Procedure : 2009/0144(COD)
Document stages in plenary
Document selected : A7-0169/2010

Texts tabled :

A7-0169/2010

Debates :

PV 06/07/2010 - 11
CRE 06/07/2010 - 11

Votes :

PV 07/07/2010 - 8.5
PV 07/07/2010 - 8.6
CRE 07/07/2010 - 8.5
CRE 07/07/2010 - 8.6
Explanations of votes
Explanations of votes
Explanations of votes
PV 22/09/2010 - 5.12
Explanations of votes
Explanations of votes

Texts adopted :

P7_TA(2010)0270
P7_TA(2010)0339

REPORT     ***I
PDF 1015kWORD 1770k
3 June 2010
PE 438.409v03-00 A7-0169/2010

on the proposal for a regulation of the European Parliament and of the Council establishing a European Securities and Markets Authority

(COM(2009)0503 – C7-0167/2009 – 2009/0144(COD))

Committee on Economic and Monetary Affairs

Rapporteur: Sven Giegold

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 OPINION of the Committee on Budgets
 OPINION of the Committee on Legal Affairs
 OPINION of the Committee on Constitutional Affairs
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council establishing a European Securities and Markets Authority

(COM(2009)0503 – C7-0167/2009 – 2009/0144(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2009)0503),

–   having regard to Article 251(2) and Article 95 of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C7-0167/2009),

–   having regard to the Commission Communication to Parliament and the Council entitled 'Consequences of the entry into force of the Treaty of Lisbon for ongoing interinstitutional decision-making procedures' (COM(2009)0665),

–   having regard to Article 294(3) and Article 114 of the Treaty on the Functioning of the European Union,

–   having regard to the opinion of the European Economic and Social Committee of 21 January 2010,

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs and the opinions of the Committee on Budgets, the Committee on Legal Affairs and the Committee on Constitutional Affairs (A7-0169/2010),

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

2.  Considers that the reference amount indicated in the legislative proposal is compatible with the ceiling for subheading 1a of multiannual financial framework for 2007-2013 (MFF), but the margin remaining in heading 1a for 2011-2013 is very limited and the funding of new activities must not jeopardise the financing of other priorities under subheading 1a; reiterates, therefore, its call for a review of the MFF, accompanied by concrete proposals to adjust and revise it before the end of first semester 2010 by using all the mechanisms available under the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management(1) (IIA), and, in particular, those in points 21 to 23 thereof, in order to ensure the financing of the European Securities and Markets Authority (Authority) without jeopardising the financing of the other priorities, and ensuring that a sufficient margin will remain, under subheading 1a;

3.  Underlines that the provisions of point 47 of the IIA shall be applied for the setting-up of the Authority; stresses that, should the legislative authority decide in favour of setting up the Authority, Parliament will enter into negotiations with the other arm of the budgetary authority with a view to coming to a timely agreement on the financing of the Agency in line with the relevant provisions of the IIA;

4.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

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

Amendment  1

Proposal for a regulation

Title

Text proposed by the Commission

Amendment

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

establishing a European Securities and Markets Authority

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

establishing a European Supervisory Authority (Securities and Markets)

 

(This amendment applies throughout the text.)

Amendment  2

Proposal for a regulation

Recital 1

Text proposed by the Commission

Amendment

(1) The financial crisis in 2007/2008 exposed important shortcomings in financial supervision, both in particular cases and in relation to the financial system as a whole. Nationally-based supervisory models have lagged behind the integrated and interconnected reality of European financial markets, in which many financial firms operate across borders. The crisis exposed shortcomings in the area of cooperation, coordination, consistent application of Community law and trust between national supervisors.

(1) The financial crisis in 2007/2008 exposed important shortcomings in financial supervision, both in particular cases and in relation to the financial system as a whole. Nationally-based supervisory models have lagged behind increased connectivity, complexity and globalization of financial markets and the integrated and interconnected reality of European financial markets, in which many financial firms operate across borders. The crisis exposed shortcomings in the area of cooperation, coordination, consistent application of Union law and trust between national supervisors.

Amendment  3

Proposal for a regulation

Recital 1 a (new)

Text proposed by the Commission

Amendment

 

(1a) Long before the financial crisis the European Parliament was already calling regularly for the reinforcement of a true level playing field for all actors at Union level while pointing out significant failures in the Union's supervision of ever more integrated financial markets (in its resolutions of 13 April 2000 on the Commission communication on implementing the framework for financial markets: Action Plan1, of 25 November 2002 on prudential supervision rules in the European Union2, of 11 July 2007 on financial services policy (2005-2010) – White Paper3, of 23 September 2008 with recommendations to the Commission on hedge funds and private equity4, of 9 October 2008 with recommendations to the Commission on Lamfalussy follow-up: future structure of supervision5, of 22 April 2009 on the amended proposal for a directive of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)6 and of 23 April 2009 on the proposal for a regulation of the European parliament and of the Council on Credit Rating Agencies7).

 

________________

1 OJ C 40, 7.2.2001, p. 453.

2 OJ C 25E, 29.1.2004, p. 394.

3 OJ C 175 E, 10.7.2008, p. xx..

4 OJ C 8 E, 14.1.2010, p. 26.

5 OJ C 9 E, 15.1.2010, p. 48.

6 Texts adopted, P6_TA(2009)0251.

7 Texts adopted, P6_TA(2009)0279.

Amendment  4

Proposal for a regulation

Recital 2

Text proposed by the Commission

Amendment

(2) A report published on 25 February 2009 by a high-level group of experts chaired by J. de Larosière, requested by the Commission, concluded that the supervisory framework needed to be strengthened to reduce the risk and severity of future financial crises and recommended far-reaching reforms to the structure of supervision of the financial sector in the Community. That group of experts also concluded that a European System of Financial Supervisors should be created, comprising three European Supervisory Authorities, one for the securities sector one for the insurance and occupational pensions sector and one for the banking sector, and the creation of a European Systemic Risk Council.

(2) A report published on 25 February 2009 by a high-level group of experts chaired by J. de Larosière (the de Larosière Report), requested by the Commission, concluded that the supervisory framework needed to be strengthened to reduce the risk and severity of future financial crises and recommended reforms to the structure of supervision of the financial sector in the Union. That group of experts also concluded that a European System of Financial Supervisors should be created, comprising three European Supervisory Authorities, one for the securities sector one for the insurance and occupational pensions sector and one for the banking sector, and the creation of a European Systemic Risk Council. The recommendations in the report represented the lowest level of change that the experts qualified as necessary to avoid a similar crisis to take place in the future.

Amendment  5

Proposal for a regulation

Recital 3

Text proposed by the Commission

Amendment

(3) The Commission in its Communication of 4 March 2009 entitled "Driving European Recovery" proposed to bring forward draft legislation creating a European System of Financial Supervisors and a European Systemic Risk Board, and in its Communication of 27 May 2009 entitled "European Financial Supervision" provided more detail about the possible architecture of such a new supervisory framework.

(3) In its Communication of 4 March 2009 entitled "Driving European Recovery", the Commission proposed to bring forward draft legislation creating a European System of Financial Supervisors and a European Systemic Risk Board, and in its Communication of 27 May 2009 entitled "European Financial Supervision", it provided more detail about the possible architecture of such a new supervisory framework, but did not include all the recommendations made in the de Larosière Report.

Amendment  6

Proposal for a regulation

Recital 7

Text proposed by the Commission

Amendment

(7) The European System of Financial Supervisors should be a network of national and Community supervisory authorities, leaving day-to-day supervision of financial market participant at the national level, and according a central role in the supervision of cross-border groups to colleges of supervisors. Greater harmonisation and the coherent application of rules for financial market participants and markets across the Community should also be achieved. A European Securities and Markets Authority should be established, along with a European Insurance and Occupational Pensions Authority and a European Banking Authority (the European Supervisory Authorities).

(7) The European System of Financial Supervisors should be a network of national and Union supervisory authorities, leaving day-to-day supervision of financial institutions that have no EU dimension to the national level. Colleges of Supervisors should supervise institutions operating as cross borders that have no EU dimension. A European Supervisory Authority (Securities and Markets) (the Authority) shall gradually take over supervision of institutions with Union dimension. Greater harmonisation and the coherent application of rules for financial institutions and markets across the Union should also be achieved. In addition to the Authority, a European Supervisory Authority (Insurance and Occupational Pensions) and a European Supervisory Authority (Banking) as well as a European Supervisory Authority (Joint Committee) should be established. The European Systemic Risk Board should form part of a European System of Financial Supervision.

Amendment  7

Proposal for a regulation

Recital 9

Text proposed by the Commission

Amendment

(9) The European Securities and Markets Authority ("the Authority") should act with a view to improving the functioning of the internal market, including in particular by ensuring a high, effective and consistent level of regulation and supervision taking account of the varying interests of all Member States, to protect investors, to ensure the integrity, efficiency and orderly functioning of financial markets, to safeguard the stability of the financial system, and to strengthen international supervisory coordination, for the benefit of the economy at large, including financial market participants and other stakeholders, consumers and employees. Its tasks also include promoting supervisory convergence and providing advice to the EU institutions in areas of securities and markets regulation and supervision, as well as related corporate governance and financial reporting issues. In order to be able to fulfil its objectives, it is necessary and appropriate that the Authority should be a Community body having legal personality and that it should have legal, administrative and financial autonomy.

(9) The Authority should act with a view to improving the functioning of the internal market, including in particular by ensuring a high, effective and consistent level of regulation and supervision taking account of the varying interests of all Member States, to prevent regulatory arbitrage and guarantee a level playing field, to protect investors, to ensure the integrity, efficiency and orderly functioning of financial markets, to safeguard the stability of the financial system, and to strengthen international supervisory coordination, for the benefit of the economy at large, including financial market participants and other stakeholders, consumers and employees. Its tasks also include promoting supervisory convergence and providing advice to the EU institutions in areas of securities and markets regulation and supervision, as well as related corporate governance and financial reporting issues. In order to be able to fulfil its objectives, it is necessary and appropriate that the Authority should be a Union body having legal personality and that it should have legal, administrative and financial autonomy.

Amendment  8

Proposal for a regulation

Recital 9 a (new)

Text proposed by the Commission

Amendment

 

(9a) In order to be able to fulfil its objectives, it is necessary and appropriate that the Authority should be be an EU body with legal personality and legal, administrative and financial autonomy. The Authority should be granted powers to address compliance with laws as well as safety and soundness concerns, in particular those related with systemic risk and cross border risks.

Amendment  9

Proposal for a regulation

Recital 9 b (new)

Text proposed by the Commission

Amendment

 

(9b) On 28 October 2009, the Financial Stability Board, the Bank for International Settlements, the International Monetary Fund defined systemic risk as "a risk of disruption to financial services that is (i) caused by an impairment of all or parts of the financial system and (ii) has the potential to have serious negative consequences for the real economy. All types of financial intermediaries, markets and infrastructure can potentially be systematically important to some degree”.

Amendment  10

Proposal for a regulation

Recital 9 c (new)

Text proposed by the Commission

Amendment

 

(9c) Cross-border risk, according to those institutions, includes all risks caused by economic imbalances or financial failures in all or parts of the Union that have the potential to have significant negative consequences for the transactions between economic operators of two or more Member States, for the functioning of the internal market or for the public finances of the Union or any of its Member States.

Amendment  11

Proposal for a regulation

Recital 10

Text proposed by the Commission

Amendment

(10) The Court of Justice of the European communities in its judgement of 2 May 2006 in Case C-217/04 (United Kingdom/European Parliament and Council) has acknowledged that Article 95 of the Treaty relating to the adoption of measures for the approximation of legislation for the establishment and functioning of the internal market provides an appropriate legal basis for setting up a "Community body responsible for contributing to the implementation of a process of harmonisation", when the tasks conferred on such a body are closely related to the subject-matter of the acts approximating the national legislations. The purpose and tasks of the Authority - assisting competent national supervisory authorities in the consistent interpretation and application of Community rules and contributing to financial stability necessary for financial integration - are closely linked to the objectives of the Community acquis concerning the internal market for financial services. The Authority should therefore be established on the basis of Article 95 of the Treaty.

(10) The Court of Justice of the European Union in its judgement of 2 May 2006 in Case C-217/04 (United Kingdom/European Parliament and Council) held that: “nothing in the wording of Article 95 TEC [now Article 114 of the Treaty on the Functioning of the European Union] implies that the addressees of the measures adopted by the Community legislature on the basis of that provision can only be the individual Member States. The legislature may deem it necessary to provide for the establishment of a Community body responsible for contributing to the implementation of a process of harmonization in situations where, in order to facilitate the uniform implementation and application of acts based on that provision, the adoption of non-binding supporting and framework measures seems appropriate"1 .and the tasks conferred on such a body are closely related to the subject-matter of the acts approximating the national legislations. The purpose and tasks of the Authority - assisting competent national supervisory authorities in the consistent interpretation and application of Union rules and contributing to financial stability necessary for financial integration - are closely linked to the objectives of the Union acquis concerning the internal market for financial services. The Authority should therefore be established on the basis of Article 114 of the Treaty on the Functioning of the European Union.

Amendment  12

Proposal for a regulation

Recital 12

Text proposed by the Commission

Amendment

(12) The term financial market participant should cover a diverse range of participants who are subject to Community legislation in this area. It may include both legal persons and individuals. It can include for example investment firms, UCITS and their management companies, alternative investment fund managers, market operators, clearing houses, settlement systems, credit rating agencies, issuers, offerors, investors, persons who control or have an interest in participants, persons involved in the management of participants as well as other persons in relation to whom a requirement in the legislation applies. It should also include financial institutions such as credit institutions and insurance companies when engaging in activities covered by Community legislation in this area. Competent authorities in the EU and of third countries as well as the Commission do not fall within this definition

(12) Existing Union legislation regulating the field covered by this Regulation also includes Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate, Regulation (EC) No 1781/2006 of the European Parliament and of the Council of 15 November 2006 on information on the payer accompanying transfers of funds1, Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions2 and relevant parts of Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, and Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services.

Amendment  13

Proposal for a regulation

Recital 14

Text proposed by the Commission

Amendment

(14) There is a need to introduce an effective instrument to establish harmonised technical standards in financial services to ensure, also through a single rulebook, a level playing field and an adequate protection investors and consumers across Europe. As a body with highly specialised expertise, it is efficient and appropriate to entrust the Authority, in areas defined by Community law, with the elaboration of draft technical standards, which do not involve policy choices. The Commission should endorse those draft technical standards in accordance with Community law in order to give them binding legal effect. The draft technical standards have to be adopted by the Commission. They would be subject to amendment if, for example, the draft technical standards were incompatible with Community Law, would not respect the principle of proportionality or would run counter to the fundamental principles of the internal market for financial services as reflected in the acquis of Community financial services legislation. To ensure a smooth and expedited adoption process for those standards, the Commission should be subject to a time limit for its decision on the endorsement.

 

(14) There is a need to introduce an effective instrument to establish harmonised regulatory standards in financial services to ensure, also through a single rulebook, a level playing field and an adequate protection of depositors, investors and consumers across Europe. As a body with highly specialised expertise, it is efficient and appropriate to entrust the Authority, in areas defined by Union law, with the elaboration of draft regulatory standards, which do not involve policy choices. The Commission should be empowered to adopt regulatory standards in accordance with the procedure referred to in Article 290 of the Treaty on the Functioning of the European Union.

 

Amendment  14

Proposal for a regulation

Recital 15

Text proposed by the Commission

Amendment

(15) The process for the development of technical standards in this regulation is without prejudice to the Commission's powers to adopt on its own initiative implementing measures under comitology procedures at level 2 of the Lamfalussy structure as laid out in the relevant Community legislation. The matters concerned by the technical standards do not involve policy decisions, and their content is framed by the Community acts adopted at Level 1. Development of the draft standards by the Authority ensures that they fully benefit from the specialised expertise of national supervisory authorities.

(15) The Commission should endorse those draft regulatory standards in order to give them binding legal effect. They should be subject to amendment if, for example, they are incompatible with Union law, do not respect the principle of proportionality or run counter to the fundamental principles of the internal market for financial services as reflected in Union financial services law. To ensure a smooth and expeditious adoption process for those standards, the Commission should be subject to a time limit for its decision on the endorsement.

Amendment  15

Proposal for a regulation

Recital 15 a (new)

Text proposed by the Commission

Amendment

 

(15a) The Commission should also be empowered to implement legal acts in accordance with Article 291 of the Treaty on the Functioning of the European Union.

Amendment  16

Proposal for a regulation

Recital 16

Text proposed by the Commission

Amendment

(16) In areas not covered by technical standards, the Authority should have the power to issue non-binding guidelines and recommendations on the application of Community legislation. In order to ensure transparency and strengthen compliance by national supervisory authorities with those guidelines and recommendations, national authorities should be obliged to state their reasons where they do not comply with those guidelines and recommendations.

(16) In areas not covered by regulatory standards, the Authority should have the power to issue guidelines and recommendations on the application of Union legislation. In order to ensure transparency and strengthen compliance by national supervisory authorities with those guidelines and recommendations, national authorities should be obliged to publish the reasons where they do not comply with those guidelines and recommendations in order to ensure full transparency towards market participants. In areas not covered by regulatory standards, the Authority should establish and promulgate best practices.

Amendment  17

Proposal for a regulation

Recital 17

Text proposed by the Commission

Amendment

(17) Ensuring the correct and full application of Community law is a core prerequisite for the integrity, efficiency and orderly functioning of financial markets, the stability of the financial system, and for neutral conditions of competition for financial market participants in the Community. A mechanism should therefore be established whereby the Authority addresses instances of incorrect or insufficient application of Community law. This mechanism should apply in areas where Community legislation defines clear and unconditional obligations.

(17) Ensuring the correct and full application of Union law is a core prerequisite for the integrity, efficiency and orderly functioning of financial markets, the stability of the financial system, and for neutral conditions of competition for financial market participants in the Union. A mechanism should therefore be established whereby the Authority addresses instances of non-application of Union law. This mechanism should apply in areas where Union legislation defines clear and unconditional obligations.

Amendment  18

Proposal for a regulation

Recital 19

Text proposed by the Commission

Amendment

(19) Where the national authority does not comply with the recommendation, the Commission should be empowered to address a Decision to the national supervisory authority concerned in order to ensure compliance with Community law, creating direct legal effects which can be invoked before national courts and authorities and enforced under Article 226 of the Treaty.

