly;

N.   whereas 30 to 50 % of patients do not take the medicines prescribed for them by doctors or do not take them as directed by the doctor’s prescription;

O.   whereas conflicts of interest related to the pharmaceutical industry exist in hospitals and among general practitioners and also veterinarians;

P.   whereas HAIs are a major public health problem in the Member States (according to figures compiled by the European Centre for Disease Prevention and Control (ECDC), 1 in 20 hospital in-patients on average suffer from an HAI in the EU, that is to say, 4,1 million patients annually, and every year 37 000 people in the EU die as a result of an HAI, although 20 to 30 % of those infections are considered to be preventable by intensive hygiene and control programmes), and this places a heavy burden on limited health service budgets;

Q.   whereas patients’ experiences and inputs often differ from those of health professionals and can be of great value in finding new ways to reduce and prevent HAIs;

R.   whereas HAIs caused by multidrug resistant bacteria are increasing;

S.   whereas antimicrobial resistance has increased worldwide for bacterial pathogens, leading to increasing prevalence of HAIs and treatment failures in human and animal infectious diseases at national, European and international levels;

T.   whereas it is estimated that globally 10 million people will die every year because of antimicrobial resistance by 2050;

U.   whereas resistance to antibiotics that are commonly used to treat causative bacteria is at least 25 % or more in several Member States; whereas there is a growing gap between antimicrobial resistance and the development of new antibiotics and their introduction into clinical practice, and this is linked to scientific, regulatory and economic challenges;

V.   whereas the most recent studies show that, allowing for a few exceptions, antimicrobial resistance in hospitals has globally increased in the EU in recent years;

W.   whereas the EU estimates that every year at least 25 000 people die of infections caused by resistant bacteria, costing public health systems an estimated EUR 1,5 billion, according to data from 2011 collected by the ECDC;

X.   whereas the costs incurred by drug-resistant infections amount to an estimated EUR 1,5 billion annually, because of increases in healthcare expenditure costs and productivity losses; whereas patients who have caught resistant bacteria have to be isolated when treated in hospital, and this extra provision costs EUR 900 million and leads to 2,5 million extra bed days per year;

Y.   whereas one of the main causes of the spread of antimicrobial resistance in hospitals is lack of compliance with generally accepted infection prevention and control practices;

Z.   whereas first line drugs’ effectiveness on bacterial pathogens is becoming increasingly limited by resistance and second or third line drugs are not always available and are often more toxic, more expensive and less effective than first line drugs;

AA.   whereas one of the main causes of antimicrobial resistance is the misuse of antimicrobials, including antibiotics, and in particular their systematic and excessive use;

AB.   whereas the high level of mobility between European healthcare systems and the increasingly cross-border nature of healthcare in Europe can promote the spread of resistant micro-organisms from one Member State to another;

AC.   whereas vaccination programmes are one effective tool in efforts to combat antibiotic resistance, because they can play a role in limiting the use of antibiotics and thereby the development of antimicrobial resistance;

AD.   whereas antibacterial research and development presents some unique challenges meaning that a long-term perspective is needed to develop the expertise and apply it in laboratories, and whereas it is regrettable that many researchers having such expertise have moved to other areas due to a lack of both private and public funding;

AE.   whereas the failure to take basic personal hygiene precautions, both inside and outside hospitals, can cause pathogens – in particular antimicrobial-resistant ones – to spread;

AF.   whereas increasing scientific evidence shows that good hand hygiene in healthcare settings requires the use of methods to dry hands that do not facilitate microbial cross-contamination via airborne dissemination and aerosolisation;

AG.   whereas resistant bacteria can be found on medical devices even when the latter have been sterilised in accordance with the manufacturer’s instructions;

AH.   whereas the use of antimicrobials in human and veterinary medicine contributes to a development of resistome in the environment which may serve as a source of resistance development in both humans and animals; whereas the same classes of antibiotics are used in both animal and human medicine and similar resistance mechanisms have emerged in both sectors;

AI.   whereas high-density farming may imply that antibiotics are improperly and routinely fed to livestock, poultry and fish on farms to promote faster growth and are also widely used for prophylaxis purposes, to prevent disease spreading owing to the cramped, confined and stressful conditions in which the animals are kept and which inhibit their immune systems, and to compensate for the unsanitary conditions in which they are raised;

AJ.   whereas the One Health concept, endorsed by the World Health Organisation (WHO) and the World Organisation for Animal Health (OIE), recognises that human health, animal health and ecosystems are interconnected; whereas, in particular, animals and animal-derived food can serve as a direct main source of resistant zoonotic pathogens; whereas, therefore the use of antibiotics in animals, particularly those intended for consumption and kept in high-density farming, can affect antibiotic resistance in humans;

AK.   whereas, in the light of the One Health concept, an approach whereby both human and veterinary medical professionals undertake initiatives to prevent resistant infections and reduce the use of antibiotics can prevent HAIs, both inside and outside hospitals;

AL.   whereas, according to the WHO, antimicrobials are used much more in livestock than they are in human beings in a number of EU Member States(5) ;

AM.   whereas, according to European consumer associations, over 70 % of meat products tested in six EU Member States were found to be contaminated with antibiotic-resistant bacteria, while in a further eight such bacteria were present in 50 % of all samples(6) ;

AN.   whereas high levels of Campylobacter resistance to fluoroquinolones have been observed and most human Campylobacter infections come from the handling, preparation and consumption of chicken; whereas such high levels of resistance reduce the effective treatment options for human Campylobacter infections;

AO.   whereas in the EU the sub-therapeutic use of antibiotics, which involves low doses of antibiotics being fed to livestock to promote their growth, has been banned since 2006;

AP.   whereas the vast majority of medicated feed for farmed animals contains antimicrobials;

AQ.   whereas the use of antimicrobials in pets is an additional risk factor for the development and transmission of antimicrobial resistance in human beings, and whereas the upward trends in antibiotic resistance encountered at veterinary clinics for pets run parallel to similar trends at hospitals;

AR.   whereas the risk of transmission of antimicrobial resistance from pets to human beings cannot be fully quantified, and whereas further research into this is needed;

AS.   whereas it is acknowledged that the current legislation on veterinary medicines does not provide sufficient tools to ensure that risks to human health arising from the use of antimicrobials in animals are adequately managed;

AT.   whereas the issue of off-label use of antibiotics is a concern for animal medicine as well as human medicine;

AU.   whereas pharmaceutical companies tend to add new antibiotics within existing classes of antibiotics rather than discover and develop truly new antibacterial agents, and as a result, resistance to these new agents will emerge faster than for drugs with a truly new mechanism of action;

AV.   whereas it is necessary to encourage pharmaceutical laboratories to develop new antibiotics by giving thought to the creation of incentives and alternative economic models to reward innovation;

AW.  whereas it is of paramount importance to encourage pharmaceutical companies to invest and to continue investing in the development of new antimicrobial agents, in particular those active against diseases for which antimicrobial resistance is a serious concern, in particular:

   diseases caused by prevalent multidrug-resistant Gram-negative bacteria (such as K. pneumoniae and Acinetobacter or E. coli ), or by other multidrug-resistant bacteria like Staphylococcus aureus or tuberculosis;
   other diseases caused by viruses (such as HIV), or by parasites (such as malaria);

as well as developing other methods to fight HAIs without using antibiotics;

AX.   whereas this can be achieved by addressing some of the key scientific, regulatory and economic challenges that have hampered the development of antimicrobials, and in particular by incentivising investment in research and development and focusing it on the greatest public health needs, while preserving the sustainability of national health systems;

AY.   whereas paragraph 2 of Article 4 of Directive 2001/18/EC sets a deadline for the use of genes conferring antibiotic resistance to transgenic plants;

AZ.   whereas product specialists should never perform therapeutic treatments, but should only support medical staff when and if required by the latter, for example to perform operations of assembling or disassembling specific instruments;