(19) Where the national authority does not comply with the recommendation, within a deadline fixed by the Authority, the Authority should be able to address a Decision without delay to the national supervisory authority concerned in order to ensure compliance with Union law, creating direct legal effects which can be invoked before national courts and authorities and enforced under Article 258 of the Treaty on the Functioning of the European Union.

Amendment  19

Proposal for a regulation

Recital 21

Text proposed by the Commission

Amendment

(21) Serious threats to the orderly functioning and integrity of financial markets or the stability of the financial system in the Community require a swift and concerted response at Community level. The Authority should therefore be able to require national supervisory authorities to take specific actions to remedy an emergency situation. As the determination of an emergency situation involves a significant degree of discretion, this power should be conferred on the Commission. To ensure an effective response to the emergency situation, in the event of inaction by the competent national supervisory authorities, the Authority should be empowered to adopt, as a last resort, decisions directly addressed to financial market participants in areas of Community law directly applicable to them aimed at mitigating the effects of the crisis and restoring confidence in the markets.

(21) Serious threats to the orderly functioning and integrity of financial markets or the stability of the financial system in the Union require a swift and concerted response at Union level. The Authority should therefore be able to require national supervisory authorities to take specific actions to remedy an emergency situation. The European Systemic Risk Board should determine when there is an emergency situation. As the determination of an emergency situation involves a significant degree of discretion, this power should be conferred on the Commission. To ensure an effective response to the emergency situation, in the event of inaction by the competent national supervisory authorities, the Authority should be empowered to adopt, as a last resort, decisions directly addressed to financial market participants in areas of Union law directly applicable to them aimed at mitigating the effects of the crisis and restoring confidence in the markets.

Amendment  20

Proposal for a regulation

Recital 21 a (new)

Text proposed by the Commission

Amendment

 

(21a) The Declaration on strengthening the financial system adopted on the summit of G-20 Leaders held in London on 2 April 2009 called for "[setting] guidelines for, and support the establishment, functioning of, and participation in, supervisory colleges, including through ongoing identification of the most systemically important cross-border firms".

Amendment  21

Proposal for a regulation

Recital 22

Text proposed by the Commission

Amendment

(22) In order to ensure efficient and effective supervision and a balanced consideration of the positions of the competent authorities in different Member States, the Authority should be able to settle disagreements between those competent authorities with binding effect, including within colleges of supervisors. A conciliation phase should be provided for, during which the competent authorities may reach an agreement. The Authority's competence should cover disagreements on procedural obligations in the cooperation process as well as on the interpretation and application of Community law in supervisory decisions. Existing conciliation mechanisms provided for in sectoral legislation have to be respected. In the event of inaction by the national supervisory authorities concerned, the Authority should be empowered to adopt, as a last resort, decisions directly addressed to financial market participants in areas of Community law directly applicable to them.

(22) In order to ensure efficient and effective supervision and a balanced consideration of the positions of the competent authorities in different Member States, the Authority should be able to settle disagreements between those competent authorities with binding effect, including within colleges of supervisors. A conciliation phase should be provided for, during which the competent authorities may reach an agreement. The Authority's competence should cover disagreements on procedural obligations in the cooperation process as well as on the interpretation and application of Union law in supervisory decisions. Existing conciliation mechanisms provided for in sectoral legislation have to be respected. In the event of inaction by the national supervisory authorities concerned, the Authority should be empowered to adopt, as a last resort, decisions directly addressed to financial market participants in areas of Union law directly applicable to them. This also applies to disagreements within a college of supervisors.

Amendment  22

Proposal for a regulation

Recital 22 a (new)

Text proposed by the Commission

Amendment

 

(22a) The crisis has exposed major fault lines in existing approaches to supervision of cross-border financial institutions, particularly the biggest and/or most complex institutions the bankruptcy of which is capable of producing systemic damages. Those fault lines arise from the different areas of activity of the financial institutions and from the supervisory bodies on the other. The former act in a market without borders, the latter check on a daily basis whether their jurisdictions end at national borders.

Amendment  23

Proposal for a regulation

Recital 22 b (new)

Text proposed by the Commission

Amendment

 

(22b) The cooperation mechanism used to solve that asymmetry has clearly been shown to be insufficient. There are two possible solutions to solve that asymmetry: to give more power to host country supervisors (the national solution) or to create a genuine alternative Union authority (the Union solution). As the Turner Review, published in March 2009, states: "sounder arrangements require either increased national powers, implying a less open single market, or a greater degree of European integration".

Amendment  24

Proposal for a regulation

Recital 22 c (new)

Text proposed by the Commission

Amendment

 

(22c) Under the national solution, the host country should be able to refuse local branches the right to operate, to oblige foreign institutions to act only through the subsidiaries and not through branches and to oversee the capital and liquidity of institutions operating in their country, which would amount to more protectionism.

Amendment  25

Proposal for a regulation

Recital 22 d (new)

Text proposed by the Commission

Amendment

 

(22d) Under the Union solution, the colleges of supervisors supervising cross-border institutions should be reinforced and there should be a progressive shift of supervisory powers over institutions meeting the systemic risk criteria to a Union authority. Systemic institutions should comprise cross-border or nationally operating financial institutions whose bankruptcy could threaten the stability of the Union's single financial market..

Amendment  26

Proposal for a regulation

Recital 22 e (new)

Text proposed by the Commission

Amendment

 

(22e) The colleges of supervisors should have the power to define supervisory rules to foster the coherent application of Union law. The Authority should have full participation rights in colleges of supervisors with a view to streamlining the functioning of the information exchange process and to foster convergence and consistency across colleges in the application of Union law. The Authority should act as leader in supervising cross-border financial institutions operating in the Union. The Authority should also have a binding mediation role to solve conflicts between national supervisors.

Amendment  27

Proposal for a regulation

Recital 22 f (new)

Text proposed by the Commission

Amendment

 

(22f) The colleges of supervisors should play an important role in the efficient, effective and consistent supervision of cross-border financial institutions that are not systemic institutions, but where differences between national standards and practices subsist. It is not enough to converge basic financial regulations if the supervision practices remain fragmented. As the de Larosière Report points out, "competition distortions and regulatory arbitrage stemming from different supervisory practices must be avoided, because they have the potential of undermining financial stability – inter alia by encouraging a shift of financial activity to countries with lax supervision. The supervisory system has to be perceived as fair and balanced".

Amendment  28

Proposal for a regulation

Recital 23

Text proposed by the Commission

Amendment

(23) Colleges of supervisors play an important role in the efficient, effective and consistent supervision of financial market participants operating across borders. The Authority should have full participation rights in colleges of supervisors with a view to streamlining the functioning of and the information exchange process in colleges and to foster convergence and consistency across colleges in the application of Community law.

deleted

Amendment  29

Proposal for a regulation

Recital 23 a (new)

Text proposed by the Commission

Amendment

 

(23a) The prudential supervision of systemic institutions should be entrusted to the Authority. National supervisors should act as agents of the Authority and should be bound to the Authority's instructions when they supervise systemic institutions.

Amendment  30

Proposal for a regulation

Recital 23 b (new)

Text proposed by the Commission

Amendment

 

(23b) A new framework for financial crisis management should therefore be established because the existing mechanism for ensuring the stability of the financial system does not work. Key elements of crisis management are a common set of rules and financial resolution vehicles (execution and funding to deal with the crisis of large, cross-border and/or systemic institutions).

Amendment  31

Proposal for a regulation

Recital 23 c (new)

Text proposed by the Commission

Amendment

 

(23c) The systemic institutions should be identified, taking into account international standards, in particular those established by the Financial Stability Board, the International Monetary Fund and the International Association of Insurance Supervisors (IAIS) and the G20. Interconnectedness, substitutability and timing are the most commonly used criteria for the identification of systemic institutions.

Amendment  32

Proposal for a regulation

Recital 23 d (new)

Text proposed by the Commission

Amendment

 

(23d) A European Stability Fund should be established to finance the orderly winding-up or rescue interventions of systemic institutions facing difficulties, the impact of which would threaten the financial stability of the Union´s single financial market. The Fund should be financed through adequate contributions from the financial sector. The contributions to the Fund should replace those made to the national funds of similar nature.

Amendment  33

Proposal for a regulation

Recital 24

Text proposed by the Commission

Amendment

(24) The delegation of tasks and responsibilities can be a useful instrument in the functioning of the network of supervisors in order to reduce the duplication of supervisory tasks, foster cooperation and thereby streamline the supervisory process as well as reduce the burden imposed on financial institutions. The Regulation should therefore provide a clear legal basis for such delegation. Delegation of tasks means that tasks are carried out by another supervisory authority instead of the responsible authority, while the responsibility for supervisory decisions remains with the delegating authority. By delegation of responsibilities one national supervisory authority, the delegatee, shall be able to decide upon a certain supervisory matter in its name in lieu of another national supervisory authority. Delegations should be governed by the principle of allocating supervisory competence to a supervisor which is well placed to take action in the subject matter. A reallocation of responsibilities can be appropriate for example for reasons of economies of scale or scope, of coherence in group supervision, and of optimal use of technical expertise among national supervisory authorities. Relevant Community legislation may further specify the principles for reallocation of responsibilities upon agreement. The Authority should facilitate delegation agreements between national supervisory authorities by all appropriate means. It should be informed in advance of intended delegation agreements to be able to express an opinion where appropriate. It should centralise the publication of such agreements to ensure timely, transparent and easily accessible information about agreements for all parties concerned.

(24) The delegation of tasks and responsibilities can be a useful instrument in the functioning of the network of supervisors in order to reduce the duplication of supervisory tasks, foster cooperation and thereby streamline the supervisory process as well as reduce the burden imposed on financial institutions. The Regulation should therefore provide a clear legal basis for such delegation. Delegation of tasks means that tasks are carried out by another supervisory authority instead of the responsible authority, while the responsibility for supervisory decisions remains with the delegating authority. By delegation of responsibilities one national supervisory authority, the delegatee, shall be able to decide upon a certain supervisory matter in its name in lieu of another national supervisory authority. Delegations should be governed by the principle of allocating supervisory competence to a supervisor which is well placed to take action in the subject matter. A reallocation of responsibilities can be appropriate for example for reasons of economies of scale or scope, of coherence in group supervision, and of optimal use of technical expertise among national supervisory authorities. Relevant EU legislation may further specify the principles for reallocation of responsibilities upon agreement. The Authority should facilitate and monitor delegation agreements between national supervisory authorities by all appropriate means. It should be informed in advance of intended delegation agreements to be able to express an opinion where appropriate. It should centralise the publication of such agreements to ensure timely, transparent and easily accessible information about agreements for all parties concerned. It should identify and disseminate best practices regarding delegation and delegation agreements.

Amendment  34

Proposal for a regulation

Recital 26

Text proposed by the Commission

Amendment

(26) Peer reviews are an efficient and effective tool for fostering consistency within the network of financial supervisors. The Authority should therefore develop the methodological framework for such reviews and conduct them on a regular basis. Reviews should focus not only on convergence of supervisory practices but also on the capacity of supervisors to achieve high quality supervisory outcomes as well as the independence of competent authorities.

(26) Peer reviews are an efficient and effective tool for fostering consistency within the network of financial supervisors. The Authority should therefore develop the methodological framework for such reviews and conduct them on a regular basis. Reviews should focus not only on convergence of supervisory practices but also on the capacity of supervisors to achieve high quality supervisory outcomes as well as the independence of competent authorities. The outcome of peer reviews should be made public and best practices should be identified and also made public.

Amendment  35

Proposal for a regulation

Recital 27

Text proposed by the Commission

Amendment

(27) The Authority should actively promote a coordinated Community supervisory response, in particular where adverse developments could potentially jeopardise the orderly functioning and integrity of financial markets or the stability of the financial system in the Community. In addition to its powers for action in emergency situations, it should therefore be entrusted with a general coordination function within the European System of Financial Supervisors. The smooth flow of all relevant information between competent authorities should be a particular focus of the Authority's actions.

(27) The Authority should actively promote a coordinated Union supervisory response, in particular to ensure the orderly functioning and integrity of financial markets or the stability of the financial system in the Union. In addition to its powers for action in emergency situations, it should therefore be entrusted with a general coordination function. The smooth flow of all relevant information between competent authorities should be a particular focus of the Authority's actions.

Amendment  36

Proposal for a regulation

Recital 28

Text proposed by the Commission

Amendment

(28) In order to safeguard financial stability it is necessary to identify, at an early stage, trends, potential risks and vulnerabilities stemming from the micro-prudential level, across borders and across sectors. The Authority should monitor and assess such developments in the area of its competence and, where necessary, inform the European Parliament, the Council, the Commission, the other European Supervisory Authorities and the European Systemic Risk Board on a regular and, as necessary, ad hoc basis. The Authority should also coordinate Community-wide stress tests to assess the resilience of financial market participants to adverse market developments, ensuring an as consistent as possible methodology is applied at the national level to such tests.

(28) In order to safeguard financial stability it is necessary to identify, at an early stage, trends, potential risks and vulnerabilities stemming from the micro-prudential level, across borders and across sectors. The Authority should monitor and assess such developments in the area of its competence and, where necessary, inform the European Parliament, the Council, the Commission, the other European Supervisory Authorities and the European Systemic Risk Board on a regular and, as necessary, ad hoc basis. The Authority should also initiate and coordinate Union-wide stress tests to assess the resilience of financial market participants to adverse market developments, ensuring an as consistent as possible methodology is applied at the national level to such tests. In order to inform the discharge of its functions, the Authority should conduct economic analyses of the markets and the impact of potential market developments.

Justification

The use of economic analysis will allow the ESA to make more informed decisions on the impact of its actions on the wider market, and the impact of wider market events on its actions. This is in line with best practice at member state level.

Amendment  37

Proposal for a regulation

Recital 29

Text proposed by the Commission

Amendment

(29) Given the globalisation of financial services and the increased importance of international standards, the Authority should foster the dialogue and cooperation with supervisors outside the Community. It shall fully respect the existing roles and competences of the European Institutions in relations with authorities outside the Community and in international forums.

(29) Given the globalisation of financial services and the increased importance of international standards, the Authority should represent the Union in the dialogue and cooperation with supervisors outside the Union.

Amendment  38

Proposal for a regulation

Recital 31

Text proposed by the Commission

Amendment

(31) In order to effectively carry out its duties, the Authority should have the right to request all necessary information. To avoid duplication of reporting obligations for financial market participants, that information should normally be provided by the national supervisory authorities who are closest to financial markets and market participants. However, the Authority should have the power to request information directly from financial market participants and other parties where a national competent authority does not or cannot provide such information in a timely fashion. Member States' authorities should be obliged to assist the Authority in enforcing such direct requests.

(31) In order to effectively carry out its duties, the Authority should have the right to request all necessary information. To avoid duplication of reporting obligations for financial market participants, that information should normally be provided by the national supervisory authorities who are closest to financial markets and market participants, subject to the requirement that confidential information is not made available to bodies or authorities that are not entitled to it. However, the Authority should have the power to request information directly from financial market participants and other parties where a national competent authority does not or cannot provide such information in a timely fashion. Member States' authorities should be obliged to assist the Authority in enforcing such direct requests.

Amendment  39

Proposal for a regulation

Recital 32

Text proposed by the Commission

Amendment

(32) Close cooperation between the Authority and the European Systemic Risk Board is essential to give full effectiveness to the functioning of the European Systemic Risk Board and the follow-up to its warnings and recommendations. The Authority should share any relevant information with the European Systemic Risk Board. Data related to individual undertakings should be provided only upon reasoned request. Upon receipt of warnings or recommendations addressed by the European Systemic Risk Board to the Authority or a national supervisory authority, the Authority should take immediate action and ensure follow-up.

(32) Close cooperation between the Authority and the European Systemic Risk Board is essential to give full effectiveness to the functioning of the European Systemic Risk Board and the follow-up to its warnings and recommendations. The Authority should share any relevant information with the European Systemic Risk Board. Data related to individual undertakings should be provided only upon reasoned request. Upon receipt of warnings or recommendations addressed by the European Systemic Risk Board to the Authority or a national supervisory authority, the Authority should, as appropriate, ensure follow-up.

Amendment  40

Proposal for a regulation

Recital 33

Text proposed by the Commission

Amendment

(33) Where appropriate, the Authority should consult interested parties on technical standards, guidelines and recommendations and provide them with a reasonable opportunity to comment on proposed measures. For reasons of efficiency, a Securities and Markets Stakeholder Group should be established for that purpose, representing in balanced proportions Community financial market participants (including as appropriate institutional investors and other financial institutions which themselves use financial services), their employees, and consumers and other retail users of financial services, including SMEs. The Securities and Markets Stakeholder Group should actively work as an interface with other user groups in the financial services area established by the Commission or Community legislation.

(33) The Authority should consult interested parties on technical standards, guidelines and recommendations and provide them with a reasonable opportunity to comment on proposed measures. Before adopting draft regulatory standards, guidelines and recommendations the Authority should carry out an impact study. For reasons of efficiency, a Securities and Markets Stakeholder Group should be established for that purpose, representing in balanced proportions Union financial market participants (including as appropriate institutional investors and other financial institutions which themselves use financial services), their employees, academia and consumers and other retail users of financial services, including SMEs. The Securities and Markets Stakeholder Group should actively work as an interface with other user groups in the financial services area established by the Commission or by EU legislation.

Amendment  41

Proposal for a regulation

Recital 33 a (new)

Text proposed by the Commission

Amendment

 

(33a) Non-profit organisations are marginalised in the debate on the future of financial services and in the corresponding decision making process in comparison to well-funded and well- connected industry representatives. That disadvantage should be compensated for by adequate funding of their representatives in the Securities and Market Stakeholder Group.

Amendment  42

Proposal for a regulation

Recital 34

Text proposed by the Commission

Amendment

(34) Member States have a core responsibility in preserving financial stability in crisis management, in particular with regard to stabilising and resolving individual ailing financial market participants. Measures by the Authority in emergency or settlement situations affecting the stability of a financial market participant should not impinge on the fiscal responsibilities of Member States. A mechanism should be established whereby Member States may invoke this safeguard and ultimately bring the matter before the Council for decision. It is appropriate to confer on the Council a role in this matter given the particular responsibilities of the Member States in this respect.