BA.   whereas the provisions of Directive 2011/24/EU on patient mobility are being implemented throughout the EU, making it more pertinent that European patients should be informed on patient safety in the various Member States;

BB.   whereas it is vital to ensure patients’ rights and public confidence in health services, by ensuring that Member States have systems in place to provide fair financial compensation in the case of negligence arising from faulty medical provision;

BC.   whereas the internet is the biggest unregulated pharmaceuticals market in the world; whereas 62 % of pharmaceuticals bought online prove to be fake or non-compliant with standards; whereas a very large proportion of operators operating online do so illegally and the annual global turnover from the illegal online sale of prescription medicines is estimated at around USD 200 billion;

BD.   whereas Article 168 of the Treaty on the Functioning of the European Union stipulates that Union action must complement national policies and must be directed towards improving public health, preventing physical and mental illness and diseases, and obviating sources of danger to physical and mental health;

Implementation of the Council’s recommendations on patient safety

Feedback on the Commission’s second implementation report

1.   Recalls that the EU pharmaceutical legislation was put in place to protect patient safety; recalls its above-mentioned resolution of 22 October 2013 on the report from the Commission to the Council on the basis of Member States’ reports on the implementation on the Council Recommendation (2009/C 151/01) on patient safety, including the prevention and control of healthcare-associated infections;

2.   Welcomes the improvement of the HAI surveillance system in the EU and the other recent measures put in place by certain Member States to improve general patient safety and reduce the incidence of HAIs, and more particularly the progress made by Member States in developing patient safety strategies and programmes, including patient safety in health legislation, and in developing reporting and learning systems;

3.   Notes, however, that the second implementation report still shows uneven progress among Member States on patient safety, and regrets the fact that some Member States have obviously slowed down implementation of the Council recommendations among others, possibly as a consequence of financial constraints resulting from the economic crisis;

4.   Regrets that austerity measures have seen a reduction in the level of cleaning staff in hospitals and other healthcare settings across Europe, given the critical role cleaning staff have in ensuring high levels of hygiene;

5.   Calls on Member States to make sure, in this period of economic crisis, that patient safety is not affected by austerity measures and that healthcare systems remain adequately funded and, in particular, to avoid the most damaging of measures, such as short-term savings, which would lead to high costs in the medium to long term, and instead to concentrate on the further development of high-quality and high-efficiency healthcare systems; calls on Member States to ensure that there are a sufficient number of healthcare professionals trained or specialised in infection prevention and control, as well as hospital hygiene, with a view to a more patient-centred approach;

6.   Calls on Member States to set specific and ambitious quantitative targets for reducing the use of antibiotics;

7.   Welcomes the work of the EU Working Group on Patient Safety and Quality of Care, which brings together representatives from all 28 EU Member States, EFTA countries, international organisations and EU bodies, and assists in developing the EU’s patient safety and quality agenda;

8.   Calls on the Commission to continue monitoring the implementation of the provisions on patient safety in the Member States, and where necessary to develop new guidelines accordingly;

Leads for improvements

9.   Welcomes the work cofinanced by the EU and performed by the OECD on comparable indicators to assess patient safety; calls on the Member States to implement such indicators with a view to assessing patient safety;

10.   Notes the importance of including patient safety in the education, on-the-job-training and continuing training of healthcare workers and health professionals in all Member States;

11.   Highlights the potential benefits of eHealth in reducing adverse events by tracking information flows and improving the understanding of medical processes, as well as through digital prescriptions and alerts on drug interaction; calls on the Commission and the Member States to further explore the possibilities offered by eHealth in the area of patient safety, including the introduction of electronic patient records, and to step up the level of cooperation so as to share their experiences, knowledge and good practices in this sector;

12.   Calls on the Commission and the Member States to assess the potential of mobile health (mhealth) in relation to efficiency of care, incidence of hospitalisation and the reduction of annual per capita healthcare costs;

13.   Notes that the use of antibiotics and the prevalence of antimicrobial resistance vary widely between Member States, and encourages Member States to apply best practices;

14.   Underlines the urgent need to promote veterinary research and innovation at EU and national level;

15.  Urges the Member States to implement or develop the following measures:

   (a) continue their efforts to improve patient safety by taking the necessary measures in order to fully implement the Council’s recommendations;
   (b) regularly collect data, in accordance with standardised surveys, on the prevalence and incidence of adverse events in their own territory, and enhance early warning alert systems and coordinate exchanges of these data effectively;
   (c) ensure that health managers are appointed on the basis of merit and not of political affiliation;
   (d) ensure the continuous improvement and ongoing evaluation of working conditions for healthcare professionals with a view to improving patient safety;
   (e) ensure basic training of all healthcare personnel, even those who are not in direct contact with patients, in infection prevention and control before they start working in a hospital or other healthcare facility, and regularly afterwards;
   (f) ensure the appropriate and up-to-date training of doctors and other healthcare professionals, as well as the exchange of best practices, in order to keep pace with the latest technology in place and best hospital hygiene practices, and set up monitoring systems to verify that their competences are up-to-date, especially regarding the implementation of the WHO Surgical Safety Checklist; this would reduce the prevalence of medical errors (including HAIs) caused by partial knowledge and failure to keep up with new technological advances;
   (g) ensure the adoption of a multidisciplinary approach in medical treatments;
   (h) ensure better coherence and continuity in patients’ progress through the system, focusing on transition between sectors and the transmission of information, for example from the hospital to the primary care sector;
   (i) lighten the burden on healthcare facilities by promoting care and medical treatment at home;
   (j) ensure that medical professionals inform patients when a medicine is used off-label and provide patients with information on the potential risks in order to enable them to give informed consent;
   (k) exchange among themselves information on the best approach with regard to combating antibiotic resistance in order to implement the most effective approach throughout Europe;
   (l) ensure equal access to health services and medical treatment for patients in order to combat existing health inequalities;
   (m) promote information campaigns for patients concerning the risks of adverse events in the healthcare system and concerning possible preventive measures, starting with basic hygiene measures, and launch awareness-raising campaigns and health education courses in schools concerning the rational use not only of antibiotics but of all pharmaceuticals and the risks entailed by the rise of antibiotic resistance; these campaigns should address parents and carers responsible for young children as well as for elderly people, and should be followed by an assessment of their outcomes;
   (n) emphasise the importance of prevention of HAIs in healthcare settings by means of containment of spread through patient and contact screening as well as infection control measures, and continue promoting good hygiene practices (like hand-washing);
   (o) step up hygiene precautions, making greater use of hygiene specialists to monitor all aspects of health and hygiene relating to healthcare facilities, patients and relations between patients and outside ‘guests’;
   (p) actively and formally involve patients’ organisations and representatives at all stages and levels of policies and programme development;
   (q) develop EU guidance for patients’ involvement in patient safety strategies and actions in collaboration with stakeholders, particularly patient organisations;
   (r) provide them with appropriate support to carry out patient safety activities;

16.   Calls on Member States to investigate possible malpractice involved in the refurbishment and re-use of medical devices originally designed and labelled for single use;

17.   Urges Member States to improve awareness programmes for medical professionals, other healthcare workers, veterinary practitioners and the general public focusing on antibiotic use and prevention of infections;

18.   Calls on the European Medicines Agency (EMA) to develop guidelines on the off-label/unlicensed use of medicines based on medical need, as well as to compile a list of off-label medicines in use despite licensed alternatives;

19.   Calls on the Commission and the ECDC to develop guidelines for healthcare professionals, patients and their families on effective hand washing and drying and encouraging the use of hand drying methods that do not facilitate microbial cross-contamination via airborne dissemination and aerosolisation;

20.   Underlines the need for major improvements in communication and in education and training aimed at both veterinarians and farmers;