(34) Member States have a core responsibility for ensuring coordinated crisis management and in preserving financial stability in crisis situations, in particular with regard to stabilising and resolving individual ailing financial market participants. Measures by the Authority in emergency or settlement situations affecting the stability of a financial market participant should not impinge on the fiscal responsibilities of Member States. A mechanism should be established whereby Member States may invoke this safeguard and ultimately bring the matter before the Council for decision. It is appropriate to confer on the Council a role in this matter given the particular responsibilities of the Member States in this respect.

Amendment  43

Proposal for a regulation

Recital 34 a (new)

Text proposed by the Commission

Amendment

 

(34a) Without prejudice to the particular responsibilities of the Member States in crisis situations it is evident that should a Member State choose to invoke the safeguard the European Parliament should be informed at the same time as the Authority, the Council and the Commission. Furthermore the Member State should explain its reasons for invoking the safeguard. The Authority should, in cooperation with the Commission, set out the next steps to be taken.

Amendment  44

Proposal for a regulation

Recital 34 a (new)

Text proposed by the Commission

Amendment

 

(34a) Within three years from the entry into force of a regulation establishing such a mechanism, clear and sound guidance on when the safeguard is triggered by Member States should be laid down at Union level by the Commission on the basis of the experience acquired. Member States´ use of the safeguard clause should be assessed against that guidance.

Justification

The Commission’ proposal lacks guidance as to when a decision would impinge on national fiscal responsibilities. Legal certainty underlying the concept of “fiscal responsibility” must be provided to ensure a level playing field for the national authorities and financial market participants across the EU. Clear guidance on when an impingement on the fiscal responsibility may be claimed must be commonly defined and agreed upon. In the future, in their justification and impact assessment, Member States shall demonstrate that their respective case falls within the scope of the guidance.

Amendment  45

Proposal for a regulation

Recital 36

Text proposed by the Commission

Amendment

(36) A Board of Supervisors composed of the heads of the relevant competent authority in each Member State, and chaired by the Chairperson of the Authority, should be the principal decision-making organ of the Authority. Representatives of the Commission, the European Systemic Risk Board and the other two European Supervisory Authorities should participate as observers. Members of the Board of Supervisors should act independently and only in the Community's interest. For acts of a general nature, including those related to the adoption of technical standards, guidelines and recommendations as well as budgetary matters, it is appropriate to apply the rules on qualified majority as laid down in the Treaty, whereas for all other decisions simple majority of members should apply. Cases concerning the settlement of disagreements between national supervisory authorities should be examined by a restricted panel.

(36) A Board of Supervisors composed of the heads of the relevant competent authority in each Member State, and chaired by the Chairperson of the Authority, should be the principal decision-making organ of the Authority. Representatives of the Commission, the European Systemic Risk Board, the European Supervisory Authority (Insurance and Pensions) and the European Supervisory Authority (Banking) should participate as observers. Members of the Board of Supervisors should act independently and only in the Union's interest. For acts of a general nature, including those related to the adoption of technical standards, guidelines and recommendations as well as budgetary matters, it is appropriate to apply the rules on qualified majority as laid down in Article 16 of the Treaty on European Union, whereas for all other decisions simple majority of members should apply. Cases concerning the settlement of disagreements between national supervisory authorities should be examined by a restricted panel.

Amendment  46

Proposal for a regulation

Recital 38

Text proposed by the Commission

Amendment

(38) A full time Chairperson, selected by the Board of Supervisors through an open competition, should represent the Authority. The management of the Authority should be entrusted to an Executive Director, who should have the right to participate in meetings of the Board of Supervisors and the Management Board without the right to vote.

(38) A full time Chairperson, appointed by the European Parliament following an open selection procedure managed by the Board of Supervisors, should represent the Authority. The management of the Authority should be entrusted to an Executive Director, who should have the right to participate in meetings of the Board of Supervisors and the Management Board without the right to vote.

Amendment  47

Proposal for a regulation

Recital 39

Text proposed by the Commission

Amendment

(39) In order to ensure cross-sectoral consistency in the activities of the European Supervisory Authorities, those authorities should coordinate closely in a Joint Committee of European Supervisory Authorities and reach common positions where appropriate. The Joint Committee of European Supervisory Authorities should assume all of the functions of the Joint Committee on Financial Conglomerates. Where relevant, acts also falling within the area of competence of the European Insurance and Occupational Pensions Authority or the European Banking Authority should be adopted in parallel by the European Supervisory Authorities concerned.

(39) In order to ensure cross-sectoral consistency in the activities of the European Supervisory Authorities, those authorities should coordinate closely through the European Supervisory Authorities (Joint Committee) (the "Joint Committee") and reach common positions where appropriate. The Joint Committee should coordinate the functions of the three European Supervisory Authorities in relation to financial conglomerates. Where relevant, acts also falling within the area of competence of the European Supervisory Authority (Banking) or the European Supervisory Authority (Insurance and Occupational Pensions) should be adopted in parallel by the European Supervisory Authorities concerned. The Joint Committee should be chaired for a 12-month term on a rotating basis by the Chairpersons of the three European Supervisory Authorities. The Chairperson of the Joint Committee should be a Vice-Chair of the ESRB. The Joint Committee should have a permanent secretariat, staffed on secondment from the three European Supervisory Authorities, to allow for informal information-sharing and the development of a common cultural approach across the three European Supervisory Authorities.

Amendment  48

Proposal for a regulation

Recital 41

Text proposed by the Commission

Amendment

(41) In order to guarantee its full autonomy and independence, the Authority should be granted an autonomous budget with revenues mainly from obligatory contributions from national supervisory authorities and from the General Budget of the European Union. The Community budgetary procedure should be applicable as far as the Community contribution is concerned. The auditing of accounts should be undertaken by the Court of Auditors.

(41) In order to guarantee its full autonomy and independence, the Authority should be granted an autonomous budget with revenues mainly from obligatory contributions from national supervisory authorities and from the General Budget of the European Union through a separate budget heading within it. Union financing of the Authority is subject to an agreement by the budgetary authority in accordance with Point 47 of the Interinstitutional Agreement between the European Parliament, the Council and the Commission of 17 May 2006 on budgetary discipline and sound financial management1 (IIA). The Union budgetary procedure should be applicable as far as the European Union contribution is concerned. The auditing of accounts should be undertaken by the Court of Auditors.

 

1 OJ ....

Justification

Under the Commission proposals, the ESAs’ budget would be part of the Commission budget. To enhance the independence of the ESAs it would be better to identify a separate and specific budget line for the ESAs in the overall EU Budget. Therefore it is proposed, also to enable the authorities to achieve their ambitions, to provide for an independent budget line as has been done for the Data Protection Supervisor (see: Regulation No 45/2001 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).

Amendment  49

Proposal for a regulation

Article 1 – paragraph 1

Text proposed by the Commission

Amendment

1.        This Regulation establishes a European Securities and Markets Authority ("the Authority").

1.        This Regulation establishes a European Supervisory Authority (Securities and Markets) ("the Authority").

Amendment  50

Proposal for a regulation

Article 1 – paragraph 2

Text proposed by the Commission

Amendment

2.        The Authority shall act within the scope of Directive 97/9/EC, Directive 98/26/EC, Directive 2001/34/EC, Directive 2002/47/EC, Directive 2002/87/EC, Directive 2003/6/EC, Directive 2003/71/EC, Directive 2004/25/EC, Directive 2004/39/EC, Directive 2004/109/EC, Directive 2005/60/EC, Directive 2009/65/EC, Directive 2002/65/EC, Directive 2006/49/EC (without prejudice to the competence of the European Banking Authority in terms of prudential supervision), Directive … [future AIFM Directive], and Regulation … [future CRA Regulation], including all directives, regulations, and decisions based on these acts, and of any further Community act which confers tasks on the Authority.

2.        The Authority shall act within the scope of this Regulation and the Directive 97/9/EC, Directive 98/26/EC, Directive 2001/34/EC, Directive 2002/47/EC, Directive 2002/87/EC, Directive 2003/6/EC, Directive 2003/71/EC, Directive 2004/25/EC, Directive 2004/39/EC, Directive 2004/109/EC, Directive 2005/60/EC, Directive 2009/65/EC, Directive 2002/65/EC, Directive 2006/49/EC (without prejudice to the competence of the European Authority (Banking ) in terms of prudential supervision), Directive ... [future AIFM Directive], and Regulation ... [future CRA Regulation], including all directives, regulations, and decisions based on these acts, and of any further Union legislative act which confers tasks on the Authority.

Amendment  51

Proposal for a regulation

Article 1 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a.      The Authority shall also act in the field of activities of credit institutions, financial conglomerates, investment firms, payment institutions and e-money institutions, including matters of shareholder rights, corporate governance, auditing, financial reporting, in order to ensure the effective and consistent application of the legislation referred to in paragraph 2. The Authority shall also take appropriate action in the context of takeover bids, clearing and settlement issues, securitisation, short selling and derivative issues including standardisation.

Amendment  52

Proposal for a regulation

Article 1 – paragraph 3

Text proposed by the Commission

Amendment

3.        The provisions of this Regulation are without prejudice to the powers of the Commission, in particular under Article 226 of the Treaty to ensure compliance with Community law.

3.        The provisions of this Regulation are without prejudice to the powers of the Commission, in particular under Article 258 of the Treaty on the Functioning of the European Union to ensure compliance with Union law

Amendment  53

Proposal for a regulation

Article 1 – paragraph 4

Text proposed by the Commission

Amendment

4.        The objective of the Authority shall be to contribute to:

4. The objective of the Authority shall be to protect public values such as the short, medium and long term stability of the financial system, the solvency and liquidity of financial institutions, the transparency of markets and financial products and the protection of depositors and investors. The Authority shall contribute to:

(i) improving the functioning of the internal market, including in particular a high, effective and consistent level of regulation and supervision,

(i) improving the functioning and competitiveness of the internal market, including in particular a high, effective and consistent level of regulation and supervision,

(ii) protecting protect investors,

(ii) enhancing competition and innovation within the internal market and fostering global competitiveness,

 

(iia) promoting financial inclusion

(iii) ensuring the integrity, efficiency and orderly functioning of financial markets,

(iii) ensuring the integrity, transparency, efficiency and orderly functioning of financial markets,

(iv) safeguarding the stability of the financial system, and

 

v) strengthening international supervisory coordination.

(iv) strengthening international supervisory coordination,

 

(v) supporting the European Union's new strategy for jobs and growth,

 

(vi) preventing regulatory arbitrage and contribute to a level playing field, (vii) precluding the generation of future credit bubbles from the financial institutions in the EU, and

 

(viii) developing common methodologies for assessing the effect of product characteristics and distribution processes on the financial position of institutions and on customer protection.

(For this purpose, the Authority shall contribute to ensuring the consistent, efficient and effective application of the Community law referred to in Article 1(2) above, fostering supervisory convergence and providing opinions to the European Parliament, the Council, and the Commission.

For those purposes, the Authority shall contribute to ensuring the consistent, efficient and effective application of the Union legislation referred to in Article 1(2), fostering supervisory convergence and providing opinions to the European Parliament, the Council, and the Commission and undertaking economic analyses of markets to promote the achievement of the Authority's objective.

Amendment  54

Proposal for a regulation

Article 1 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a.      In the exercise of the tasks conferred upon it by this Regulation, the Authority shall pay particular attention to the systemic institutions which failure or malfunction may impair the operation of the financial system or the real economy.

Amendment  55

Proposal for a regulation

Article 1 – paragraph 5

Text proposed by the Commission

Amendment

5.        The Authority shall form part of a European System of Financial Supervisors, hereinafter referred to as 'ESFS', which shall function as a network of supervisors, as further specified in Article 39.

deleted

Amendment  56

Proposal for a regulation

Article 1 – paragraph 6

Text proposed by the Commission

Amendment

6.        The European Securities and Markets Authority shall co-operate with the European Systemic Risk Board, hereinafter referred to as 'ESRB' as laid down in Article 21 of this Regulation.

deleted

Amendment  57

Proposal for a regulation

Article 1 a (new)

Text proposed by the Commission

Amendment

 

Article 1a

The European System of Financial Supervision

 

1.        The Authority shall form part of a European System of Financial Supervision (ESFS). The main objective of the ESFS shall be to ensure that the rules applicable to the financial sector are adequately implemented in order to preserve financial stability and thereby to ensure confidence in the financial system as a whole and sufficient protection for the customers of financial services.

 

2.        The ESFS shall comprise the following:

 

(a) the European Systemic Risk Board;

 

(b) the European Supervisory Authority (Banking) established by Regulation (EU) No .../ 2010 [EBA];

 

(c) the European Supervisory Authority (Insurance and Occupational Pensions) established by Regulation (EU) No …/2010[EIOPA];

 

(d) the European Supervisory Authority (Securities and Markets) established by this Regulation;

 

(e) the European Supervisory Authority (Joint Committee) established by Article 40;

 

(f) the authorities in the Member States referred to in Article 1(2) of Regulations (EU) No .../ 2010. [ESMA], Regulation (EU) No …/2010 [EIOPA] and Regulation (EU) No …/2010 [EBA];

 

(g) the Commission, for the purposes of carrying out the tasks referred to in Articles 7 and 9;

 

3.        The Authorities forming part of the ESFS, including the competent authorities of the Member States, shall be accountable to the European Parliament without prejudice to the accountability of Member States' competent authorities to national parliaments.

 

4.        The Authority shall cooperate regularly and closely, ensure cross-sectoral consistency of work and arrive at joint positions in the area of supervision of financial conglomerates and on other cross-sectoral issues with the European Systemic Risk Board as well as with the European Supervisory Authority (Insurance and Occupational Pensions) and the European Supervisory Authority (Banking) through the Joint Committee referred to in Article 40.

 

5.        In accordance with the principle of sincere cooperation under Article 4(3) of the Treaty on European Union, the parties of the ESFS shall cooperate with trust and full mutual respect, in particular in ensuring that appropriate and reliable information flows between them.

 

6.        Only those supervisory authorities included in the ESFS shall be entitled to supervise financial institutions operating in the European Union.

Amendment  58

Proposal for a regulation

Article 2 – paragraph 1

Text proposed by the Commission

Amendment

(1)       'financial market participant' means any person in relation to whom a requirement in the legislation referred to in Article 1(2) or a national law implementing such legislation applies.

(1)       'financial institutions' means 'credit institutions' as defined in Directive 2006/48/EC, 'investment firms' as defined in Directive 2006/49/EC, and 'financial conglomerates' as defined in Directive 2002/87/EC, and any other undertaking or entity operating in the European Union, whose business is of a similar nature, even if they have no direct dealings with the public at large, including public banks and development banks. However, with regard to Directive 2005/60/EC, ‘financial institutions’ means only credit and financial institutions as defined in that Directive;

Amendment  59

Proposal for a regulation

Article 2 – paragraph 1 – point 2

Text proposed by the Commission

Amendment

(2)       'key financial market participant' means a financial market participant, whose regular activity or financial viability has or is likely to have a significant effect on the stability, integrity, or efficiency of the financial markets in the Community.

deleted

Amendment  60

Proposal for a regulation

Article 2 – paragraph 1 – point 3

Text proposed by the Commission

Amendment

(3)       'competent authorities' means competent authorities and/or supervisory authorities as defined in the legislation referred to in Article 1(2). Bodies which administer national compensation schemes pursuant to Directive 97/9/EC shall also be considered as competent authorities.

(3)       'competent authorities' means competent authorities as defined in Directives 2006/48/EC and 2006/49/EC and, where deposit guarantee schemes are concerned, bodies which administer deposit-guarantee schemes pursuant to Directive 94/19/EC, or where the operation of the deposit guarantee scheme is administered by a private company, the public authority supervising that scheme pursuant to Directive 94/19/EC.

Amendment  61

Proposal for a regulation

Article 3 – paragraph 1

Text proposed by the Commission

Amendment

1.        The Authority shall be a Community body with legal personality.

1.        The Authority shall be a Union body with legal personality.

Amendment  62

Proposal for a regulation

Article 5

Text proposed by the Commission

Amendment

The Authority shall have its seat in Paris.

The Authority shall have its seat in Frankfurt.

Amendment  63

Proposal for a regulation

Article 6 – paragraph 1 – points (a) and (b)

Text proposed by the Commission

Amendment

(a) contribute to the establishment of high quality common regulatory and supervisory standards and practices, in particular by providing opinions to the Community institutions and by developing guidelines, recommendations, and draft technical standards which shall be based on the legislation referred to in Article 1(2);

(a) contribute to the establishment of high- quality common regulatory and supervisory standards and practices, in particular by providing opinions to the Union institutions and by developing guidelines, recommendations, and draft regulatory and implementing standards which shall be based on the legislative acts referred to in Article 1(2);

(b)       contribute to a consistent application of Community legislation, in particular by contributing to a common supervisory culture, ensuring consistent, efficient and effective application of the legislation referred to in Article 1(2), preventing regulatory arbitrage, mediating and settling disagreements between competent authorities, promoting a coherent functioning of colleges of supervisors and taking actions in emergency situations;

(b)       contribute to a consistent application of Union legislative acts, in particular by contributing to a common supervisory practice, ensuring consistent, efficient and effective application of the legislation referred to in Article 1(2), preventing regulatory arbitrage, mediating and settling disagreements between competent authorities, ensuring effective and consistent supervision of financial institutions and ensuring a coherent functioning of colleges of supervisors and taking actions, inter alia, in emergency situations;

Amendment  64

Proposal for a regulation

Article 6 – paragraph 1 – point (c)

Text proposed by the Commission

Amendment

(c)       facilitate the delegation of tasks and responsibilities between competent authorities;

(c)       stimulate and facilitate the delegation of tasks and responsibilities between competent authorities;

Amendment  65

Proposal for a regulation

Article 6 – paragraph 1 – point (e)

Text proposed by the Commission

Amendment

(e)       conduct peer review analysis of competent authorities, to strengthen consistency in supervisory outcomes;

(e)       organise and conduct peer review analysis of competent authorities, to strengthen consistency in supervisory outcomes;

Amendment  66

Proposal for a regulation

Article 6 – paragraph 1 – point (f) a (new)

Text proposed by the Commission

Amendment

 

(fa)     undertake economic analyses of markets to inform the discharge of the Authority's functions;

Amendment  67

Proposal for a regulation

Article 6 – paragraph 1 – point (f) b (new)

Text proposed by the Commission

Amendment

 

(fb)     foster depositor and investor protection;

Amendment  68

Proposal for a regulation

Article 6 – paragraph 1 – point (f) c (new)

Text proposed by the Commission

Amendment

 

(fc)      act as the competent body to manage crisis of cross border institutions that has the potential to pose a systemic risk referred to in Article 12b, leading and executing all early interventions, resolution or insolvency procedures for such institutions through its Resolution Unit as set out in Article 12c;

Amendment  69

Proposal for a regulation

Article 6 – paragraph 1 – point (g)

Text proposed by the Commission

Amendment

(g)       fulfil any other specific tasks set out in this Regulation or in the Community legislation referred to in Article 1(2).

(g)       fulfil any other specific tasks set out in this Regulation or in the Union legislative acts referred to in Article 1(2);

Amendment  70

Proposal for a regulation

Article 6 – paragraph 1 – point (g) a (new)

Text proposed by the Commission

Amendment

 

(ga)     supervise those financial institutions that are not subject to the supervision of competent authorities;

Amendment  71

Proposal for a regulation

Article 6 – paragraph 1 – point (g) b (new)

Text proposed by the Commission

Amendment

 

(gb)     provide a database of registered financial institutions in the area of its competence and, where specified in the legislative acts referred to in Article 1(2), at a central level;

Amendment  72

Proposal for a regulation

Article 6 – paragraph 2 – point (a)

Text proposed by the Commission

Amendment

(a)       develop draft technical standards in the specific cases referred to in Article 7;

(a)       develop draft regulatory standards in the specific cases referred to in Article 7;

Amendment  73

Proposal for a regulation

Article 6 – paragraph 2 – point (a) a (new)

Text proposed by the Commission

Amendment

 

(aa)     develop draft implementing standards in the specific cases referred to in Article 7e;

Amendment  74

Proposal for a regulation

Article 6 – paragraph 2 – point (e)

Text proposed by the Commission

Amendment

(e)       take individual decisions addressed to financial market participants, in the specific cases referred to in Article 9(6), Article 10(3), and Article 11(4);

(e)       take individual decisions addressed to financial institutions, in the specific cases referred to in Article 9(6), Article 10(3), and Article 11(4);

Amendment  75

Proposal for a regulation

Article 6 – paragraph 2 – point (f) a (new)

Text proposed by the Commission

Amendment

 

(fa)     collect directly the necessary information concerning financial institutions;

Amendment  76

Proposal for a regulation

Article 6 – paragraph 2 – point f b (new)

Text proposed by the Commission

Amendment

 

(fb)     temporarily prohibit certain types of transactions that threaten the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Union;

Amendment  77

Proposal for a regulation

Article 6 – paragraph 2 – point f c (new)

Text proposed by the Commission

Amendment

 

(fc)      develop a regulatory standard setting out the minimum information to be made available to the Authority about transactions and financial institutions, how the coordination of collection is to be carried out and how existing national databases are to be linked in order to ensure that the Authority is always able to access the relevant and necessary information concerning transactions and market participants within its competence under the legislative acts set out in Article 1(2);

Amendment  78

Proposal for a regulation

Article 6 – paragraph 2 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

The Authority shall review decision taken under point (fb) of subparagraph 1 at regular intervals.

Amendment  79

Proposal for a regulation

Article 6 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

3.        The Authority shall execute any exclusive supervisory powers over entities with Community-wide reach or economic activities with Community-wide reach entrusted to it in the legislation referred to in Article 1(2).

3.        The Authority shall execute any exclusive European supervisory powers over entities with Union-wide reach or economic activities entrusted to it in the legislation referred to in Article 1(2).

Amendment  80

Proposal for a regulation

Article 6 – paragraph 3 – subparagraph 2

Text proposed by the Commission

Amendment

For that purpose, the Authority shall have appropriate powers of investigation and enforcement as specified in the relevant legislation, as well as the possibility of charging fees.

For the purpose of exercising its exclusive supervisory powers under paragraph 3, the Authority shall have appropriate powers of investigation and enforcement as specified in the relevant legislation, as well as the possibility of charging fees. The Authority shall work in close cooperation with the competent authorities and build on their expertise, facilities and powers to carry out its tasks.

Amendment  81

Proposal for a regulation

Article 6 a (new)

Text proposed by the Commission

Amendment

 

Article 6a

 

Powers of the competent authorities that are members of the Authority

 

In order to achieve the objectives of the Authority, competent authorities that are and members of the Authority, shall have powers to adopt preventative and correcting supervisory measures, including, where related to financial institutions and exercised proportionately, the power to:

 

(a) demand and receive adequate information;

 

(b) impose reporting and disclosure requirements;

 

(c) carry out on-site inspections.

 

(d) adopt prudential measures, including those affecting conflicts of interest, good governance, liquidity, provisions, dividends and remuneration policies;

 

(e) split or segregate retail banking activities from trading and other non-utility activities in case of relevant risk assessed following common criteria;

 

(f) temporarily restrict or forbid certain products or types of transactions that may directly or indirectly cause excessive volatility in the markets or perturb all or part of the financial system in the Union, public finances or the real economy;

 

(g) order financial institutions to operate through a subsidiary in case of relevant internal risk assessed according to common criteria;

 

(h) impose dissuasive fines;

 

(i) disqualify managers and Directors from acting as such;

 

(j) remove executives or the Board of Directors;

 

(k) temporarily intervene in financial institutions;

 

(l) withdraw the benefits of limited liability to significant shareholders of financial institutions when they are passive in defending the corporate interest in cases such as lack of transparency, fearlessly lending or borrowing, or serious and systematic infringement;

 

(m) extend financial liability to managers, directors or financial institutions who or that cause or collaborate in serious and systematic infringements of Union law or have an inappropriate system of incentives to their services;

 

(n) require, when appropriate, declarations of managers and Directors on interest, activities and assets;

 

(o) request the development of a detailed resolution regime, to be updated regularly, comprising a structured early intervention mechanism, prompt corrective actions and a bankruptcy contingency plan;

 

(p) cancel licences and withdraw passports;

 

(q) agree on protocols to achieve a common response at Union level, as fast and automatically as possible, to prevent or correct market perturbations.

Amendment  82

Proposal for a regulation

Article 7 – paragraph 1

Text proposed by the Commission

Amendment

1.        The Authority may develop technical standards in the areas specifically set out in the legislation referred to in Article 1(2). The Authority shall submit its draft standards to the Commission for endorsement.

1.        The Authority may develop regulatory standards to complete, update or modify elements that are not essential to the legislative acts referred to in Article 1(2). The regulatory standards shall not imply strategic decisions and its content shall be delimited by the legislative acts on which they are based.

Before submitting them to the Commission, the Authority shall, where appropriate, conduct open public consultations on technical standards and analyse the potential related costs and benefits.

2.        The Authority shall conduct open public consultations on regulatory standards and analyse the potential related costs and benefits before adopting draft regulatory standards. The Authority shall also request the opinion or advice of the Securities and Markets Stakeholder Group referred to in Article 22.

 

3.        The Authority shall submit its draft regulatory standards to the Commission for endorsement and at the same time to the European Parliament and the Council.

Within three months of receipt of the draft standards, the Commission shall decide whether to endorse the draft standards. The Commission may extend that period by one month. The Commission may endorse the draft standards only in part or with amendments where the Community interest so requires.

4.        Within three months of receipt of the draft regulatory standards, the Commission shall decide whether to endorse, reject or amend the draft regulatory standards. The Commission may extend that period by one month. The Commission shall inform the European Parliament and the Council of its decision, stating the reasons.

Where the Commission does not endorse the standards or endorses them in part or with amendments, it shall inform the Authority of its reasons.

5.        The draft regulatory standards may be amended by the Commission if they are incompatible with Union law, do not respect the principle of proportionality or run counter to the fundamental principles of the single market for financial services as reflected in the Union financial services law.

Amendment  83

Proposal for a regulation

Article 7 – paragraph 2

Text proposed by the Commission

Amendment

2. The standards shall be adopted by the Commission by means of Regulations or Decisions and published in the Official Journal of the European Union.

deleted

Amendment  84

Proposal for a regulation

Article 7 a (new)

Text proposed by the Commission

Amendment

 

Article 7a

 

Exercise of the delegation

 

1.        The powers to adopt regulatory standards referred to in Article 7 shall be conferred on the Commission for an indeterminate period of time.

 

2.        The draft regulatory standards shall be adopted by the Commission in the form of regulations or decisions.

 

3.        As soon as it adopts a regulatory standard, the Commission shall notify it simultaneously to the European Parliament and to the Council.

 

4.        The power to adopt regulatory standard is conferred on the Commission subject to the conditions laid down in Articles 7b to 7d.

 

5.        In the report referred to in Article 35, the Chairperson of the Authority shall inform the European Parliament and the Council about the regulatory standards that have been approved and which competent authorities have not complied with them.

Amendment  85

Proposal for a regulation

Article 7 b (new)

Text proposed by the Commission

Amendment

 

Article 7b

 

Objections to regulatory standards

 

1.        The European Parliament or the Council may object to a regulatory standard within a period of four months from the date of notification. At the initiative of the European Parliament or the Council this period may be extended by two months.

 

2.        If on the expiry of that period, neither the European Parliament nor the Council has objected to a regulatory standard, it shall be published in the Official Journal of the European Union and shall enter into force at the date stated therein.

 

3.        Before the expiry of that period and in exceptional and duly justified cases, the European Parliament and the Council may both inform the Commission that they do not intend to raise objections to a regulatory standard. In such cases, the regulatory standard shall be published in the Official Journal of the European Union and shall enter into force at the date stated therein.

 

4.        If the European Parliament or the Council objects to a regulatory standard, it shall not enter into force. The institution which objects shall state the reasons for objecting to a regulatory standard.

Amendment  86

Proposal for a regulation

Article 7 c (new)

Text proposed by the Commission

Amendment

 

Article 7c

 

Non-endorsement or amendment of draft regulatory standards

 

1.        In the event that the Commission does not endorse a draft regulatory standard or amends them, the Commission shall inform the Authority, the European Parliament and the Council, stating its reasons.

 

2.        The European Parliament or Council may convene the responsible Commissioner, together with the Chairman of the Authority, within one month for an ad hoc meeting of the competent committee of the European Parliament or Council to present and explain their differences.

Amendment  87

Proposal for a regulation

Article 7 d (new)

Text proposed by the Commission

Amendment

 

Article 7d

 

Revocation of the delegation

 

1.        The delegation of power referred to in Article 7 may be revoked by the European Parliament or by the Council.

 

2.        The decision of revocation shall state the reasons for the revocation and shall put an end to the delegation.

 

3.        The institution which has commenced an internal procedure for deciding whether to revoke the delegation of power shall endeavour to inform the other institution and the Commission within a reasonable time before the final decision is taken, indicating the regulatory standard powers which could be subject to revocation and the possible reasons for a revocation.

Amendment  88

Proposal for a regulation

Article 7 e (new)

Text proposed by the Commission

Amendment

 

Article 7e

 

Implementing standards

 

1.        The Authority may develop draft standards to implement legally binding European Union acts in the areas specifically set out in the present regulation and in the legislative acts referred to in Article 1(2).

 

2.        The Authority shall conduct open public consultations on implementing standards and analyse the potential related costs and benefits before adopting draft implementing standards. The Authority shall also request an opinion or advice of the Securities and Markets Stakeholder Group referred to in Article 22.

 

3. The Authority shall submit its draft implementing standards to the Commission for endorsement in accordance with Article 291 of the Treaty on the Functioning of the European Union and, at the same time, to the European Parliament and the Council.

 

4.        Within three months of receipt of the draft implementing standards, the Commission shall decide whether to endorse, reject or amend the draft implementing standards. The Commission may extend that period by one month. The Commission shall inform the European Parliament and the Council of its decision, stating the reasons.

 

5.        The draft implementing standards may be amended by the Commission if they are incompatible with Union law, do not respect the principle of proportionality or run counter to the fundamental principles of the internal market for financial services.

 

6.        In the event that the Commission does not endorse the draft implementing standards or amends them, the Commission shall inform the Authority, the European Parliament and the Council, stating its reasons.

 

7.        Having completed the due procedure the standards shall be published in the Official Journal of the European Union.

Amendment  89

Proposal for a regulation

Article 8

Text proposed by the Commission

Amendment

The Authority shall, with a view to establishing consistent, efficient and effective supervisory practices within the ESFS, and to ensuring the common, uniform and consistent application of Community legislation, issue guidelines and recommendations addressed to competent authorities or financial market participants.

1.        The Authority shall, with a view to establishing consistent, efficient and effective supervisory practices within the ESFS, and to ensuring the common, uniform and consistent application of Union legislation, issue guidelines and recommendations addressed to competent authorities or financial institutions.

 

2.        The Authority shall conduct open public consultations regarding the guidelines and recommendations and analyse the potentially related costs and benefits. The Authority shall also request the opinion or advice from the Securities and Markets Stakeholder Group referred to in Article 22. Those consultations, analyses and opinions and that advice shall be proportionate in relation to scope, nature and impact of the guideline or recommendation.

 

3.        Within two months of the issuance of a guideline or recommendation, each competent authority shall decide whether it intends to comply with that guideline or recommendation. In the event that a competent authority does not intend to comply, it shall inform the Authority, stating reasons. The Authority shall publish those reasons.

The competent authorities shall make every effort to comply with those guidelines and recommendations.

4.        In the report referred to in Article 35(2), the Chairperson of the Authority shall inform the European Parliament, the Council and the Commission of the guidelines and recommendations that are issued, stating which national authority has not complied with them and outlining how the Authority intends to ensure that they will follow its guidelines and recommendations in the future.

Where the competent authority does not apply those guidelines or recommendations it shall inform the Authority of its reasons.

 

Amendment  90

Proposal for a regulation

Article 9 – paragraph 1

Text proposed by the Commission

Amendment

1.        Where a competent authority has not correctly applied the legislation referred to in Article 1(2), in particular by failing to ensure that a financial market participant satisfies the requirements laid down in that legislation, the Authority shall have the powers set out in paragraphs 2, 3 and 6 of this Article.

1.        Where a competent authority has not correctly applied the legislation referred to in Article 1(2), including the regulatory and implementing standards established in accordance with Article 7 and 7e, in particular by failing to ensure that a financial institution satisfies the requirements laid down in that legislation, the Authority shall have the powers set out in paragraphs 2, 3 and 6 of this Article.

Amendment  91

Proposal for a regulation

Article 9 – paragraph 2

Text proposed by the Commission

Amendment

2.        Upon request from one or more competent authorities, from the Commission or on its own initiative and after having informed the competent authority concerned, the Authority may investigate the alleged incorrect application of Community law.

2.        Upon request from one or more competent authorities, from the Commission, from the European Parliament, the Council or the Securities and Markets Stakeholder Group, or on its own initiative and after having informed the competent authority concerned, the Authority may investigate the alleged incorrect application of Union law.

Without prejudice to the powers laid down in Article 20, the competent authority shall provide the Authority with all information which the Authority considers necessary for its investigation without delay.

3.        Without prejudice to the powers laid down in Article 20, the competent authority shall provide the Authority with all information which the Authority considers necessary for its investigation without delay.

Amendment  92

Proposal for a regulation

Article 9 – paragraph 3

Text proposed by the Commission

Amendment

3.        The Authority may, at the latest within two months from initiating its investigation, address to the competent authority concerned a recommendation setting out the action necessary to comply with Community law.

4.        The Authority may, at the latest within two months from initiating its investigation, address to the competent authority concerned a recommendation setting out the action necessary to comply with Union law. The Authority shall ensure that the right to be heard of the addressees of the decision is respected.

The competent authority shall, within ten working days of the receipt of the recommendation, inform the Authority of the steps it has taken or intends to take to ensure compliance with Community law.

5.        The competent authority shall, within ten working days of the receipt of the recommendation, inform the Authority of the steps it has taken or intends to take to ensure compliance with Union law.

Amendment  93

Proposal for a regulation

Article 9 – paragraph 4

Text proposed by the Commission

Amendment

4.        Where the competent authority has not complied with Community law within one month from receipt of the Authority's recommendation, the Commission may, after having been informed by the Authority or on its own initiative, take a decision requiring the competent authority to take the action necessary to comply with Community law.

6.        Where the competent authority has not complied with Union law within the 10 working days set out in paragraph 3 from receipt of the Authority's recommendation, the Authority shall take a decision requiring the competent authority to take the action necessary to comply with Union law.

The Commission shall take such a decision no later than three months from the adoption of the recommendation. The Commission may extend this period by one month.

The Authority shall take such a decision no later than one month from the adoption of the recommendation.

The Commission shall ensure that the right to be heard of the addressees of the decision is respected.

 

The Authority and the competent authorities shall provide the Commission with all necessary information.

 

Amendment  94

Proposal for a regulation

Article 9 – paragraph 5

Text proposed by the Commission

Amendment

5.        The competent authority shall, within ten working days of receipt of the decision referred to in paragraph 4, inform the Commission and the Authority of the steps it has taken or intends to take to implement the Commission's decision.

7.        The competent authority shall, within ten working days of receipt of the decision referred to in paragraph 4, inform the Commission and the Authority of the steps it has taken or intends to take to implement the Authority's decision.

Amendment  95

Proposal for a regulation

Article 9 – paragraph 6

Text proposed by the Commission

Amendment

6.        Without prejudice to the powers of the Commission under Article 226 of the Treaty, where a competent authority does not comply with the decision referred to in paragraph 4 of this Article within the period of time specified therein, and where it is necessary to remedy in a timely manner the non compliance by the competent authority in order to maintain or restore neutral conditions of competition in the market or ensure the orderly functioning and integrity of the financial system, the Authority may, where the relevant requirements of the legislation referred to in Article 1(2) are directly applicable to financial market participants, adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Community law including the cessation of any practice.