21.   Urges the Commission once again to present, as soon as possible, a legislative proposal for the mandatory addition of the drug-fact-box to the package leaflet; the information provided by the drug-fact-box should be presented in a form that is clearly legible, prominent and clearly distinguishable from the rest of the text; this drug-fact-box should contain a short description of the necessary facts concerning the medicine in order to enable the patient to understand the utility and possible risks of the medicinal product and in order to apply the medicinal product safely and in the right way; this includes inter alia advice on how to use antibiotics in the right and proper way;

22.   Calls on the Commission and the Member States to promote the introduction of the European logo provided for by Implementing Regulation (EU) No 699/2014 in order to identify clearly online pharmacies which offer medicines for sale to the public remotely while safeguarding consumers against the purchase of fake medicines, which are often a health hazard;

23.   Points out that, on the basis of Decision No 1082/2013/EU on serious cross-border threats to health, Member States must provide the Commission with updates on the latest situation with regard to their preparedness and response planning at national level, and calls on Member States to submit the information concerned in accordance with the timetable established by that decision;

Reporting and accountability/liability issues

24.   Urges Member States to encourage regular information input from health professionals advising patients on how to minimise risks to their safety through contact with the healthcare system;

25.   Encourages the Member States to set up independent bodies to liaise with professionals in order to ensure the raising of awareness and the dissemination of alerts regarding threats to patient safety;

26.   Calls on the Member States to improve their reporting systems for adverse events and medical errors by developing measures that encourage accurate, blame-free and anonymous reporting by health professionals and patients, and to consider establishing an e-system which could facilitate and improve reporting by patients;

27.   Calls on the Member States to adopt measures that would improve the quality – and not just the quantity – of reporting on adverse events, so that reporting contains robust information that would really improve patient safety, and to establish a system in which data could be easily retrieved and which would ensure comprehensive and systematic evaluation;

28.   Calls on the Commission to develop standardised surveys for collecting data on HAIs;

29.   Calls on the Member States to be more rigorous in verifying and enforcing the ban on non-medical external staff performing medical treatment;

30.   Calls on Member States to inform patients about the risks and preventive measures relating to adverse events in healthcare, and about the complaint procedures and legal options available should an adverse event occur, via, for example, a patients’ rights representative;

31.   Calls on the Member States to take the necessary measures to avoid any conflict of interests affecting doctors and veterinarians in relation to prescription and sale of medicines;

32.   Calls on the Member States to ensure that full information on existing mechanisms for complaint and redress is readily available to patients who have suffered an HAI or a medical error;

33.   Invites the Commission to report on national practices of collective redress in HAI-related cases;

34.   Recognizes the value of citizens’ initiatives, such as the European Charter of Patients’ Rights based on the Charter of Fundamental Rights of the European Union, and the European Patients’ Rights Day, which has been organised every year on 18 April since 2007; invites the Commission and the Member States to support the European Patients’ Rights Day at local, national and EU level;

Fighting antimicrobial resistance

State of play and promising solutions

35.   Welcomes the Commission’s work on antimicrobial resistance and on the prevention and control of HAIs, as well as the coordination and surveillance efforts of the ECDC, in particular in the framework of the European Antimicrobial Resistance Surveillance Network (EARS-Net), the European Surveillance of Antimicrobial Consumption Network (ESAC-Net) and the Healthcare-Associated Infections surveillance Network (HAI-Net);

36.   Welcomes the joint work of coordination and surveillance on antimicrobial resistance of the ECDC, the EMA and the European Food Safety Authority (EFSA);

37.   Notes with concern that between 2010 and 2013 the percentages of K. pneumoniae resistant to fluoroquinolones, third-generation cephalosporins and aminoglycosides, as well as combined resistance to all three antibiotic groups and resistance to carbapenems, a last-line group of antibiotics, significantly increased in many Member States and at EU level; also notes that during the same period resistance to third-generation cephalosporins also significantly increased in many Member States and at EU level for E. coli ; further notes that in certain regions of Europe MDR-TB accounts for as many as 20 % of all new tuberculosis cases, while treatment outcomes for MDR-TB are alarmingly low;

38.   Notes with concern that in countries with high levels of multi-drug resistance, including resistance to carbapenems, only a few therapeutic options are available, among these being polymyxins; emphasises that in those countries the presence of bacteria resistant to polymyxins is a major warning that options for the treatment of infected patients are becoming even more limited;

39.   Notes that infections caused by antimicrobial resistant bacteria are very likely to entail costly prolonged hospital stays as well as the use of alternative and more expensive therapeutic treatments which will place an increased burden on the Member States’ healthcare systems;

40.   Regrets that the past 25 years have witnessed both a lack of awareness of the importance of rational use of antimicrobial agents, and antibiotics in particular, and a stagnation in drug development in the field of antimicrobial medicines, due in particular to the emergence of scientific, economic and regulatory barriers;

41.   Notes that both Horizon 2020 and the EU Third Public Health Programme have placed emphasis on HAIs and antimicrobial resistance;

42.   Notes that some existing and effective antibiotics are not available in several Member States, resulting in inappropriate selection of drug therapy, and therefore calls on the Member States and the Commission to examine how to keep effective antibiotics on the market;

43.   Points out that antibiotic resistance often holds up treatment with the right antibiotics and that, when they are given the wrong antibiotics or treatment starts too late, patients with serious infectious diseases suffer grave complications which in some cases can be fatal;

44.   Notes with great concern the high number of animals infected with bacteria that are resistant to antibiotics, and the risk of carry-over of these bacteria from infected meat to consumers;

45.   Notes with great concern the link between veterinary use of antimicrobials and the development of antimicrobial resistance in farmers, and the risk of this resistance being spread by hospital treatment;

46.   Welcomes initiatives and actions taken by the Member States, animal health professionals and animal owners aimed at ensuring responsible use of antimicrobials in animals and reducing antimicrobial use in animal husbandry;

47.   Considers research for new antimicrobial drugs to be of the utmost importance, and calls on the Commission to use the European Fund for Strategic Investments (EFSI) to stimulate research by, for instance, supporting existing structures such as the Innovative Medicines Initiatives (IMI);

48.   Calls for greater attention to be focused on the development of new antimicrobial agents aimed at new targets ;

49.   Welcomes and encourages further research into genuinely new antimicrobial drugs, in particular antibiotics with activity against prevalent multidrug-resistant Gram-negative bacteria and against diseases that are particularly prone to antimicrobial resistance, such as K. pneumoniae, Acinetobacter, E. coli, HIV, Staphylococcus aureus , tuberculosis and malaria; insists, however, that it is of primary importance to first of all ensure the responsible and sensible use of antimicrobials; welcomes and encourages further research into alternative methods aimed at fighting HAIs without using antibiotics and at combating MDR-TB;

50.   Calls on the Commission and the Member States to accelerate research and development activities with a view to providing new tools to fight bacterial infections that are increasingly prevalent in Europe;

51.   Calls on the Commission and the Member States to strengthen incentives for public and private sector cooperation to reinvigorate antibiotic development R&D;

52.   Calls on the Member States to step up the level of cooperation with regard to patient safety and combating antimicrobial resistance, in order to limit and reduce the spread of resistant micro-organisms from one Member State to another;

53.   Calls on the Commission and the Member States to use ‘adaptive pathways’ schemes and other regulatory tools for earlier patient access to innovative antibacterials to treat resistant infections;

54.   Calls on the Commission and the Member States to make use of the ‘adaptive pathway’ programme of the European Medicines Agency and to use all the regulatory tools at their disposal to enable more rapid access to innovative antibacterial treatment for patients;

55.   Highlights the need for patients to be at the centre of any health policy, and encourages health literacy and patient involvement in treatment decision-making;

56.   Considers it of paramount importance that the Commission should ensure the continuation of the EU Action Plan on Antimicrobial Resistance post-2016, emphasising how to overcome the scientific, regulatory and economic challenges associated with antimicrobial resistance, while including the prevention and control of healthcare-associated infections;