8.        Without prejudice to the powers of the Commission under Article 258 of the Treaty on the Functioning of the European Union, where a competent authority does not comply with the decision referred to in paragraph 5 of this Article within the period of time specified therein, and where it is necessary to remedy in a timely manner the non compliance by the competent authority in order to maintain or restore neutral conditions of competition in the market or ensure the orderly functioning and integrity of the financial system, the Authority shall, adopt an individual decision addressed to a financial institution requiring the necessary action to comply with its obligations under Union law including the cessation of any practice.

The decision of the Authority shall be in conformity with the decision adopted by the Commission pursuant to paragraph 4.

The decision of the Authority shall be in conformity with the decision adopted pursuant to paragraph 4. Any legal or judiciary expenses imposed on the Authority as a result of the application of this Article shall be borne by the Commission.

Amendment  96

Proposal for a regulation

Article 9 – paragraph 7

Text proposed by the Commission

Amendment

7.        Decisions adopted under paragraph 6 shall prevail over any previous decision adopted by the competent authorities on the same matter.

9.        Decisions adopted under paragraph 8 shall apply to all relevant financial institutions which are active in the non-compliant jurisdiction and shall prevail over any previous decision adopted by the competent authorities on the same matter.

Any action by the competent authorities in relation to facts which are subject to a decision pursuant to paragraph 4 or 6 shall be compatible with those decisions.

Any action by the competent authorities in relation to facts which are subject to a decision pursuant to paragraph 5 or 8 shall be compatible with those decisions.

Amendment  97

Proposal for a regulation

Article 9 – paragraph 7 a (new)

Text proposed by the Commission

Amendment

 

7a.      In the Report referred to in article 35(2), the Chairperson shall set out which competent authorities and financial institutions have not complied with the decisions referred to in paragraphs 4 and 6.

Amendment  98

Proposal for a regulation

Article 10 – paragraph 1

Text proposed by the Commission

Amendment

1.        In the case of adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Community, the Commission, upon its own initiative or following a request by the Authority, the Council, or the ESRB, may adopt a decision addressed to the Authority, determining the existence of an emergency situation for the purposes of this regulation.

1.        In the case of adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Union, the ESRB, upon its own initiative or following a request by the Authority, the Council, the European Parliament or the Commission, may issue a warning declaring the existence of an emergency situation in order to enable the Authority without further requirements to adopt the individual decisions referred to in paragraph 3.

Amendment  99

Proposal for a regulation

Article 10 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a.      When it issues a warning, the ESRB shall notify it simultaneously to the European Parliament, the Council, the Commission and the Authority. The conclusion drawn by the ESRB shall be subject to an exchange of views ex-post between the ESRB Chairperson, the European Parliament and the competent Commissioner and shall be effective as soon as possible.

Amendment  100

Proposal for a regulation

Article 10 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

1b.      Where a warning has been issued, the Authority shall actively facilitate and, where deemed necessary, coordinate any actions by the relevant competent authorities.

Amendment  101

Proposal for a regulation

Article 10 – paragraph 2

Text proposed by the Commission

Amendment

2.        Where the Commission has adopted a decision pursuant to paragraph 1, the Authority may adopt individual decisions requiring competent authorities to take the necessary action in accordance with the legislation referred to in Article 1(2) to address any risks that may jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system by ensuring that financial market participants and competent authorities satisfy the requirements laid down in that legislation.

2.        Where the ESRB has adopted a decision pursuant to paragraph 1, the Authority shall adopt individual decisions to ensure that competent authorities take the necessary action in accordance with this Regulation to address any risks that may jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system by ensuring that financial institutions and competent authorities satisfy the requirements laid down in that legislation.

Amendment  102

Proposal for a regulation

Article 10 – paragraph 3

Text proposed by the Commission

Amendment

3.        Without prejudice to the powers of the Commission under Article 226 of the Treaty, where a competent authority does not comply with the decision of the Authority referred to in paragraph 2 within the period laid down therein, the Authority may, where the relevant requirements laid down in the legislation referred to in Article 1(2) are directly applicable to financial market participants, adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under that legislation, including the cessation of any practice.

3.        Without prejudice to the powers of the Commission under Article 258 of the Treaty on the Functioning of the European Union, where a competent authority does not comply with the decision of the Authority referred to in paragraph 2 within the period laid down therein, the Authority shall adopt an individual decision addressed to a financial institution requiring the necessary action to comply with its obligations under that legislation, including the cessation of any practice.

Amendment  103

Proposal for a regulation

Article 10 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a.      Where the addressee of the decision refuses to comply with Union law or a specific decision taken by the Authority, the Authority may issue proceedings in the national courts, including applications for interim relief.

Amendment  104

Proposal for a regulation

Article 10 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a.      The ESRB shall review the decision referred to in paragraph 1 upon its own initiative or following a request by the European Parliament, the Council, the Commission or the Authority, and declare the discontinuation of the emergency situation when appropriate.

Amendment  105

Proposal for a regulation

Article 10 – paragraph 4 b (new)

Text proposed by the Commission

Amendment

 

4b.      In the Report referred to in Article 35(2), the Chairperson shall set out the individual decisions addressed to national authorities and financial institutions under paragraphs 3 and 4.

Amendment  106

Proposal for a regulation

Article 11 – paragraph 1

Text proposed by the Commission

Amendment

1. Without prejudice to the powers laid down in Article 9, where a competent authority disagrees on the procedure or content of an action or inaction by another competent authority in areas where the legislation referred to in Article 1(2) requires cooperation, coordination or joint decision making by competent authorities from more than one Member State, the Authority, at the request of one or more of the competent authorities concerned, may assist the authorities in reaching an agreement in accordance with the procedure set out in paragraph 2.

1. Without prejudice to the powers laid down in Article 9, where a competent authority disagrees on the procedure or content of an action or inaction by another competent authority in areas where the legislation referred to in Article 1(2) requires cooperation, coordination or joint decision making by competent authorities from more than one Member State, the Authority, on its own initiative or at the request of one or more of the competent authorities concerned, shall take the lead in assisting the authorities in reaching an agreement in accordance with the procedure set out in paragraphs 2 to 4.

Amendment  107

Proposal for a regulation

Article 11 – paragraph 2

Text proposed by the Commission

Amendment

2. The Authority shall set a time limit for conciliation between the competent authorities taking into account any relevant time periods specified in the legislation referred to in Article 1(2) and the complexity and urgency of the matter.

2. The Authority shall set a time limit for conciliation between the competent authorities taking into account any relevant time periods specified in the legislation referred to in Article 1(2) and the complexity and urgency of the matter. At that stage the Authority shall act as a mediator.

Amendment  108

Proposal for a regulation

Article 11 – paragraph 3

Text proposed by the Commission

Amendment

3. If, at the end of the conciliation phase, the competent authorities concerned have failed to reach an agreement, the Authority may take a decision requiring them to take specific action or to refrain from action in order to settle the matter, in compliance with Community law.

3. If, at the end of the conciliation phase, the competent authorities concerned have failed to reach an agreement, the Authority shall, in accordance with the second subparagraph of Article 29(1), take a decision to settle the disagreement and to require them to take specific action, in compliance with Union law, with binding effects on the competent authorities concerned.

Amendment  109

Proposal for a regulation

Article 11 – paragraph 4

Text proposed by the Commission

Amendment

4. Without prejudice to the powers of the Commission under Article 226 of the Treaty, where a competent authority does not comply with the decision of the Authority, and thereby fails to ensure that a financial market participant complies with requirements directly applicable to it by virtue of the legislation referred to in Article 1(2), the Authority may adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Community law, including the cessation of any practice.

4. Without prejudice to the powers of the Commission under Article 258 of the Treaty on the Functioning of the European Union, where a competent authority does not comply with the decision of the Authority, and thereby fails to ensure that a financial institution complies with requirements directly applicable to it by virtue of the legislation referred to in Article 1(2), the Authority shall adopt an individual decision addressed to a financial institution requiring the necessary action to comply with its obligations under Union law, including the cessation of any practice.

Amendment  110

Proposal for a regulation

Article 11 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a.      Decisions adopted under paragraph 4 shall prevail over any previous decision adopted by the competent authorities on the same matter.

 

Any action by the competent authorities in relation to facts which are subject to a decision pursuant to paragraph 3 or 4 shall be compatible with those decisions.

Amendment  111

Proposal for a regulation

Article 11 – paragraph 4 b (new)

Text proposed by the Commission

Amendment

 

4b.      In the Report referred to in Article 35(2), the Chairperson shall set out the individual decisions addressed to competent authorities and financial institutions pursuant to paragraphs 3 and 4.

Amendment  112

Proposal for a regulation

Article 11 a (new)

Text proposed by the Commission

Amendment

 

Article 11a

 

Settlement of disagreements between competent authorities across sectors

 

Joint Committee shall, in accordance with the procedure laid down in Article 11, settle disagreements that may arise between competent authorities acting under Article 42.

Amendment  113

Proposal for a regulation

Article 12 – paragraph 1

Text proposed by the Commission

Amendment

1.        The Authority shall contribute to promote the efficient and consistent functioning of colleges of supervisors and foster the coherence of the application of Community legislation across colleges.

1. The Authority shall contribute to promote and monitor the efficient, effective and consistent functioning of the colleges of supervisors referred to in the legislation set out in article 1 (2) and foster the coherence of the application of Union law across the colleges. Staff from the authority shall be able to participate in any activities, including on-site examinations, carried out jointly by two or more competent authorities.

Amendment  114

Proposal for a regulation

Article 12 – paragraph 2

Text proposed by the Commission

Amendment

2.        The Authority shall participate as an observer in colleges of supervisors as it deems appropriate. For the purpose of that participation, it shall be considered a 'competent authority' within the meaning of the relevant legislation and, at its request, shall receive all relevant information shared with any member of the college.

2.        The Authority shall lead the colleges of supervisors as it deems appropriate. For that purpose it shall be considered a 'competent authority' within the meaning of the relevant legislation. It shall, at least:

 

(a) collect and share all relevant information in going concern and emergency situations in order to facilitate the work of the colleges of supervisors andl establish and manage a central system to make such information accessible to the competent authorities in the colleges of supervisors.

 

(b) initiate and coordinate European Union-wide stress tests to assess the resilience of financial institutions, in particular of those identified in Article 12 b, to adverse market developments, ensuring an as consistent as possible methodology is applied at the national level to such tests.

 

(c) plan and lead supervisory activities in going concern as well as in emergency situations, including evaluating the risks to which financial institutions are or might be exposed; and

 

(d) oversee the tasks carried out by the competent authorities.

Amendment  115

Proposal for a regulation

Article 12 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a.      The Authority may issue regulatory and implementing standards, guidelines and recommendations adopted under Articles 7, 7e and 8 to harmonise supervisory functioning and best practices adopted by the colleges of supervisors. The authorities shall approve written arrangements for the functioning of each college in order to ensure convergent functioning between all of them.

Amendment  116

Proposal for a regulation

Article 12 – paragraph 3 b (new)

Text proposed by the Commission

Amendment

 

3b.      A legally binding mediation role should allow the Authority to solve disputes between competent authorties following the procedure set up on Article 11. Where no agreement can be reached within the relevant college of supervisors, the Authority may take supervisory decisions directly applicable to the institutions concerned.

Amendment  117

Proposal for a regulation

Article 12 a (new)

Text proposed by the Commission

Amendment

 

Article 12a

 

General provisions

 

1.        The Authority shall pay special attention to and address risks of disruption in financial services that (i) is caused by an impairment of all or parts of the financial system and (ii) has the potential to have serious negative consequences for internal market and the real economy (systemic risk). All types of financial intermediaries, markets and infrastructure can potentially be systematically important to some degree.

 

2.        The Authority, in collaboration with the European Systemic Risk Board, shall develop a common set of quantitative and qualitative indicators (risk dashboard) which will serve as the basis to assign a “Supervisory rating” to cross border institutions identified in Article 12b. That rating shall be reviewed on a regular basis, to take into account material changes of the risk profile of an institution. The supervisory rating shall be a critical element for the decision to directly supervise or intervene in an ailing institution.

 

3.        Without prejudice to legislative acts referred to in Article 1(2), the Authority shall propose, as necessary, additional draft regulatory and implementing standards as well as guidelines and recommendations for institutions identified in Article 12b.

 

4.        The Authority shall exert supervision of cross border institutions that may pose a systemic risk as established in Article 12 b. In those cases, the Authority shall act through the competent authorities.

 

5.        The Authority shall establish a Resolution Unit with a mandate to put in practice the clearly defined governance and modus operandi of crisis management from early intervention to resolution and insolvency and lead such procedures.

 

6.        All financial institutions identified in Article 12b must take part in the European Stability Fund as established by Article 12d. Financial institutions operating in a single Member State shall have the option to join the Stability Fund. The contributions made to the European Fund shall replace those made to national funds of a similar nature.

Amendment  118

Proposal for a regulation

Article 12 b (new)

Text proposed by the Commission

Amendment

 

Article 12b

 

Identification of systemic institutions that potentially could pose a systemic risk

 

1.        The Board of Supervisors, following consultation of the ESRB, may, in accordance with the procedure set out in Article 29(1), identify cross border institutions that, due to the systemic risk they may pose need to be subject to direct supervision by the Authority or placed under the Resolution Unit as referred to in Article 12c.

 

2.        The criteria for identifying such institutions shall be consistent with the criteria established by the Financial Stability Board, the Inernational Monetary Fund and the Bank for International Settlements.

Amendment  119

Proposal for a regulation

Article 12 c (new)

Text proposed by the Commission

Amendment

 

Article 12c

 

Resolution Unit

 

1.        The Resolution Unit shall preserve financial stability and minimise the contagion effect of the distressed institutions identified in Article 12b to the rest of the system and the economy at large and limit the cost to taxpayers respecting the principle of proportionality, creditors' hierarchy and guaranteeing equal treatment across borders.

 

2.        The Resolution Unit shall be empowered to fulfil the tasks set out in paragraph 1, in order to rehabilitate its distressed institutions or to decide on a winding-up on non viable institutions. Among other actions it could require adjustments in capital or liquidity, adapt the business mix, improve processes, appoint or replace management, recommend guarantees, loans and liquidity assistance, total or partial sales,, swap debt into equity or take the institution into temporary public ownership.

 

3.        The Resolution Unit shall comprise experts appointed by the Board of Supervisors of the Authority with knowledge and expertise in restructuring, turn-a-rounds and liquidation of financial institutions.

Amendment  120

Proposal for a regulation

Article 12 d (new)

Text proposed by the Commission

Amendment

 

Article 12d

 

European Stability Fund

 

1.        A European Stability Fund for Securities and Markets (the Stability Fund) shall be established in order to strengthen the internalisation of the costs of the financial system, and to assist in crisis resolution for failing cross-border financial institutions. Financial institutions operating in only one Member State shall have the option to join the fund. The Stability Fund shall adopt appropriate measures to avoid that the availability of aid generates a moral hazard.

 

2.        The Stability Fund shall be financed through direct contributions from all financial institutions identified in Article 12b(1). Those contributions shall be proportionate to the level of risk and contributions to systemic risk that each of them poses and variations in overall risk over time, as identified through their risk dashboard. Levels of contributions required shall take into account broader economic conditions and the need for financial institutions to maintain capital for other regulatory and business requirements.

 

3.        The Stability Fund shall be managed by a Board appointed by the Authority for a period of five years. The members of the Board shall be selected from staff proposed by the national authorities. The Stability Fund shall also create a Consultative Board involving non-voting representation of the financial institutions participating in the Stability Fund. The Board of the Stability Fund may propose that the Authority outsource the management of its liquidity to reputable institutions (such as the EIB). These funds should be invested in safe and liquid instruments.

 

4.        When the accumulated resources from the contributions made by institutions are not sufficient to face the difficulties, the Stability Fund shall have the capacity to increase its resources through debt issuance or other financial means.

Amendment  121

Proposal for a regulation

Article 13 – paragraph 2

Text proposed by the Commission

Amendment

2.        The Authority shall facilitate the delegation of tasks and responsibilities between competent authorities by identifying those tasks and responsibilities that can be delegated or jointly exercised and by promoting best practices.

2.        The Authority shall stimulate and facilitate the delegation of tasks and responsibilities between competent authorities by identifying those tasks and responsibilities that can be delegated or jointly exercised and by promoting best practices.

Amendment  122

Proposal for a regulation

Article 13 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a.      The delegation of responsibilities shall result in the reallocation of competencies laid down in the legislation referred to in Article 1(2). The law of the delegate authority shall govern the procedure, enforcement and administrative and judicial review relating to the delegated responsibilities.

Amendment  123

Proposal for a regulation

Article 13 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a.      No bilateral agreements concerning delegation shall be entered into concerning those institutions that are identified in Article 12b .

Amendment  124

Proposal for a regulation

Article 13 – paragraph 3 b (new)

Text proposed by the Commission

Amendment

 

3b.      The Authority shall delegate on the authorities in the Member States the tasks and responsibilities to supervise the prudential supervision of institutions under article 12a.

Amendment  125

Proposal for a regulation

Article 14 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

1.        The Authority shall play an active role in building a common European supervisory culture and consistent supervisory practices, and ensuring uniform procedures and consistent approaches throughout the Community and shall carry out, at a minimum, the following activities:

1.        The Authority shall play an active role in building a common European supervisory culture and consistent supervisory practices, and ensuring uniform procedures and consistent approaches throughout the Union and shall carry out, at a minimum, the following activities:

Amendment  126

Proposal for a regulation

Article 14 – paragraph 1 – point c

Text proposed by the Commission

Amendment

(c)       contribute to developing high quality and uniform supervisory standards, including reporting standards;

(c)       contribute to developing high quality and uniform supervisory standards, including global accounting and reporting standards;

Amendment  127

Proposal for a regulation

Article 14 – paragraph 1 – point d

Text proposed by the Commission

Amendment

(d)       review the application of the relevant technical standards adopted by the Commission, guidelines and recommendations issued by the Authority and propose amendments where appropriate;

(d)       review the application of the relevant regulatory and implementing standards adopted by the Commission, guidelines and recommendations issued by the Authority and propose amendments where appropriate;

Amendment  128

Proposal for a regulation

Article 15 – paragraph 1

Text proposed by the Commission

Amendment

1.        The Authority shall periodically conduct peer review analyses of some or all of the activities of competent authorities, to further enhance consistency in supervisory outcomes. To this end, the Authority shall develop methods to allow for objective assessment and comparison between the authorities reviewed.