Recommendations regarding antibiotic use in human medicine

57.   Recalls that self-medication with antibiotics should be strictly prohibited and stresses the necessity of enforcement of a ‘prescription only’ policy for antibacterials by the national competent authorities of the Member States;

58.   Calls on the Member States to take suitable actions to ensure the responsible and sensible use in human medicine of all antimicrobial agents and in particular of antibiotics that are considered to be last-line treatment of bacterial infections in hospitals, bearing in mind that improper use of antibiotics for preventive purposes (including in hospitals) is one of the main contributory factors in the emergence of antibiotic resistance;

59.   Calls on the Member States to promote access to high-quality drugs as well as adherence to full treatment circles for all patients, with specific support for the most vulnerable, as a way to prevent the development of resistance;

60.   Urges Member States also to conduct research into so-called ‘forgotten’ antibiotics so that the range of pharmaceuticals from which to choose can be enlarged;

61.   Calls on the Commission to engage in the work of the WHO in developing a new economic model in order to take into consideration public health concerns and needs;

62.   Calls on the Member States and the Commission to start a reflection process to develop a new economic model, that de-links the volume of sales from the reward paid for a new antibiotic, which would reflect the societal value of a new antibiotic and allow for sufficient return on investment for the company, while the purchaser would gain the right to use the product and have full control over volumes;

63.  Urges the Member States to implement or develop the following measures:

   (a) remind physicians of the paramount importance of ensuring that the prescription of antibiotics for treatment is appropriate and responsible;
   (b) ensure that, whenever possible, appropriate microbiological diagnosis is systematically performed before prescribing antibiotics, for instance by using new diagnostic tools that could allow point-of-care rapid diagnosis, and/or antibiograms, especially in the case of diseases which have a tendency to relapse, as well as work to abolish hurdles that prevent proper microbiological diagnosis, especially in the ambulant sector;
   (c) regulate the prescription of antibiotics for treatment, and in particular strictly implement laws prohibiting the provision of antibiotics for treatments without prescription, so that an appropriate use of medicines is ensured, specifying the therapeutic objective and selecting the appropriate drug therapy;
   (d) implement responsible marketing practices avoiding conflicts of interest between producers and prescribers of medicine;
   (e) encourage the development of new revenue models whereby economic returns for companies are de-linked from prescribed volumes of antibiotics, while encouraging pharmaceutical innovation and balancing it with the sustainability of health systems;
   (f) regulate the sale and distribution of antibiotics so that patients can only obtain the specific quantity of antibiotics as prescribed by their doctors, because in some Member States rules still exist which authorise the sale of antibiotics in bigger package sizes than those intended for a specific treatment;
   (g) ensure greater levels of patient adherence to and compliance with antibiotic and other appropriate treatments prescribed by medical professionals, and develop strategies aimed at increasing patient understanding of the importance of the responsible use of antibiotic treatments and the risks of increasing antimicrobial resistance;
   (h) monitor antibiotic resistance and the use of antibiotics in hospitals and ensure that antibiotics when used in hospitals are only used according to the correct indications, at the correct dose and for the shortest duration possible as recommended by evidence-based guidelines;
   (i) intensify infection control, in particular from a cross-border perspective, and especially by carefully monitoring potential carriage of multidrug-resistant bacteria, through proper screening of patients transferred from a country/region/hospital known for its high prevalence of multidrug-resistant bacteria, and isolating positive patients in individual rooms or by implementing ‘cohort nursing’;
   (j) develop a multi-stakeholder strategy on MDR-TB to encompass key aspects such as prevention, awareness-raising, diagnosis, appropriate treatment, and adherence and compliance to prescribed medication;
   (k) improve safety standards, especially for medical devices that are resistant to sterilisation (e.g. endoscopes), and undertake careful monitoring to ensure that medical devices originally designed and CE-marked for single use, if regenerated, meet all safety standards in order to protect consumer health;
   (l) launch awareness campaigns targeting a wide audience, including health education courses in schools on the rational use of antibiotics and the risks entailed by increasing antibiotic resistance and the importance of developing good personal hygiene practices; these campaigns should target the young and old, as well as parents and carers, and should be followed up by outcome assessments, keeping in mind the opportunities offered by e-health systems in this regard;
   (m) increase public funding and create new academic positions to focus on exploring and validating new approaches for treating bacterial infections;
   (n) increase, in particular, the incentives for research and development of new antimicrobials;
   (o) invite the ECDC to carry out field missions to give Member States scientific and technical assistance and training on antimicrobial resistance as foreseen in Article 9 of the ECDC Regulation (Regulation (EC) No 851/2004); those Member States that have not yet done so, and especially those in which antimicrobial resistance is already high or is increasing alarmingly, are particularly urged to invite the ECDC to carry out such missions;
   (p) make the records of hospitals and other healthcare facilities with regard to HAIs publicly available, so that patients can make informed choices;

64.   Calls on the Commission to reflect on the consequences of the increased mobility provided for in Directive 2011/24/EU with regard to the enhanced antimicrobial resistance that could result from patients travelling throughout Europe for treatment;

Recommendations regarding antibiotic use in veterinary medicine in general and in husbandry in particular

65.   Expresses concern that the joint report by EFSA and ECDC on antimicrobial resistance shows that bacteria which most frequently cause food-borne infections such as Salmonella and Campylobacter have exhibited significant resistance to common antimicrobials;

66.   Repeats its call made in its resolution of 27 October 2011 on the public health threat of antimicrobial resistance(7) for a phase-out of the prophylactic use of antibiotics in livestock farming, stressing that the livestock and intensive fish-farming sectors should focus on preventing disease through good hygiene, housing and animal husbandry, as well as strict bio-security measures, rather than the prophylactic use of antibiotics;

67.  Calls on the Member States to introduce or develop the following measures:

   (a) promote and foster the responsible and sensible use in veterinary medicine, including medicated feed, of all antimicrobial agents, by allowing their use only for treatment after veterinary diagnosis, with specific additional consideration to antibiotics that are on the WHO list of critically important antimicrobials for human medicine;
   (b) introduce legal tools to restrict the use of antibiotics in animals if a significant risk to public health is identified;
   (c) implement tougher controls to limit the use of antibiotics in veterinary medicine; one of the ways to achieve this would be by restricting the right to prescribe antibiotics to professionally qualified veterinarians and by decoupling the veterinarians’ right to both prescribe and sell antibiotics so as to eliminate all economic incentives;
   (d) launch awareness campaigns on the responsible use of antimicrobials for animals, including pets;
   (e) reduce the need for antibiotics by improving animal health through biosecurity measures, disease prevention and good management practices, and establish strong and clearer methodologies and priorities in the fight against the development of antimicrobial resistance;
   (f) ensure that livestock farming and aquaculture focus on disease prevention through good hygiene, housing and animal husbandry and on strict biosecurity measures, rather than the prophylactic use of antibiotics; it is known that sounder farm management and animal husbandry procedures can be achieved through a review of provisions on maximum animal density in livestock farming, as current herd sizes often prevent individual or smaller animal group treatment, thus incentivising prophylactic use of antimicrobials;
   (g) restrict the use of antibiotics in intensively reared livestock and encourage organic or extensive models of livestock rearing;
   (h) reduce the use of antibiotics in animals by progressively eliminating their use for prophylactic purposes where antibiotics are administered to animals for disease prevention, and minimise the need for metaphylaxis, i.e. the mass medication of animals to cure sick specimens on farms whilst preventing infections in healthy animals;
   (i) develop and implement national strategies or action plans for countering AMR, which would include, inter alia:
   (i) implementation of national guidelines on the animal antimicrobial treatment to ensure responsible use of antimicrobials based on specific evidence and conditions in the respective Member States;
   (ii) implementation of preventative animal health policies aimed at improving animal health status and reducing the need for use of antimicrobials in animal husbandry;
   (iii) definition of the responsibilities of veterinarians in terms of animal health management and decision-making on the use of antimicrobials;
   (iv) implementation of continuous training for animal health professionals and animal owners;
   (j) confirm the prohibition of the use of antibiotics as growth promoters in livestock;