1.        The Authority shall periodically organise and conduct peer review analyses of some or all of the activities of competent authorities, to further enhance consistency in supervisory outcomes. To this end, the Authority shall develop methods to allow for objective assessment and comparison between the authorities reviewed.

Amendment  129

Proposal for a regulation

Article 15 – paragraph 2 –point a

Text proposed by the Commission

Amendment

(a)       the adequacy of institutional arrangements, resourcing and staff expertise of the competent authority, with particular regard to the effective application of the legislation referred to in Article 1(2) and to the capacity to respond to market developments;

(a)       the adequacy of institutional arrangements, resourcing and staff expertise of the competent authority, with particular regard to the effective application of the regulatory and implementing standards referred to in Articles 7 and 7e and the legislation referred to in Article 1(2) and to the capacity to respond to market developments;

Amendment  130

Proposal for a regulation

Article 15 – paragraph 2 – point b

Text proposed by the Commission

Amendment

(b)       the degree of convergence reached in the application of Community law and in supervisory practice, including technical standards, guidelines and recommendations adopted under Articles 7 and 8, and the extent to which the supervisory practice achieves the objectives set out in Community law;

(b)       the degree of convergence reached in the application of Union law and in supervisory practice, including regulatory and implementing standards, guidelines and recommendations adopted under Articles 7, 7e and 8, and the extent to which the supervisory practice achieves the objectives set out in Union law;

Amendment  131

Proposal for a regulation

Article 15 – paragraph 3

Text proposed by the Commission

Amendment

3.        On the basis of the peer review the Authority may issue recommendations to the competent authorities concerned.

3.        On the basis of the peer review the Authority may adopt draft regulatory or implementing standards in accordance with Articles 7 to 7e, issue guidelines and recommendations pursuant to Article 8, or adopt a decision addressed to competent authorities.

Amendment  132

Proposal for a regulation

Article 15 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a.      The Authority shall make the outcome of peer reviews and the best practices that can be identified from those peer reviews publicly available.

Amendment  133

Proposal for a regulation

Article 16 – paragraph 1

Text proposed by the Commission

Amendment

The Authority shall fulfil a general coordination role between competent authorities, including where adverse developments could potentially jeopardise the orderly functioning and integrity of financial markets or the stability of the financial system in the Community.

The Authority shall fulfil a general coordination role between competent authorities, including where adverse developments could potentially jeopardise the orderly functioning and integrity of financial markets or the stability of the financial system in the Union.

Amendment  134

Proposal for a regulation

Article 16 –paragraph 2 – introductory part

Text proposed by the Commission

Amendment

The Authority shall promote a coordinated Community response, inter alia by:

The Authority shall promote a coordinated and consolidated Union response, inter alia by:

Amendment  135

Proposal for a regulation

Article 16 – paragraph 2 – point 4 a (new)

Text proposed by the Commission

Amendment

 

(4a)     taking all appropriate measures within the scope of its powers to ensure coordination of competent authorities in case of developments which may jeopardise the functioning of the financial markets;

Amendment  136

Proposal for a regulation

Article 16 – paragraph 2 – point 4 b (new)

Text proposed by the Commission

Amendment

 

(4b)     acting as a central point for regulatory reporting by institutions active in more than one Member States.

Amendment  137

Proposal for a regulation

Article 16 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

The Member States shall provide the Authority with all regulatory reporting data received from the institutions referred to in point 4 of the second paragraph. Upon receipt of that data, the Authority shall share the information with the competent national authorities.

Amendment  138

Proposal for a regulation

Article 17– paragraph 1

Text proposed by the Commission

Amendment

1.        The Authority shall monitor and assess market developments in the area of its competence and, where necessary, inform the European Insurance and Occupational Pensions Authority, the European Banking Authority, the ESRB and the European Parliament, the Council and the Commission about the relevant micro-prudential trends, potential risks and vulnerabilities.

1.        The Authority shall monitor and assess market developments in the area of its competence and, where necessary, inform the European Supervisory Authority (Insurance and Occupational Pensions), the European Supervisory Authority (Banking), the ESRB, the European Parliament, the Council and the Commission about the relevant micro-prudential trends, potential risks and vulnerabilities. The Authority shall include in its assessments an economic analysis of the markets for financial institutions, and an impact assessment of potential market developments on them.

In particular, the Authority shall, in cooperation with the ESRB, initiate and coordinate Community-wide assessments of the resilience of key financial market participants to adverse market developments To that end, it shall develop the following, for application by the competent authorities:

2.        The Authority shall, in cooperation with the ESRB, initiate and coordinate Union-wide assessments of the resilience of financial institutions to adverse market developments. To that end, it shall develop the following, for application by the competent authorities:

(a)       common methodologies for assessing the effect of economic scenarios on a key financial market participant's financial positions;

(a)       common methodologies for assessing the effect of economic scenarios on an institution's financial positions;

(b)       common approaches to communication on the outcomes of these assessments of the resilience of key financial market participants.

(b)       common approaches to communication on the outcomes of these assessments of the resilience of financial institutions;

 

(ba)     common methodologies for assessing the effect of particular products or distribution processes on an institution’s financial position and on depositors, investors and customer information.

Amendment  139

Proposal for a regulation

Article 17– paragraph 3

Text proposed by the Commission

Amendment

3.        The Authority shall ensure an adequate coverage of cross-sectoral developments, risks and vulnerabilities by closely cooperating with the European Insurance and Occupational Pensions Authority and the European Banking Authority.

3.        The Authority shall ensure an adequate coverage of cross-sectoral developments, risks and vulnerabilities by closely cooperating with the European Supervisory Authority (Insurance and Occupational Pensions), the European Supervisory Authority (Banking) and through the Joint Committee.

Amendment  140

Proposal for a regulation

Article 18 – paragraph 1

Text proposed by the Commission

Amendment

Without prejudice to the competences of the Community Institutions, the Authority may develop contacts with supervisory authorities from third countries. It may enter into administrative arrangements with international organisations and the administrations of third countries.

Without prejudice to the competences of the Union institutions and of the competent authorities, the Authority shall represent the Union in all international fora concerning the regulation and supervision of the institutions falling under the legislation referred to in Article 1(2).

Amendment  141

Proposal for a regulation

Article 18 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

The Authority shall develop contacts with supervisory authorities from third countries. It may enter into administrative arrangements with international organisations and the administrations of third countries. These arrangements shall not prevent Member States and the competent authorities from concluding bilateral or multilateral arrangements with third countries.

Amendment  142

Proposal for a regulation

Article 18 – paragraph 2

Text proposed by the Commission

Amendment

The Authority shall assist in preparing equivalence decisions pertaining to supervisory regimes in third countries in accordance with the legislation referred to in Article 1(2).

The Authority shall assist in preparing equivalence decisions pertaining to supervisory regimes in third countries in accordance with the legislation referred to in Article 1(2). The Commission shall adopt regulatory standards in accordance with Articles 7a to 7d, for the purpose of making assessments of equivalence referred to in this Article.

Amendment  143

Proposal for a regulation

Article 18 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

In the Report referred to in Article 35(2), the Chairperson of the Authority shall set out the administrative arrangements and equivalent decisions agreed upon with international organisations or administrations or third countries.

Amendment  144

Proposal for a regulation

Article 19 – paragraph 2

Text proposed by the Commission

Amendment

2. With regard to prudential assessments of mergers and acquisitions falling under the terms of Directive 2007/44/EC, the Authority may, on its own initiative or on application of any competent authorities, issue and publish an opinion on a prudential assessment to be carried out by any authority of a Member State. Article 20 shall apply.

2. With regard to prudential assessments of mergers and acquisitions falling under the terms of Directive 2007/44/EC, the Authority may, on its own initiative or on application of any competent authorities, monitor the assessments and provide guidance with a view to streamline and provide a level playing field, and issue and publish an opinion on a prudential assessment to be carried out by any authority of a Member State. Article 20 shall apply.

Amendment  145

Proposal for a regulation

Article 19 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a.      On the basis of Joint Guidelines, the Authority may conduct the change of control procedure under Directive 2007/44/EC. Upon receipt of the notification, the Authority will coordinate with the relevant national authorities.

Amendment  146

Proposal for a regulation

Article 20– paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

The Authority may also request information to be provided at recurring intervals.

The Authority may also request information to be provided at recurring intervals. Those requests shall use common reporting formats to be fulfilled, where appropriate, at a consolidated level.

Amendment  147

Proposal for a regulation

Article 20– paragraph 1 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

Where competent authorities are not obliged to collect the information requested, the Authority may amend the regulatory or implementing standards that refer to reporting requirements.

Amendment  148

Proposal for a regulation

Article 20– paragraph 1 – subparagraph 2 b (new)

Text proposed by the Commission

Amendment

 

On a request from a competent authority of a Member State the Authority may provide any such information that is necessary to enable the competent authority to carry out its duties, provided the competent authority concerned has appropriate confidentiality arrangements in place.

Amendment  149

Proposal for a regulation

Article 20– paragraph 1 – subparagraph 2 c (new)

Text proposed by the Commission

Amendment

 

 

 

 

 

To avoid duplication of reporting obligation, the Authority shall take account of the existing statistics produced, disseminated and developed by the European Statistical System and the European System of Central Banks.

Amendment  150

Proposal for a regulation

Article 21 – paragraph 1

Text proposed by the Commission

Amendment

1.        The European Securities and Markets Authority shall co-operate with the ESRB.

1.        The Authority shall co-operate closely and on a regular basis with the ESRB.

Amendment  151

Proposal for a regulation

Article 21 – paragraph 2

Text proposed by the Commission

Amendment

2         The Authority shall cooperate closely with the ESRB. It shall provide the ESRB with regular and up-to-date information necessary for the achievement of its tasks. Any data necessary for the achievement of its tasks that are not in summary or collective form shall be provided without delay to the ESRB upon a reasoned request, as specified in Article [15] of Regulation (EC) No …./… [ESRB].

2.        The Authority shall provide the ESRB with regular and up-to-date information necessary for the achievement of its tasks. Any data necessary for the achievement of its tasks that are not in summary or collective form shall be provided without delay to the ESRB upon a reasoned request, as specified in Article [15] of Regulation (EU) No …./2010 [ESRB]. The Authority shall develop an adequate protocol for the disclosure of confidential information regarding individual financial institutions.

Amendment  152

Proposal for a regulation

Article 21 – paragraph 6

Text proposed by the Commission

Amendment

6. In discharging its tasks set out in this regulation, the Authority shall take the utmost account of the warnings and recommendations of the ESRB.

6. In discharging its tasks set out in this regulation, the Authority shall take account of the warnings and recommendations of the ESRB.

Amendment  153

Proposal for a regulation

Article 22 – paragraph 1

Text proposed by the Commission

Amendment

1.        For the purpose of consultation with stakeholders in areas relevant to the tasks of the Authority, a Securities and Markets Stakeholder Group shall be established.

1.        To help facilitate consultation with stakeholders in areas relevant to the tasks of the Authority, a Securities and Markets Stakeholder Group (the Stakeholder Group) shall be established. The Stakeholder Group shall be consulted on all relevant decisions and actions of the Authority. If actions must urgently be taken and consultation becomes impossible the Stakeholder Group shall be informed as soon as possible.

 

The Stakeholder Group shall meet at least four times a year.

Amendment  154

Proposal for a regulation

Article 22 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. The Securities and Markets Stakeholder Group shall be composed of 30 members, representing in balanced proportions Community financial market participants, their employees as well as consumers, investors and users of financial services.

2. The Securities and Markets Stakeholder Group shall be composed of 30 members, representing in balanced proportions Union financial market participants, their employees as well as consumers, investors and users of financial services. At least five of the members shall be independent top-ranking academics. The number of members representing market participants shall not exceed 10.

Amendment  155

Proposal for a regulation

Article 22 – paragraph 3

Text proposed by the Commission

Amendment

3.        The members of the Securities and Markets Stakeholder Group shall be appointed by the Board of Supervisors of the Authority, following proposals from the relevant stakeholders.

3.        The members of the Stakeholder Group shall be appointed by the Board of Supervisors of the Authority, following proposals from the relevant stakeholders.

In making its decision, the Board of Supervisors shall, to the extent possible, ensure an appropriate geographical balance and representation of stakeholders across the Community.

In making its decision, the Board of Supervisors shall ensure that all members not representing professional market participants or their employees disclose any potential conflicts of interest.

The Authority shall ensure adequate secretarial support for the Securities and Markets Stakeholder Group.

 

Amendment  156

Proposal for a regulation

Article 22 – paragraph 4

Text proposed by the Commission

Amendment

4.        Members of the Securities and Markets Stakeholder Group shall serve for a period of two and a half years, following which a new selection procedure shall take place.

4.        The Authority shall provide all necessary information and ensure adequate secretarial support for the Stakeholder Group. Adequate compensation shall be established for members of the Stakeholder Group representing non-profit organisations. The Group may establish working groups on technical issues to which further experts may also be appointed to ensure the necessary technical expertise.

The members may serve two successive terms.

Members of the Stakeholder Group shall serve for a period of five years following which a new selection procedure shall take place.

Amendment  157

Proposal for a regulation

Article 22 – paragraph 5

Text proposed by the Commission

Amendment

5. The Securities and Markets Stakeholder Group may submit opinions and advice to the Authority on any issue related to the tasks of the Authority specified in Articles 7 and 8.

5. The Stakeholder Group shall submit opinions and advice to the Authority on any issue related to the tasks of the Authority including in relation to reaching joint positions with the European Supervisory Authority (Banking) and the European Supervisory Authority (Insurance and Occupational Pensions) as set out in Article 42, with particular focus on the tasks set out in Articles 7 to 7e, 8, 10, 14, 15 and 17. The Stakeholder Group may influence the agenda of meetings of the Authority. All group representatives shall have the opportunity to make an input. The final decision on the proposed agenda items shall be taken by Stakeholder Group, with the right for each stakeholder sub-group to have their proposed items on the agenda. Each stakeholder sub-group may submit its opinions and advice to the Authority. Such opinions and advice will not necessarily reflect those of the majority of the stakeholder group.

Amendment  158

Proposal for a regulation

Article 22 – paragraph 6

Text proposed by the Commission

Amendment

6.        The Securities and Markets Stakeholder Group shall adopt its rules of procedure.

6.        The Stakeholder Group shall adopt its rules of procedure on the basis of the agreement of a two-thirds majority of members.

Amendment  159

Proposal for a regulation

Article 23 – paragraph 1

Text proposed by the Commission

Amendment

1.        The Authority shall ensure that no decision adopted under Articles 10 or 11 impinges in any way on the fiscal responsibilities of Member States.

deleted

Amendment  160

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2.        Where a Member State considers that a decision taken under Article 11 impinges on its fiscal responsibilities, it may notify the Authority and the Commission within one month after notification of the Authority's decision to the competent authority that the decision will not be implemented by the competent authority.

2.        Where a Member State considers that a decision taken under Article 10(2) or Article 11 impinges directly and in a significant manner on its fiscal responsibilities, it shall notify the Authority, the Commission and the European Parliament within ten working days after notification of the Authority's decision to the competent authority if it will or will not comply with that decision.

Amendment  161

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

In its notification, the Member State shall justify why and clearly demonstrate how the decision impinges on its fiscal responsibilities.

In its notification, the Member State shall justify why and provide an impact assessment on how much the decision impinges on its fiscal responsibilities.

Amendment  162

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

In that case, the decision of the Authority shall be suspended.

deleted

Amendment  163

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 4

Text proposed by the Commission

Amendment

Within a period of one month from the notification by the Member State, the Authority shall inform the Member State as to whether it maintains its decision or whether it amends or revokes it.

2a.      Within a period of one month from the notification by the Member State, the Authority shall inform the Member State as to whether it maintains its decision or whether it amends or revokes it.

Amendment  164

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 5

Text proposed by the Commission

Amendment

Where the Authority maintains its decision, the Council, acting by qualified majority as defined in Article 205 of the Treaty, shall, within two months, decide whether the Authority's decision is maintained or revoked.

2b.      Where the Authority maintains or amends its decision, the Council shall take a decision whether the Authority's decision is maintained or revoked.

 

The decision to maintain the Authority's decision shall be taken by simple majority of members. The decision to revoke the Authority's decision shall be taken by a qualified majority of its members. In neither of these cases the vote of the Members concerned shall be taken into account. A qualified majority shall be defined as at least 55% of the members of the Council excluding the Member State concerned, comprising at least 65% of the population of the Union excluding the population of the Member State concerned.

Amendment  165

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 6

Text proposed by the Commission

Amendment

Where the Council decides to maintain the Authority's decision, or where it does not take a decision within two months, the suspension of that decision shall be immediately terminated.

deleted

Amendment  166

Proposal for a regulation

Article 23 – paragraph 3 – subparagraph 4

Text proposed by the Commission

Amendment

Where the Council does not take a decision within ten working days, the Authority's decision shall be deemed to be maintained.

Where the Council does not take a decision within ten working days in the case of Article 10 and one month in the case of Article 11, the Authority's decision shall be deemed to be maintained.

Amendment  167

Proposal for a regulation

Article 23 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a.      If a decision adopted under Article 10 leads to use of the funds set up according to Article 12 d or 12 e Member States shall not call on the Council to maintain or revoke a decision taken by the Authority.

Amendment  168

Proposal for a regulation

Article 24 – paragraph 1

Text proposed by the Commission

Amendment

1. Before taking the decisions provided for in Article 9(6), Article 10(2) and(3) and Article 11(3) and (4), the Authority shall inform the addressee of its intention to adopt the decision, setting a time limit within which the addressee may express its views on the matter, taking full account of the urgency of the matter.

1. Before taking the decisions provided for in this Regulation, the Authority shall inform the addressee of its intention to adopt the decision, setting a time limit within which the addressee may express its views on the matter, taking full account of the urgency, complexity and potential consequences of the matter.

Amendment  169

Proposal for a regulation

Article 24 – paragraph 5

Text proposed by the Commission

Amendment

5.        The decisions which the Authority takes pursuant to Articles 9, 10 and 11 shall be made public and shall state the identity of the competent authority or financial market participant concerned and the main content of the decision, having regard to the legitimate interest of financial market participants in the protection of their business secrets.