68.   Urges the Member States to regulate any conflicts of interest and financial incentives involving veterinarians who both sell and prescribe antibiotics;

69.   Calls on the European Medicines Agency to draw up a list of antibiotics used in animals for which a significant risk to public health has been identified;

70.  Urges national authorities and the EMA to take or develop the following measures:

   (a) reinforce the existing risk assessment of new veterinary antimicrobial substances by identifying the main potential risks to public health at a very early stage of authorisation;
   (b) monitor the development of resistance in specific bacteria according to plans agreed between regulators and companies when a new antimicrobial substance is first approved in veterinary medicine;
   (c) monitor changes in the use of antimicrobials in animals as part of the European Surveillance of Veterinary Antimicrobial Consumption (ESVAC) project (led by the EMA) for measuring the impact of the actions implemented;

71.  Calls on the co-legislator, when negotiating the proposal for a regulation on veterinary medicinal products (2014/0257(COD) ), to follow a course of action that is in line with the One Health principle, and more particularly:

   to adopt provisions banning the off-label use in animals of antimicrobials authorised only in human medicine;
   to support mandatory recording of the quantities of all antimicrobials used in livestock farming, to be communicated to the competent national authorities and made public by them on an annual basis;
   to ensure that standards of quality, safety and efficacy of veterinary medicinal products are not lowered with the new legislation on such products and that those high standards are guaranteed throughout the veterinary medicinal product life-cycle;
   to create an EU database with information on when, where, how and on which animals antimicrobials are used;
   to prohibit the on-line sale of antimicrobials;

72.   Calls on the co-legislator, when negotiating the proposal for a regulation on the manufacture, placing on the market and use of medicated feed and repealing Council Directive 90/167/EEC (2014/0255(COD) ) to ensure that it includes provisions aiming to substantially limit the use of medicated feed containing antimicrobials for food-producing animals, and in particular to strictly prohibit the preventive use of antimicrobials included in medicated feed;

73.   Calls on the Commission and the ECDC to carry out research into the potential direct or indirect damage arising from by the use of antimicrobials in pets, and to develop mitigation measures to reduce the risk of potential transmission of antimicrobial resistance from pets to people;

74.   Points out that some Member States have already successfully phased out prophylactic use at farm level; calls on the Commission, therefore, to come forward with legislation to phase out the prophylactic use of antibiotics;

Collaborative approaches within the European Union

75.   Calls on the Member States to cooperate on defining minimum patient safety standards and indicators for safety and quality of healthcare at the EU level, in consultation with all relevant stakeholders including patient organisations;

76.   Calls on the Commission and the Member States to further engage in a dialogue with all stakeholders and develop a coordinated, comprehensive and sustainable EU strategy for patient safety, as well as to put forward concrete solutions to be implemented at EU, national, regional, local and/or primary care levels;

77.   Calls on the Member States and the Commission to start a reflection process together with the WHO in order to develop a new economic model that de-links the volume of antibiotics sales from the reward paid for a new antibiotic, ensuring a fair return on investment for the companies while safeguarding the sustainability of national health systems;

78.   Calls on the Commission, the Member States and the pharmaceutical industry to optimise EU partnerships between academia and the pharmaceutical industry, as exemplified by the Innovative Medicines Initiative (IMI);

79.   Encourages pharmaceutical companies, governments and academia to contribute with their best assets (infrastructure, compounds, ideas and financial resources) to ground-breaking fundamental research and pre-competitive joint projects; believes that the Innovative Medicine Initiative (IMI) should be given the flexibility to explore any new findings emerging from those projects;

80.   Asks the Commission to consider a legislative framework to encourage the development of new antibiotic drugs, for example in the form of an instrument governing antibiotics for human use similar to that already proposed for antibiotics for animal use;

81.   Encourages the further pursuit of private-public collaborations, such as the Innovative Medicine Initiative (IMI) programmes “New Drugs for Bad Bugs”, COMBACTE, TRANSLOCATION, Drive AB or ENABLE, in order to harness the power of collaboration;

82.   Welcomes the Joint Programme Initiative on Antimicrobial Resistance, which allows Member States to agree on research needs so as to avoid duplication, and calls for an increase in funding for the development of new medicines as an alternative to antibiotics, in order to combat antimicrobial resistance;

83.   Encourages the EU to join the global innovation fund that has been proposed by the ‘Antibiotic Resistance Review’ conducted in the UK, with the aim of supporting ‘blue sky science’;

84.   Asks the Commission and the Member States to support easy-to-apply diagnostic tools in order to ensure greater availability of proper diagnosis before an antibiotic is prescribed or administered, especially in the ambulant sector;

85.   Encourages the EU to promote and take part in any global initiative aimed at improving ways of combating antibiotic resistance, and to support research in this field;

86.   Calls on the Commission to prepare, in collaboration with the Member States, recommendations on the food safety standards to be applied with respect to the presence of (multi)resistant pathogens and/or specified resistance determinants;

87.   Stresses that antimicrobial resistance has become a serious problem that needs to be urgently tackled; calls on the Commission to consider proposing legislation on the prudent use of antibiotics if little or no progress has been made in the Member States within five years of the publication of these recommendations;

o
o   o

88.   Instructs its President to forward this resolution to the Council, the Commission, the Committee of the Regions and the Member States.

(1) OJ C 184 E, 8.7.2010, p. 395.
(2) OJ C 151, 3.7.2009, p. 1.
(3) Texts adopted, P7_TA(2012)0483 .
(4) Texts adopted, P7_TA(2013)0435 .
(5) ‘Tackling antibiotic resistance from a food safety perspective in Europe, WHO Europe, 2011’.
(6) ‘Antibiotic use in livestock: Time to act’ (position paper), BEUC (European Consumer Organisation).
(7) OJ C 131 E, 8.5.2013, p. 116.


Green growth opportunities for SMEs
PDF 276k   DOC 94k
European Parliament resolution of 19 May 2015 on green growth opportunities for SMEs (2014/2209(INI) )
P8_TA(2015)0198 A8-0135/2015

The European Parliament,

–   having regard to its resolution of 5 February 2013 on improving access to finance for SMEs(1) ,

–   having regard to its resolution of 15 January 2014 on reindustrialising Europe to promote competitiveness and sustainability(2) ,

–   having regard to its resolution of 27 November 2014 on the revision of the Commission’s impact assessment guidelines and the role of the SME test(3) ,

–   having regard to the Commission Communication entitled ‘Think Small First’, A ‘Small Business Act’ for Europe (COM(2008)0394 ),

–   having regard to the Commission Communication entitled Review of the ‘Small Business Act’ for Europe (COM(2011)0078 ),

–   having regard to the Commission Communication entitled ‘Resource Efficiency Opportunities in the Building Sector’ (COM(2014)0445 ),

–   having regard to the Eurobarometer Survey on SMEs, resource efficiency and green markets (Flash Eurobarometer 381), and the Eurobarometer Survey on the role of public support in the commercialisation of innovations (Flash Eurobarometer 394),

–   having regard to the Committee of the Regions opinion (adopted during the 109th plenary session of 3-4 December 2014) on the Industrial Policy Package,

–   having regard to the Commission Communication entitled ‘Green Action Plan For SMEs’ (COM(2014)0440 ),

–   having regard to the European Resource Efficiency Platform Manifesto and Policy Recommendations – March 2014,

–   having regard to the Commission Communication entitled ‘Towards a circular economy: a zero waste programme for Europe’ (COM(2014)0398 ),

–   having regard to the Commission Communication entitled ‘Innovation for a sustainable Future – The Eco-innovation Action Plan (Eco-AP)’ (COM(2011)0899 ),

–   having regard to Rule 52 of its Rules of Procedure,

–   having regard to the report of the Committee on Industry, Research and Energy and the opinions of the Committee on Budgets and the Committee on Regional Development (A8-0135/2015 ),

A.   whereas SMEs account for more than 98 % of Europe’s businesses and provide more than 67 % of total employment in the Union and 58 % of gross value added; whereas they constitute the backbone of the European Union’s economy and are the key drivers of European long-term economic growth and sustainable job creation opportunities within the 28 Member States; whereas employment in the environmental goods and services sector in the years 2007-2011 grew by 20 % in spite of the crisis and presents an opportunity for SMEs to increasingly generate economic activity and jobs, including in areas affected by depopulation and ageing; whereas they thus play an important role in the industrial ecosystem together with mid-cap and multinational companies; whereas nine out of ten SMEs are small businesses employing 10 people or less and these microenterprises account for 53 % of all jobs in Europe;

B.   whereas at the moment, the global market for environmental goods and services is estimated at EUR 1 000 billion per year, and it is estimated that this amount will double or even triple by 2020, creating tremendous opportunities for Europe’s SMEs and economic growth in general in the EU; whereas the European Union is a world leader in both the import and export of environmental goods; whereas services are inextricably linked to these goods, yet there are non-tariff barriers that remain for the environmental service providers;

C.   whereas the European Union committed itself to reindustrialising Europe by investing in and supporting the principles of sustainability, competitiveness and innovation, in order to achieve a share of at least 20 % in industrial production as part of the EU Member States’ GDP until 2020; whereas the European Council has committed itself to reducing domestic greenhouse gas emissions by at least 40 %, increasing the share of renewable energy to at least 27 % and increasing energy efficiency by at least 27 % by 2030, with a view to raising this target to 30 %; whereas SMEs should play their role in fulfilling these targets, as 93 %(4) of them are already taking measures to become more resource efficient; whereas according to the Commission, better eco-design, waste prevention, recycling and reuse could bring net savings for EU businesses, estimated to represent up to EUR 600 billion, or 8 % of annual turnover, while also reducing total greenhouse gas emissions by 2-4 %;

D.   whereas enabling SMEs to transform environmental challenges into economic opportunities while acting sustainably is one of the principles of the Small Business Act, but whereas there has been no significant policy progress and SMEs often face inconsistent policies when commencing business and implementing environmental standards;

E.   whereas SME compliance with the growing number of environmental standards will be fostered by both the market and legislation; whereas the EU and the Member States should minimise the administrative burden in new and existing regulation, and should strive to avoid creating additional costs for enterprises in complying with such regulation; whereas new initiatives to reduce regulatory burdens on SMEs and other sectors have been proposed and should be implemented by the Commission and the Member States;

F.   whereas 90 % of EU enterprises are microenterprises; whereas despite recent efforts, SMEs and microenterprises continue to have difficulties with access to skills, information and finance, and to a sufficiently diversified choice of equity and debt instruments needed along the growth path of a company, and whereas EU programmes still fall short of significantly contributing to innovation; whereas application procedures for EU funding for SMEs are still too bureaucratic and therefore prohibitive for many SMEs;

G.   whereas account must be taken of the potential of the EU budget, as an investment-driven budget, to facilitate European SMEs’ access to funding through the reduction of bureaucracy and through dedicated financial tools and the increase of funding for LEOs (local enterprise offices); whereas the development of user-friendly procedures for the various forms of support should be enhanced;

H.   whereas small companies gain proportionally more than large entities from actions to improve resource efficiency and should receive more policy attention; whereas the potential gross benefit of improving resource efficiency is 10-17 % of turnover, depending on the operating sector;

I.   whereas digital technologies are both an important tool for use by SMEs in reaping the benefits expected from optimal use of resources and a sector where new SMEs can readily emerge and develop;

J.   whereas the focus is primarily on high-tech SMEs that directly deliver green innovations, but there is a need to support other companies in complying with environmental regulations, implementing green innovation measures and improving their environmental performance; whereas eco-innovation might be an idea for a new company, but also a measure to improve existing businesses within the framework of the green economy;

K.   whereas although there is no internationally agreed definition of green growth, there is consensus that it is a combination of economic growth and environmental sustainability; whereas enhancing skills and training is a key challenge for SMEs, which should receive particular attention, especially with regard to innovation and resource efficiency; whereas inadequate access to risk capital, in particular at the start-up stages, continues to be one of the main obstacles to the creation and development of growth-oriented businesses;

L.   whereas given that microenterprises generate thousands of jobs and as much as 53 % of employment across Europe, and as such require a different framework to work within, a consistent use of the definition of microenterprises is urgently required; whereas microenterprises face several major difficulties, such as barriers in procurement rules, excess regulatory burden and access to finance;

General issues

1.   Supports the concept of green growth and circular economy and notes that the opportunities arising from it relate to various areas of significant importance such as renewable energy sources, and in particular the economically viable exploitation of wind, solar, hydro and geothermal energy, energy efficiency, resource efficiency, waste management, emission reduction, electrification and cradle to cradle; points out the considerable economic and employment potential these areas have for different sectors; notes that green growth should be part of a wider strategy of promoting job creation and economic growth among SMEs;

2.   Stresses that green growth should be put in a broad perspective, and should include efforts deployed throughout the whole value chain and across the entrepreneurial ecosystem, including efforts by industrial manufacturing players to reduce the ecological footprint of their products, production processes, business practices and services; recalls the recommendations of the European Resources Efficiency Platform highlighting that resource efficiency requires a dynamic regulatory framework that gives appropriate signals to producers and consumers to improve the performance of products throughout their life-cycle; calls on the Commission to establish a comprehensive policy framework, including concrete policy objectives and better integrating and streamlining existing policy tools to ensure opportunities and participation of SMEs in the green and circular economy;

3.   Highlights the fact that the global economy will need to provide for an ever growing population – 9 billion people by 2050 – and that our natural resources are limited and therefore should be used in a sustainable and very efficient way; points out new innovative, green and sustainable solutions to these challenges, such as new products, production processes, business practices and services, for instance by integrating innovative digital technologies, and a new supporting legal framework;

4.   Reminds the Commission and the Member States that SMEs across Europe are very heterogeneous, ranging from very traditional, family-run businesses to fast-growing enterprises, high-tech firms, microenterprises, social enterprises and start-ups, and that approaches to assisting them must be equally diverse;

5.   Believes that the EU needs to drastically change its entrepreneurial culture in order to contribute to economic growth by having more people starting up their own businesses and seeking more business opportunities, especially in green growth, and by accepting failure and risk-taking; emphasises the importance of putting this issue at the centre of policymaking; calls on Member States to cater for a softer landing after business failure in their relevant legal frameworks, in order to allow people to start up a new business soon after failure of a previous venture, especially in new and innovative sectors; calls on the Commission to alleviate the fear of failure through awareness campaigns and education;

6.   Stresses the added value of the EU budget in helping SMEs, microenterprises, social enterprises and cooperatives to gain access to funding and international markets, in particular through the COSME programme and under Horizon 2020 and the European Structural and Investment Funds (ESIF); stresses the need for a clear and uniform EU-wide interpretation by national regulators and open public procurement rules;

7.   Notes that many European SMEs today compete internationally on solutions that include both products and so-called ‘green services’, such as construction, installation, repairs and management; notes that these services are central for the development, sale and export of green products; calls on the Commission to include green services in the ongoing negotiations on the Environmental Goods Agreement, as well as in bilateral trade agreements such as the TTIP, in order to reduce barriers for European SMEs and service providers wishing to go international;

8.   Emphasises the importance of good governance, an independent judiciary, transparency and the rule of law across the EU for the creation of a business-friendly climate and a market with a level playing field for SMEs;