5.        The decisions which the Authority takes pursuant to Articles 9, 10 and 11 shall be made public and shall state the identity of the competent authority or financial institution concerned and the main content of the decision, unless such publication is in conflict with the legitimate interest of financial institutions in the protection of their business secrets or could seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system of the European Union.

Amendment  170

Proposal for a regulation

Article 25 – paragraph 1 – point (b)

Text proposed by the Commission

Amendment

(b)       the Head of the competent authority in each Member State. If there is more than one competent authority in a Member State, the authorities shall agree on one of the Heads to be the representative on the Board of Supervisors;

(b)       the Head of the competent authority in each Member State. Where more than one competent authority in a Member State is responsible for the application of Union law, they shall decide between themselves how to exercise their representation, including any votes under Article 29, which shall be shared;

Amendment  171

Proposal for a regulation

Article 25 – paragraph 1 – point (f) a (new)

Text proposed by the Commission

Amendment

 

(fa)     two non-voting representatives of the Stakeholder Group, one of them representing the non profit organisations.

Amendment  172

Proposal for a regulation

Article 25 – paragraph 2

Text proposed by the Commission

Amendment

2.        Each competent authority, and if there is more than one competent authority, those authorities together, shall be responsible for nominating a high-level alternate from the authority or authorities, who may replace the member of the Board of Supervisors referred to in paragraph 1(b), in case this person is prevented from attending.

2.        Each competent authority shall be responsible for nominating a high-level alternate from its authority, who may replace the member of the Board of Supervisors referred to in paragraph 1(b), in case this person is prevented from attending.

Amendment  173

Proposal for a regulation

Article 25 – paragraph 3

Text proposed by the Commission

Amendment

3. For the purpose of acting within the scope of Directive 97/9/EC the member of the Board of Supervisors referred to in paragraph 1(b) may, where appropriate, be accompanied by a representative from the relevant bodies which administers investor compensation schemes in each Member State, who shall be non-voting.

deleted

Amendment  174

Proposal for a regulation

Article 26 – paragraph 2

Text proposed by the Commission

Amendment

2.        For the purposes of Article 11, the Board of Supervisors shall convoke a panel to facilitate the settlement of the disagreement, consisting of the Chairperson and two of its members, who are not representatives of the competent authorities which are parties to the disagreement.

2.        For the purposes of Article 11, the Board of Supervisors shall convoke an independent panel to facilitate an impartial settlement of the disagreement, consisting of the Chairperson and two of its members, who are not representatives of the competent authorities which are parties to the disagreement and who shall not have any interest in the conflict.

Amendment  175

Proposal for a regulation

Article 26 – paragraph 3

Text proposed by the Commission

Amendment

3.        A Decision pursuant to Article 11 shall be adopted by the Board of Supervisors on proposal from the panel.

deleted

Amendment  176

Proposal for a regulation

Article 27

Text proposed by the Commission

Amendment

When carrying out the tasks conferred upon it by this Regulation, the Chairperson and the voting members of the Board of Supervisors shall act independently and objectively in the Community interest and shall neither seek nor take instructions from Community institutions or bodies, from a Government of a Member State or from any other public or private body.

1. When carrying out the tasks conferred upon it by this Regulation, the Chairperson and the voting members of the Board of Supervisors shall act independently and objectively in the sole interest of Union as a whole and shall neither seek nor take instructions from Union institutions or bodies, from a Government of a Member State or from any other public or private body.

Amendment  177

Proposal for a regulation

Article 27 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a.      Member States, the Union institutions and any other public or private body shall not seek to influence the members of the Board of Supervisors in the performance of their tasks relating to the Authority .

Amendment  178

Proposal for a regulation

Article 28 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a.       The Board of Supervisors shall, on the basis of a proposal by the Management Board, adopt the annual report on the activities of the Authority on the basis of the draft report referred to in Article 38(7) and shall transmit that report to the European Parliament, the Council, the Commission, the Court of Auditors, the European Economic and Social Committee by 15 June. The report shall be made public.

Amendment  179

Proposal for a regulation

Article 29 – paragraph 1

Text proposed by the Commission

Amendment

1. The Board of Supervisors shall act on the basis of qualified majority of its members, as defined in Article 205 of the Treaty, for acts specified in Articles 7, 8 and all measures and decisions adopted under Chapter VI.

1. The Board of Supervisors shall act on the basis of simple majority of its members.

All other decisions of the Board of Supervisors shall be taken by simple majority of members.

 

Amendment  180

Proposal for a regulation

Article 29 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a.      The decisions of the Board of Supervisors shall be taken by simple majority of its members, in accordance with the principle where each member has one vote. The Board of Supervisors shall act on the basis of qualified majority of its members, as defined in Article 16 of the Treaty on the European Union, for acts specified in Articles 7 and 8 and all measures and decisions adopted under Chapter VI.

Amendment  181

Proposal for a regulation

Article 29 – paragraph 4

Text proposed by the Commission

Amendment

4.        The rules of procedure shall set out in detail the arrangements governing voting, including, where appropriate, the rules governing quorums. The non-voting members and the observers, with the exception of the Chairperson and the Executive Director, shall not attend any discussions within the Board of Supervisors relating to individual financial market participants, unless otherwise provided for in Article 61 or in the legislation referred to in Article 1(2).

4.        The rules of procedure shall set out in detail the arrangements governing voting, including, where appropriate, the rules governing quorums. The non-voting members and the observers, with the exception of the Chairperson and the Executive Director, shall not attend any discussions within the Board of Supervisors relating to individual financial institutions, unless otherwise provided for in Article 61 or in the legislation referred to in Article 1(2).

Amendment  182

Proposal for a regulation

Article 30 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

1. The Management Board shall be composed of the Chairperson, a representative of the Commission, and four members elected by the Board of Supervisors from among its members.

1. The Management Board shall be composed of five members: the Chairperson and four members elected by the Board of Supervisors from among its voting members.

Amendment  183

Proposal for a regulation

Article 30 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

Each member other than the Chairperson shall have an alternate, who may replace the member of the Management Board if that person is prevented from attending.

deleted

Amendment  184

Proposal for a regulation

Article 30 – paragraph 2

Text proposed by the Commission

Amendment

2.        Decisions by the Management Board shall be adopted on the basis of a majority of the members present. Each member shall have one vote.

 

The Executive Director shall participate in meetings of the Management Board without the right to vote.

2.        The Executive Director and a representative of the Commission shall participate in meetings of the Management Board without the right to vote. The Management Board shall adopt and make public its rules of procedure.

The Management Board shall adopt and make public its rules of procedure.

 

Amendment  185

Proposal for a regulation

Article 30 – paragraph 3– subparagraph 1

Text proposed by the Commission

Amendment

3.        Meetings of the Management Board shall be convened by the Chairperson on its own initiative or at the request of at least a third of its members, and chaired by the Chairperson.

3.        Meetings of the Management Board shall be convened by the Chairperson on its own initiative or at the request of at least a third of its members, and chaired by the Chairperson. The Management Board shall meet at least preceding every Board of Supervisors meeting and as often as it deems necessary.

Amendment  186

Proposal for a regulation

Article 31

Text proposed by the Commission

Amendment

The members of the Management Board shall act independently and objectively in the Community interest, without seeking or taking any instructions from Community institutions or bodies, from any government of a Member State or from any other public or private body.

The members of the Management Board shall act independently and objectively in the sole interest of the Union as a whole, without seeking or taking any instructions from Union institutions or bodies, from any government of a Member State or from any other public or private body.

Amendment  187

Proposal for a regulation

Article 32 – paragraph 6

Text proposed by the Commission

Amendment

6.        The Management Board shall, after consulting the Board of Supervisors, adopt the annual report on the activities of the Authority on the basis of the draft report referred to in Article 38(7) and shall transmit that report to the European Parliament, the Council, the Commission, the Court of Auditors, the European Economic and Social Committee by 15 June. The report shall be made public.

6.        The Management Board shall, after consulting the Board of Supervisors, adopt the quarterly reports that the Chairperson of the Authority shall submit to the European Parliament in accordance with Article 35(2).

Amendment  188

Proposal for a regulation

Article 32 – paragraph 6 a (new)

Text proposed by the Commission

Amendment

 

6.        The Management Board shall also adopt the annual report that the Chairperson of the Authority shall submit to the European Parliament.

Amendment  189

Proposal for a regulation

Article 33 – paragraph 2

Text proposed by the Commission

Amendment

2.        The Chairperson shall be appointed by the Board of Supervisors on the basis of merit, skills, knowledge of financial market participants and markets, and experience relevant to financial supervision and regulation, following an open selection procedure.

2.        The Chairperson shall be appointed by the European Parliament on the basis of merit, skills, knowledge of financial institutions and markets, and experience relevant to financial supervision and regulation, following an open selection procedure organised and managed by the Commission.

Before appointment, the candidate selected by the Board of Supervisors shall be subject to confirmation by the European Parliament.

The Commission shall present a shortlist of three candidates to the European Parliament. After conducting hearings of those candidates, the European Parliament shall select one of those candidates. The candidate so selected shall be appointed by the Board of Supervisors. The Board of Supervisors shall also elect from among its members an alternate who shall carry out the functions of the Chairperson in his absence. That alternate shall not be a member of the Management Board.

The Board of Supervisors shall also elect from among its members an alternate who shall carry out the functions of the Chairperson in his absence.

 

Amendment  190

Proposal for a regulation

Article 33 – paragraph 4 –subparagraph 1 - introductory part

Text proposed by the Commission

Amendment

4.        In the course of the nine months preceding the end of the five-year term of office of the Chairperson, the Board of Supervisors shall evaluate:

4.        In the course of the nine months preceding the end of the five-year term of office of the Chairperson, the European Parliament shall evaluate:

Amendment  191

Proposal for a regulation

Article 33 – paragraph 5 – subparagraph 1

Text proposed by the Commission

Amendment

5.        The Chairperson may be removed from office only upon Decision of the Board of Supervisors subject to confirmation by the European Parliament.

5.        The Chairperson may be removed from office only by the European Parliament following a decision of the Board of Supervisors.

Amendment  192

Proposal for a regulation

Article 34 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

Member States, Union institutions and any other public or private body shall not seek to influence the Chairperson in the performance of his or her tasks.

Amendment  193

Proposal for a regulation

Article 35 – paragraph 1

Text proposed by the Commission

Amendment

1. The European Parliament may invite the Chairperson or his or her alternate, while fully respecting his or her independence, to make a statement regularly before its competent committee and answer questions put by members of that committee.

1. The Chairperson shall make a statement before the European Parliament at least quarterly and shall answer any questions put by its members.

Amendment  194

Proposal for a regulation

Article 35 – paragraph 2

Text proposed by the Commission

Amendment

2.        The European Parliament may also call upon the Chairperson to submit a report on the performance of his duties.

2.        The Chairperson shall submit a report on the activities of the Authority to the European Parliament when requested and at least 15 days before making the statement referred to in paragraph 1.The report should include the responses given to the opinion issued by the Stakeholder Group. It shall also include any relevant information requested by the European Parliament on an ad-hoc basis.

Amendment  195

Proposal for a regulation

Article 35 – paragraph 2 (new)

Text proposed by the Commission

Amendment

 

2a.      The Chairperson shall also submit an annual report on the performance of his or her duties to the European Parliament.

Amendment  196

Proposal for a regulation

Article 36 – paragraph 2

Text proposed by the Commission

Amendment

2. The Executive Director shall be appointed by the Board of Supervisors on the basis of merit, skills, knowledge of financial market participants and markets, and experience relevant to financial supervision and regulation and managerial experience, following an open selection procedure.

2. The Executive Director shall be appointed by the Board of Supervisors on the basis of merit, skills, knowledge of financial institutions and markets, and experience relevant to financial supervision and regulation and managerial experience, following an open selection procedure organised and managed by the Commission and after confirmation by the European Parliament.

Amendment  197

Proposal for a regulation

Article 37 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

In accordance with the Staff Regulations referred to in Article 54, the Executive Director shall, after leaving the service, continue to be bound by the duty to behave with integrity and discretion as regards the acceptance of certain appointments or benefits.

Amendment  198

Proposal for a regulation

Article 37 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

Member States, the Union institutions and any other public or private body shall not seek to influence the Executive Director in the performance of his tasks.

Amendment  199

Proposal for a regulation

Article 39

Text proposed by the Commission

Amendment

1.        The Authority shall form part of the ESFS, which shall function as a network of supervisors.

deleted

2.        The ESFS shall comprise the following:

 

(a)       the authorities in the Member States as specified in Article 1(2) of this Regulation, Article 1(2) of Regulation (EC) No …/2009 [EIOPA] and Article 1(2) of Regulation (EC) No …/… [EBA],

 

(b)       the Authority,

 

(c)       the European Insurance and Occupational Pensions Authority set up under Article 1 of Regulation (EC) No …/…[EIOPA],

 

(d)       the European Banking Authority set up under Article 1 of Regulation (EC) No …/… [EBA],

 

(e)       the Joint Committee of European Supervisory Authorities provided for in Article 40,

 

(f)       the Commission for the purposes of carrying out the tasks referred to in Articles 7, 9 and 10.

 

3.        The Authority shall cooperate regularly and closely, ensure cross-sectoral consistency of work and arrive at joint positions in the area of supervision of financial conglomerates and on other cross-sectoral issues with the European Insurance and Occupational Pensions Authority and the European Banking Authority through the Joint Committee of European Supervisory Authorities set up in Article 40.

 

Amendment  200

Proposal for a regulation

Chapter IV – section 2 – title

Text proposed by the Commission

Amendment

JOINT COMMITTEE OF EUROPEAN SUPERVISORY AUTHORITIES

EUROPEAN SUPERVISORY AUTHORITY (JOINT COMMITTEE)

Amendment  201

Proposal for a regulation

Article 40 – paragraph 1

Text proposed by the Commission

Amendment

1.        A Joint Committee of the European Supervisory Authorities is hereby established.

1.        A European Supervisory Authority (Joint Committee) is hereby established and shall have its headquarters in Frankfurt.

Amendment  202

Proposal for a regulation

Article 40 – paragraph 2

Text proposed by the Commission

Amendment

2. The Joint Committee shall serve as a forum in which the Authority shall cooperate regularly and closely and ensure cross-sectoral consistency with the European Insurance and Occupational Pensions Authority and the Banking Authority.

2. The Joint Committee shall serve as a forum in which the Authority shall cooperate regularly and closely and ensure cross-sectoral consistency with the other ESAs, in particular regarding:

 

financial conglomerates;

 

accounting and auditing;

 

micro-prudential analyses of cross-sectoral developments, risks and vulnerabilities for financial stability;

 

retail investment products; and

 

anti-money laundering measures.

 

information exchange with the European Systemic Risk Board and developing the relationship between the European Systemic Risk Board and the European Supervisory Authorities.

Amendment  203

Proposal for a regulation

Article 40 – paragraph 3

Text proposed by the Commission

Amendment

3.        The Authority shall contribute adequate resources to the administrative support of the Joint Committee of European Supervisory Authorities. This includes staff, administrative, infrastructure, and operational expenses.

3.        The Joint Committee shall have a permanent secretariat, staffed on secondment from the three European Supervisory Authorities. The Authority shall contribute adequate resources to administrative, infrastructure and operational expenses.

Amendment  204

Proposal for a regulation

Article 40 a (new)

Text proposed by the Commission

Amendment

 

In the event that an institution identified in Article 12b(1) reaches across different sectors, the Joint Committee shall decide which European Supervisory Authority shall act as leading competent authority and/ or adopt binding decisions to resolve problems between the European Supervisory Authorities.

Amendment  205

Proposal for a regulation

Article 41 – paragraph 1

Text proposed by the Commission

Amendment

1.        The Joint Committee shall be composed of the Chairperson and the Chairpersons of the European Insurance and Occupational Pensions Authority and the European Banking Authority, and, where applicable, the Chairperson of a Sub-Committee established under Article 43.

1.        The Joint Committee shall have a Board composed of the Chairpersons of the European Supervisory Authorities, and, where applicable, the Chairperson of a Sub-Committee established under Article 43.

Amendment  206

Proposal for a regulation

Article 41 – paragraph 2

Text proposed by the Commission

Amendment

2. The Executive Director, the Commission and the ESRB shall be invited to the meetings of the Joint Committee of European Supervisory Authorities as well as the Sub-Committees mentioned in Article 43 as observers.

2. The Executive Director, a representative of the Commission and the ESRB shall be invited to the meetings of the Board of the Joint Committee as well as the Sub-Committees mentioned in Article 43 as observers.

Amendment  207

Proposal for a regulation

Article 41 – paragraph 3

Text proposed by the Commission

Amendment

3.        The chair of the Joint Committee of European Supervisory Authorities shall be appointed on an annual rotational basis from among the Chairpersons of the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority.

3.        The chair of the Joint Committee of shall be appointed on an annual rotational basis from among the Chairpersons of the European Supervisory Authority (Banking), the European Supervisory Authority (Insurance and Occupational Pensions) and the Authority. The Chairperson of the Joint Committee shall be a Vice-Chair of the European Systemic Risk Board.

Amendment  208

Proposal for a regulation

Article 41 – paragraph 4

Text proposed by the Commission

Amendment

4.        The Joint Committee of European Supervisory Authorities shall adopt and publish its own rules of procedure. The rules may specify further participants of the meetings of the Joint Committee.

4.        The Joint Committee shall adopt and publish its own rules of procedure. The rules may specify further participants of the meetings of the Joint Committee.

The Joint Committee of European Supervisory Authorities shall meet at least once every two months.

The Board of the Joint Committee shall meet at least once every two months.

Amendment  209

Proposal for a regulation

Article 42

Text proposed by the Commission

Amendment

Within the scope of its tasks in Chapter II, and notably with respect to the implementation of Directive 2002/87/EC, where relevant, the Authority shall reach joint positions with the European Insurance and Occupational Pensions Authority and with the European Banking Authority as appropriate.

Within the scope of its tasks in Chapter II, and notably with respect to the implementation of Directive 2002/87/EC, where relevant, the Authority shall reach joint positions with the European Supervisory Authority (Insurance and Occupational Pensions) and with the European Supervisory Authority (Banking) as appropriate.