Financing of green initiatives

9.   Points out that in the current circumstances where insufficient access to appropriate sources of risk capital, particularly in the early stages, continues to be one of the most significant constraints on the creation and development of growth-oriented firms, the Commission’s Action Plan on improving access to finance for SMEs places a lot of emphasis on venture capital as a possible mode of growth finance; underlines, nonetheless, that this kind of funding is adequate only for a small number of SMEs and that bank loans still constitute an important source of funding, and that alternatives should be developed by the private sector; notes in this context the importance of promoting alternative forms of lending to SMEs, such as credit unions; points out the potential financing opportunities that should be explored through the European Fund for Strategic Investments;

10.   Encourages the Member States to incentivise foreign investors by removing language barriers; notes that accepting applications and providing data in English, in addition to the official language(s) of a Member State, is a step towards that end;

11.   Stresses that there is no one-size-fits-all mode of finance and calls on the Commission to take into account the interests of SMEs in all existing and possible future programmes, instruments and initiatives, especially for new business models in the green economy, ranging across equity (such as business angels, crowd funding and multilateral trading facilities), quasi-equity (such as mezzanine finance) and debt instruments (such as small-ticket company bonds, guarantee facilities and platforms), and partnerships between banks and other operators involved in SME financing (accountancy professionals, business or SME associations or chambers of commerce), in order to support businesses in their start-up, growth and transfer phases, taking into account their size, turnover and financing needs; calls on the Member States and on local and regional authorities to ensure adequate incentives and to provide fiscal incentives for these funding models; stresses the importance of reviewing existing SME supporting instruments to include further green growth opportunities;

12.   Highlights the need to ensure coordination and complementarity between financial instruments in the EU budget, in particular under the European Structural and Investment Funds (ESIF), the EU Programme for Employment and Social Innovation (EaSI) and the LIFE programme;

13.   Calls on the Commission and the Member States to monitor the results achieved by SMEs that have accessed green innovation funding, in order to gauge the effectiveness of such funding; urges the Commission to lose no time in making the changes required for the funding to be more effective, should the results prove to be unsatisfactory;

14.   Notes that due to the highly technical nature of many green investment plans it is key to highlight the importance of standardised risk and return models and of developing new models for new challenges and sectors;

15.   Recalls that SMEs can be expected to play an important role in the circular economy, providing sustainable, yet labour-intensive services such as repair, refurbishing and recycling; notes that the Commission, the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), the International Labour Organisation (ILO), Parliament and the Eurogroup broadly support the principle of a tax shift from labour to natural resource use and consumption; requests that the Commission assess the impact of a tax shift from labour to natural resource use;

16.   Emphasises that entrepreneurs, SMEs, business associations and support organisations should be more literate on financing possibilities for more performant technologies, or for contracting services such as consultancy, coaching and training on eco-design, resource management and green entrepreneurship and availability of green technologies, products and services that could be beneficial for their business; calls on Member States to enhance provision of services for SMEs in those areas and also emphasises the need for simple and accessible sources of information and databases for these products and services; reminds the Commission and the Member States that this information should be communicated in a way that corresponds best with the logic and working methods of SMEs;

17.   Notes that EU programmes do not significantly contribute to eco-innovation and the circular economy and that the Commission, therefore, needs to focus better funding from COSME and Horizon 2020 towards the development of eco-innovative solutions by and for SMEs and to support financing for the improvement of product design and processes performance, building on the successful experiences in the past MFF; considers, in particular, that the SME instrument under Horizon 2020 needs to be fully implemented;

18.   Calls on the Commission and the EIB to make sure that in the implementation phase of the ‘Investment Plan for Europe’ SMEs, including green and innovative ones, will be key beneficiaries of the support provided for under this proposal; insists that clear criteria, including European added value, must be developed to achieve this aim and that provision of advisory services on resource efficiency and eco-innovation for SMEs be strengthened; calls on the EIB and the Commission to ensure that all categories listed in the Commission recommendation concerning the definition of micro, small and medium-sized enterprises (C(2003)1422) sufficiently benefit; points to the importance of Horizon 2020 and COSME for the support of SMEs, and the need for full implementation of the SME instrument under Horizon 2020;

19.   Considers that, in order to ensure complementarity of financial schemes for SMEs, it is essential to coordinate the measures taken under the Cohesion Policy and other programmes, such as the Horizon 2020 Programme, both nationally and regionally; stresses the importance of legislating in such a way as to allow SMEs to maintain their competitiveness;

20.   Calls on the Commission and the Member States to find a swift and lasting solution to the enormous backlog of payments related to regional policy and as regards the handling of ESIF assistance for the previous funding period, so as to ensure that SMEs as project partners will not, on account of payment delays, be deterred from taking part in support programmes and projects;

Knowledge management

21.   Highlights the importance of actively pursuing collaboration across sectors, along value chains as well as geographical areas, which offers the potential to spark innovation and new growth opportunities through cross-fertilisation of ideas and innovative concepts; welcomes the Horizon 2020 action ‘Cluster facilitated projects for new industrial value chains’, to better unlock the innovation potential of SMEs, including the eco-innovative and resource-efficient solutions they offer;

22.   Welcomes the establishment of a European Resource Efficiency Excellence Centre to advise and assist SMEs seeking to improve their resource efficiency performance; stresses the need to establish this centre as a strong network of partners across EU regions and to build on proven experiences in Member States; believes it should guide SMEs to European, national and regional programmes in this field of action, and provide access to expertise, networks and infrastructure;

23.   Stresses the importance of knowledge transfers and multi-stakeholder knowledge sharing, including cross-border, through informal networks, especially for SMEs and microenterprises, to raise awareness of existing and new innovative techniques, best practices, ways to acquire proper financing, possible government support schemes and the relevant legislative frameworks entailing the least burdensome administration, and recalls that the existing national contact points for the EU funding programmes and the Enterprise Europe Network (EEN) have to be fully involved in the support of SMEs and proactively inform, coach and support SMEs in identifying financing possibilities at EU, national or regional level; supports the organisation of a European Resource Efficiency Campaign to inform SMEs about the benefits and opportunities offered by resource efficiency and how industrial synergies on recycling can be created; calls on the Commission and the EEN to cooperate on resource efficiency with industry associations, trade unions, SMEs, NGOs and academia, as well as regional initiatives; welcomes, in this regard, the Commission’s focus on symbioses and clusters and encourages the Commission to come forward with concrete initiatives to facilitate cross-sectoral cooperation and resource management;

24.   Urges sector federations to play a more prominent role in providing appropriate information and advice on green technologies, funding possibilities and the relevant procedures; calls on the Commission and the Member States to fill the gap where this support is lacking and, in cooperation with sector federations and companies, to further investigate what opportunities exist and accelerate sustainable solutions, and invest in environmentally friendly technologies, resource efficiency and the recycling economy; notes the growing gap between the needs of SMEs and the skills of employees; notes that 26 % of employers in Europe face difficulties in finding employees who possess the right skills;

Research, development and innovation, and skills

25.   Stresses the need to be more effective in developing basic R&D, to fully involve SMEs in this process and to actively support further transformation of basic R&D outcomes into further technological advances; highlights the importance of the reindustrialisation of Europe given the importance of the manufacturing industry for R&D&I and thus the EU’s future competitive advantage; believes that non-technological, organisational, systems and public sector innovation should also be given sufficient attention, along with technology-driven solutions;

26.   Highlights the importance of the commercialisation and valorisation by European companies of R&D output; calls on the Commission and the Member States to provide for a more stable regulatory framework and adequate financial schemes in order to enable economic initiative and entrepreneurship and to limit the time to market of new products, services and business practices, notably in the green economy;

27.   Stresses the potential for innovation and green growth which lies in new European space infrastructure; calls on the Commission to promote the use by SMEs of data derived from these infrastructures in business nurseries and incubators; calls on the Commission to institute a regime for SMEs which affords ready access to data from these infrastructures at the research, development and commercialisation stages;

28.   Notes that according to the May 2014 Innobarometer only 9 % of all companies say they have enjoyed public financial support for their R&D&I activities since January 2011; stresses the need to develop user friendly procedures for the various forms of support;

29.   Notes the benefits which the unitary European patent confers on SMEs, particularly in the field of green technologies; calls on all Member States to join the unitary European patent system; calls on Member States to ratify without delay the Agreement on a Unified Patent Court, which is necessary for the application of the unitary European patent; calls on the Commission to propose a simplified procedure for use by SMEs in bringing an action for infringement before the Unified Patent Court;

30.   Calls for an improved policy framework for the circular economy, including adopting and implementing smart regulation, standards and codes of conduct which aim to internalise externalities, tackling resource-intensive products, creating a level playing field, rewarding front-runners and accelerating the transition towards a resource-efficient and sustainable economy;

31.   Calls on the Commission to include as part of the Circular Economy Package the extension of the eco-design instrument to include the resource efficiency dimension; believes that eco-design should address durability, reparability and recyclability of products, including standards for guaranteed minimum lifetime and disassembly;

32.   Encourages the extension of innovative support schemes, such as green innovation vouchers, which can promote the introduction of sustainable technologies and environmentally friendly and climate-resilient solutions; as regards applications for support, considers that the rules need to be simple and clear and should not represent an administrative burden; furthermore, invites the Commission and the Member States to find innovative financing solutions for SMEs and to provide fully accessible financing instruments; recalls that the sustainable growth and innovation capacity of European SMEs is one of the main competitive advantages that the EU has in globalised markets;

(De)regulation as an engine for growth

33.   Calls on Member States to avoid creating barriers to the internal market by gold-plating, to review their current regulatory regimes, to remove any superfluous or ineffective regulations which constitute market barriers, and to ensure consistent transposition into national legislation; calls on the Commission to ensure that the SME Test is fully applied in all impact assessments; invites the Commission to step up its efforts in addressing gold-plating with individual Member States; stresses the need for a clear and uniform EU-wide interpretation by national regulators and open public procurement rules, including green procurement and e-procurement, which at the moment represents a substantial barrier for SMEs wishing to internationalise and at the same time a tremendous opportunity for Member States to be early adaptors, including in resource- and energy-efficient products and solutions;

34.   Welcomes the Commission decision for withdrawing obsolete or overly burdensome legislative proposals; expects the Commission to come forward with a more ambitious waste legislation proposal, as announced by Vice-President Timmermans in Parliament’s plenary session of December 2014; calls on the Commission to refrain from legislative proposals that would lead to an unnecessary administrative burden for businesses and SMEs and to continuously review existing legislation with the objective of decreasing the current administrative burden, improving the quality and effectiveness of legislation and adapting this to new business models; stresses, nonetheless, the need for ambitious actions, an adequate and timely implementation of existing legislation and early involvement of stakeholders from the relevant industries and SMEs, including in the impact assessment, in order to reach the EU’s environmental targets;

35.   Recalls the importance of technology-neutral and innovation-friendly legislation, which allows different new technologies to be tested and valued by the market; welcomes the development of the Environmental Technology Verification (ETV) scheme as a new tool to help innovative environmental technologies reach the market; calls on Member States to make adequate use of market-based instruments in their public support schemes and to refrain from using environmentally harmful market distorting subsidies; recalls that public intervention should be used to address market failures such as the non-pricing of externalities; calls on the Commission to draw up common guidelines for national public support schemes for green investment projects in order to create a more uniform set of measures;

36.   Notes that disruptive industries and technologies often indicate flaws in existing legislation; stresses the need for continuous monitoring and updating of existing legislation and its implementation, so that sustainable or eco-innovative technologies and new technological developments do not encounter barriers;

Miscellaneous support measures

37.   Believes that developing entrepreneurship skills and programmes to learn how the market, the economy and the financial system operate, function and interact, along with environmental awareness, and how new technologies can boost effective, innovative and green opportunities, should be included in basic and higher education systems, and also be promoted through extra-curricular activities and lifelong learning; believes that a well prepared business plan is the first step towards better access to finance and viability; calls on the Commission and the Member States to include entrepreneurship, financial, economic and environmental education in their education programmes without delay; supports in this connection the ‘Erasmus for Young Entrepreneurs’ programme, designed to promote an entrepreneurial culture and develop the single market and competitiveness;

38.   Stresses that microenterprises and start-ups should also be afforded help and guidance in moving towards sustainable green growth; calls on the Commission to ensure that these businesses will be adequately covered by new initiatives focused on green growth opportunities for SMEs;

39.   Notes that the Erasmus+ programme makes it possible for students and young people to develop entrepreneurship skills through, amongst others, the funding of internships; supports the ‘Erasmus for Young Entrepreneurs’ programme, designed to promote an entrepreneurial culture and develop the single market and competitiveness;

40.   Notes the importance of addressing unsustainable consumption patterns and promoting a change in consumer behaviour; stresses the need for adequate consumer education and the need to encourage incentives for more sustainable consumption; calls on the Commission and the Member States to reinforce demand side measures, such as making use of public procurement in order to enhance uptake of resource- and energy-efficient products and solutions; stresses the value of including resource use in product information and eco-labels in order to empower consumers;

41.   Stresses the importance of facilitating start-ups and spin-offs through collaboration with technological research institutes, universities and vocational training establishments;

42.   Highlights the importance of exports for the creation of jobs and growth in Europe; calls on the Commission to speed up pending trade agreements with our partners so as to facilitate European SMEs’ access to new markets;

43.   Believes that female entrepreneurship is an asset as yet insufficiently valued for the growth and competitiveness of the EU, which should be fostered and strengthened, and that all the obstacles, in particular wage discrimination, facing women, including in the green economy, should be removed in order for women and men to benefit equally; believes that regular collection of harmonised statistics, including on the gender-specific impact of legislation and sex-disaggregated labour data, would facilitate more evidence-based policymaking and monitoring and fill a knowledge gap in the green discourse;

44.   Calls on the Commission to study and identify the sectors of European industry and geographical areas where the conditions are met for the creation of new clusters and hubs, and to support their development;

45.   Calls on the Commission and the Member States to take particular notice of and respond to the opportunities and challenges presented by rural areas in respect of SMEs, green growth and eco-innovation;

46.   Calls on the Member States (at the level of national, regional and local policymakers and managing authorities) to continuously promote sustainable growth, under the smart specialisation strategies with the engagement of key stakeholders, that favours clustering, synergies and networks around the activities of the green economy; asks the Commission to report to Parliament on the implementation of smart specialisation strategies at national and/or regional level, where appropriate, and especially as regards the various patterns of ‘downstream actions’ used in the EU and in Member States; calls on the Commission and the Member States to provide information on the practical measures taken in order to develop competencies for eco-innovative SMEs through interconnecting regional innovation centres and the key support networks;

47.   Calls on the Commission, under the umbrella of regional policy, to draw up specific programmes which embody all relevant green growth elements for SMEs; stresses the necessity for youth entrepreneurship potential to be used to the full in the context of green growth of SMEs; calls on the Commission to prepare measures which would connect educational institutions with European programmes and measures to support the green economy; asks the Commission and the Member States to use all the means at their disposal to provide advice to the workforce of the SMEs and raise their awareness in order to improve their knowledge and skills; calls for the support for training to be focused on young people and the most disadvantaged groups;

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48.   Instructs its President to forward this resolution to the Council and the Commission.

(1) Texts adopted, P7_TA(2013)0036 .
(2) Texts adopted, P7_TA(2014)0032 .
(3) Texts adopted, P8_TA(2014)0069 .
(4) http://ec.europa.eu/public_opinion/flash/fl_381_en.pdf

Last updated: 19 July 2016Legal notice