Acts under Articles 7, 9, 10, or 11 of this Regulation in relation to the application of Directive 2002/87/EC and of any other legislation referred to in Article 1(2) that also falls within the area of competence of the European Insurance and Occupational Pensions Authority or the European Banking Authority shall be adopted by the Authority, the European Insurance and Occupational Pensions Authority, and the European Banking Authority, as appropriate, in parallel.

 

Amendment  210

Proposal for a regulation

Article 44

Text proposed by the Commission

Amendment

Composition

Board of appeal

1.        The Board of Appeal shall be a joint body of the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority.

1.        The Board of Appeal shall be a joint body of the three European Supervisory Authorities.

2.        The Board of Appeal shall be composed of six members and six alternates, who shall be individuals with relevant knowledge and experience, excluding current staff of the competent authorities or other national or Community institutions involved in the activities of the Authority.

2.        The Board of Appeal shall be composed of six members and six alternates with sufficient legal expertise to provide expert legal advice on the legality of Authority's exercise of its powers.

The Board of Appeal designates its President.

The Board of Appeal shall designate its President.

The decisions of the Board of Appeal shall be adopted on the basis of a majority of at least four of its six members.

 

The Board of Appeal shall be convened by its President when necessary.

 

3.        Two members of the Board of Appeal and two alternates shall be appointed by the Management Board of the Authority from a short-list proposed by the Commission, following a public call for expression of interest published in the Official Journal of the European Union, and after consultation of the Board of Supervisors.

3.        The members of the Board of Appeal and their alternates shall be appointed by the European Parliament from a short-list proposed by the Commission, following a public call for expression of interest published in the Official Journal of the European Union, and after consultation of the Board of Supervisors.

The other Members shall be appointed in accordance with Regulation (EC) No …/… [EIOPA] and Regulation (EC) No …/… [EBA].

 

4.        The term of office of the members of the Board of Appeal shall be five years. This term may be extended once.

4.        The decisions of the Board of Appeal shall be adopted on the basis of a majority of at least four of its six members.

5.        A member of the Board of Appeal, who was appointed by the Management Board of the Authority, may not be removed during his term of office, unless he has been found guilty of serious misconduct, and the Management Board takes a decision to that effect after consulting the Board of Supervisors.

5. The Board of Appeal shall be convened by its President when necessary.

6.        The Authority, the European Banking Authority, and the European Insurance and Occupational Pensions Authority shall ensure adequate operational and secretarial support for the Board of Appeal.

6. The Authority, the European Supervisory Authority (Banking) and the European Supervisory Authority (Insurance and Occupational Pensions) shall ensure adequate operational and secretarial support for the Board of Appeal through the Joint Committee.

Amendment  211

Proposal for a regulation

Article 45

Text proposed by the Commission

Amendment

Article 45

deleted

Independence and impartiality

 

1. The members of the Board of Appeal shall be independent in making their decisions. They shall not be bound by any instructions. They may not perform any other duties in the Authority, in its Management Board or in its Board of Supervisors.

 

2. Members of the Board of Appeal may not take part in any appeal proceedings if they have any personal interest therein, or if they have previously been involved as representatives of one of the parties to the proceedings, or if they have participated in the decision under appeal.

 

3. If, for one of the reasons referred to in paragraph 1 and 2 or for any other reason, a member of a Board of Appeal considers that a fellow member should not take part in any appeal proceedings, the member shall inform the Board of Appeal accordingly.

 

4. Any party to the appeal proceedings may object to the participation of a member of the Board of Appeal on any of the grounds referred to in paragraph 1 and 2, or if suspected of bias.

 

An objection may not be based on the nationality of members nor shall it be admissible if, while being aware of a reason for objecting, the party to the appeal proceedings has nonetheless taken a procedural step other than objecting to the composition of the Board of Appeal.

 

5. The Board of Appeal shall decide on the action to be taken in the cases specified in paragraphs 1 and 2 without the participation of the member concerned.

 

For the purpose of taking that decision, the member concerned shall be replaced on the Board of Appeal by his alternate, unless the alternate finds himself in a similar situation. Should this be the case, the Chairperson shall designate a replacement from among the available alternates.

 

6. The members of the Board of Appeal shall undertake to act independently and in the public interest.

 

For that purpose, they shall make a declaration of commitments and a declaration of interests indicating either the absence of any interest which may be considered prejudicial to their independence or any direct or indirect interest which might be considered prejudicial to their independence.

 

Those declarations shall be made public, annually and in writing.

 

Amendment  212

Proposal for a regulation

Article 46 – paragraph 1

Text proposed by the Commission

Amendment

1.        Any natural or legal person, including competent authorities, may appeal against a decision of the Authority referred to in Articles 9, 10 and 11 and any other decision taken by the Authority according to legislation as referred to in Article 1(2) which is addressed to that person, or against a decision which, although in the form of a decision addressed to another person, is of direct and individual concern to that person.

1.        Any natural or legal person, including competent authorities, may appeal against the legality of a decision of the Authority referred to in Articles 9, 10 and 11 and any other decision taken by the Authority according to legislation as referred to in Article 1(2) which is addressed to that person, or against a decision which, although in the form of a decision addressed to another person, is of direct and individual concern to that person.

Amendment  213

Proposal for a regulation

Article 46 – paragraph 4

Text proposed by the Commission

Amendment

4.        If the appeal is admissible, the Board of Appeal shall examine whether it is well-founded. It shall as often as necessary invite the parties to the appeal proceedings to file observations on notifications issued by itself or on communications from the other parties to the appeal proceedings, within specified time limits. Parties to the appeal proceedings shall be entitled to make an oral presentation.

4.        If the appeal is admissible, the Board of Appeal shall examine whether it is well-founded. It shall invite the parties to the appeal proceedings to file observations on notifications issued by itself or on communications from the other parties to the appeal proceedings, within specified time limits. Parties to the appeal proceedings shall be entitled to make an oral presentation.

Amendment  214

Proposal for a regulation

Article 47 – title

Text proposed by the Commission

Amendment

Actions before the Court of First Instance and the Court of Justice

Actions before the General Court and the Court of Justice

 

(This amendment applies throughout the text.)

Amendment  215

Proposal for a regulation

Article 47 – paragraph 1

Text proposed by the Commission

Amendment

1. An action may be brought before the Court of First Instance or the Court of Justice, in accordance with Article 230 of the Treaty, contesting a decision taken by the Board of Appeal or, in cases where there is no right of appeal before the Board of Appeal, by the Authority.

1. An action may be brought before the Court of First Instance or the Court of Justice, in accordance with Article 263 of the Treaty on the Functioning of the European Union, contesting a decision taken by the Board of Appeal or, in cases where there is no right of appeal before the Board of Appeal, by the Authority.

Amendment  216

Proposal for a regulation

Article 47 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. Member States and the Union institutions, as well as any natural or legal person, may lodge a direct appeal before the Court of Justice against decisions of the Authority, in accordance with Article 263 of the Treaty on the Functioning of the European Union.

Amendment  217

Proposal for a regulation

Article 47 – paragraph 2

Text proposed by the Commission

Amendment

2. In the event that the Authority has an obligation to act and fails to take a decision, proceedings for failure to act may be brought before the Court of First Instance or the Court of Justice in accordance with Article 232 of the Treaty.

2. In the event that the Authority has an obligation to act and fails to take a decision, proceedings for failure to act may be brought before the Court of First Instance or the Court of Justice in accordance with Article 265 of the Treaty on the Functioning of the European Union.

Amendment  218

Proposal for a regulation

Article 48 – paragraph 1

Text proposed by the Commission

Amendment

1.        The revenues of the Authority shall consist, in particular, of:

1.        The revenues of the Authority shall consist in particular, of:

(a)       obligatory contributions from the competent national supervisory authority or authorities;

 

(b)       a subsidy from the Community, entered in the General Budget of the European Union (Commission Section);

(a)       a subsidy from the Union, shown in a separate budget heading in Section [XII] of the General Budget of the European Union;

(c)       any fees paid to the Authority in the cases specified in the relevant instruments of Community law.

(b)       any fees paid to the Authority in the cases specified in the relevant instruments of Union law.

Amendment  219

Proposal for a regulation

Article 48 – paragraph 2

Text proposed by the Commission

Amendment

2. The expenditure of the Authority shall include, at least, staff, remuneration, administrative, infrastructure, and operational expenses.

2. The expenditure of the Authority shall include, at least, staff, remuneration, administrative, infrastructure, professional training and operational expenses.

Amendment  220

Proposal for a regulation

Article 49 – paragraph 1

Text proposed by the Commission

Amendment

1. By 15 February each year, the Executive Director shall draw up a draft statement of estimates of revenue and expenditure for the following financial year, and shall forward this preliminary draft budget to the Management Board, together with the establishment plan. Each year, the Management Board shall, on the basis of the preliminary draft drawn up by the Executive Director, produce a statement of estimates of revenue and expenditure of the Authority for the following financial year. That statement of estimates, including a draft establishment plan, shall be transmitted by the Management Board to the Commission by 31 March. Prior to adoption of the statement of estimates, the draft prepared by the Executive Director shall be approved by the Board of Supervisors.

1. After the first year of operation of the Authority, ending on 31 December 2011,, the Executive Director shall, by 15 February each year, draw up a draft statement of estimates of revenue and expenditure for the following financial year, and shall forward this preliminary draft budget to the Management Board and the Board of Supervisors, together with the establishment plan. Each year, the Management Board shall, on the basis of the preliminary draft drawn up by the Executive Director and approved of the Management Board, produce a statement of estimates of revenue and expenditure of the Authority for the following financial year. That statement of estimates, including a draft establishment plan, shall be transmitted by the Board of Supervisors to the Commission by 31 March. Prior to adoption of the statement of estimates, the draft prepared by the Executive Director shall be approved by the Management Board.

Justification

It is proposed that for the first year of operation of the ESAs ending 31 December 2011, their budgets will be approved by the Members of the respective L3 Committees, following consultation with the Commission and then transmitted to the Council and Parliament for endorsement. This is fundamentally important to ensure the operational independence of the ESAs so that they start operating on a firm financial footing. This independence is balanced by accountability to the EU political institutions.

Amendment  221

Proposal for a regulation

Article 49 – paragraph 3

Text proposed by the Commission

Amendment

3. On the basis of the statement of estimates, the Commission shall enter in the preliminary draft General Budget of the European Union the estimates it deems necessary in respect of the establishment plan and the amount of the subsidy to be charged to the general budget of the European Union in accordance with Article 272 of the Treaty.

3. On the basis of the statement of estimates, the Commission shall enter in the preliminary draft General Budget of the European Union the estimates it deems necessary in respect of the establishment plan and the amount of the subsidy to be charged to the general budget of the European Union in accordance with Articles 313 and 314 of the Treaty on the Functioning of the European Union.

Amendment  222

Proposal for a regulation

Article 49 – paragraph 6 a (new)

Text proposed by the Commission

Amendment

 

6a. For the first year of operation of the Authority, ending on 31 December 2011, the budget shall be approved by the Members of the Level 3 Committee, following consultation with the Commission and then transmitted to the European Parliament and the Council for endorsement.

Justification

It is proposed that for the first year of operation of the ESAs ending 31 December 2011, their budgets will be approved by the Members of the respective L3 Committees, following consultation with the Commission and then transmitted to the Council and Parliament for endorsement. This is fundamentally important to ensure the operational independence of the ESAs so that they start operating on a firm financial footing. This independence is balanced by accountability to the EU political institutions.

Amendment  223

Proposal for a regulation

Article 50 – paragraph 9

Text proposed by the Commission

Amendment

9. The European Parliament, following a recommendation from the Council acting by qualified majority, shall, before 15 May of the year N + 2, grant a discharge to the Authority for the implementation of the budget for the financial year N.

9. The European Parliament, following a recommendation from the Council acting by qualified majority, shall, before 15 May of the year N + 2, grant a discharge to the Authority for the implementation of the budget comprising revenue from the General Budget of the European Union and fees paid to the authorities for the financial year N.

Amendment  224

Proposal for a regulation

Article 54 – paragraph 1

Text proposed by the Commission

Amendment

1. The Staff Regulations, the Conditions of employment of other servants and the rules adopted jointly by the European Community institutions for the purpose of applying these shall apply to the staff of the Authority, including its Executive Director.

1. The Staff Regulations, the Conditions of employment of other servants and the rules adopted jointly by the European Union institutions for the purpose of applying these shall apply to the staff of the Authority, but not to the Chairpeson.

Justification

The Chairperson should not be subject to the EU staff regulation. The terms and conditions of employment for the Chairperson should be determined by the Board of Supervisors as it is already the case for the President and members of the executive board of the European Central Bank. Bearing in mind the fact that the Chairs will be part of the ESRB and its Steering Committee, a consistent approach with that of ECB is appropriate.

Amendment  225

Proposal for a regulation

Article 54 – paragraph 2

Text proposed by the Commission

Amendment

2. The Management Board, in agreement with the Commission, shall adopt the necessary implementing measures, in accordance with the arrangements provided for in Article 110 of the Staff Regulations.

2. The Management Board, in agreement with the Commission, shall adopt the necessary implementing measures, in accordance with the arrangements provided for in Article 110 of the Staff Regulations. The implementing measures shall allow justified deviations in order to guarantee the most effective implementation of the tasks identified for the Authority.

Amendment  226

Proposal for a regulation

Article 55 – paragraph 1

Text proposed by the Commission

Amendment

1. In the case of non-contractual liability, the Authority shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by it or by its staff in the performance of their duties. The Court of Justice shall have jurisdiction in any dispute over the remedying of such damage.

1. In the case of non-contractual liability, the Authority shall, in accordance with the general principles common to the laws of the Member States, make good any unjustified damage caused by it or by its staff in the performance of their duties. The Court of Justice shall have jurisdiction in any dispute over the remedying of such damage.

Justification

During the course of its actions it may be that the ESA causes damages to individual financial institutions in order to ensure the greater good. Such damage would be justifiable in the context of ensuring systemic stabilty and as such the ESA should not be held liable for such damage.

Amendment  227

Proposal for a regulation

Article 56 – paragraph 1

Text proposed by the Commission

Amendment

1. Members of the Board of Supervisors and the Management Board, the Executive Director, and members of the staff of the Authority including officials seconded by Member States on a temporary basis shall be subject to the requirements of professional secrecy pursuant to Article 287 of the Treaty and the relevant provisions in the relevant community legislation, even after their duties have ceased.

1. Members of the Board of Supervisors and the Management Board, the Executive Director, and members of the staff of the Authority including officials seconded by Member States on a temporary basis shall be subject to the requirements of professional secrecy pursuant to Article 339 of the Treaty on the Functioning of the European Union.and the relevant provisions in Union legislation, even after their duties have ceased.

Amendment  228

Proposal for a regulation

Article 56 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2.        Without prejudice to cases covered by criminal law, any confidential information received by persons referred to in paragraph 1 whilst performing their duties may not be divulged to any person or authority whatsoever, except in summary or aggregate form, such that individual financial market participants cannot be identified.

2.        Without prejudice to cases covered by criminal law, any confidential information received by persons referred to in paragraph 1 whilst performing their duties may not be divulged to any person or authority whatsoever, except in summary or aggregate form, such that individual financial institutions cannot be identified.

Amendment  229

Proposal for a regulation

Article 56 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

3.        Paragraphs 1 and 2 shall not prevent the Authority from exchanging information with national supervisory authorities in accordance with this Regulation and other community legislation applicable to financial market participants.

3.        Paragraphs 1 and 2 shall not prevent the Authority from exchanging information with national supervisory authorities in accordance with this Regulation and other Union legislation applicable to financial institutions.

Amendment  230

Proposal for a regulation

Article 58 – paragraph 3

Text proposed by the Commission

Amendment

3. Decisions taken by the Authority pursuant to Article 8 of Regulation (EC) No 1049/2001 may be the subject of a complaint to the Ombudsman or of proceedings before the Court of Justice, following appeal to the Board of Appeal, as appropriate, in accordance with the conditions laid down in Articles 195 and 230 of the Treaty respectively.

3. Decisions taken by the Authority pursuant to Article 8 of Regulation (EC) No 1049/2001 may be the subject of a complaint to the Ombudsman or of proceedings before the Court of Justice, following appeal to the Board of Appeal, as appropriate, in accordance with the conditions laid down in Articles 228 and 263 of the Treaty on the Functioning of the European Union respectively.

Amendment  231

Proposal for a regulation

Article 61 – paragraph 1

Text proposed by the Commission

Amendment

Participation in the work of the Authority shall be open to countries which are not members of the European Union and which have concluded agreements with the Community whereby they have adopted and are applying Community law in the area of competence of the Authority as referred to in Article 1(2).

1. Participation in the work of the Authority shall be open to countries which are not members of the European Union and which have concluded agreements with the Union whereby they have adopted and are applying Union law in the area of competence of the Authority as referred to in Article 1(2).

Amendment  232

Proposal for a regulation

Article 61 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. Participation in the work of the Authority which is of direct interest to them shall also be open to third countries applying legislation which has been recognised as equivalent in the areas of competence of the Authority referred to in Article 1(2), subject to the conclusion of agreements with the Union.

Amendment  233

Proposal for a regulation

Article 61 – paragraph 2

Text proposed by the Commission

Amendment

Under the relevant provisions of these agreements, arrangements shall be made specifying, in particular, the nature, scope and procedural aspects of the involvement of these countries in the work of the Authority, including provisions relating to financial contributions and to staff. They may provide for representation, as an observer, on the Board of Supervisors, but shall ensure that these countries do not attend any discussions relating to individual financial market participants, except where there is a direct interest.

2.        Under the relevant provisions of these agreements, arrangements shall be made specifying, in particular, the nature, scope and procedural aspects of the involvement of these countries in the work of the Authority, including provisions relating to financial contributions and to staff. They may provide for representation, as an observer, on the Board of Supervisors, but shall ensure that these countries do not attend any discussions relating to individual financial institutions, except where there is a direct interest.

Amendment  234

Proposal for a regulation

Article 62 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

For that purpose, until such time as the Executive Director takes up his duties following his appointment by the Board of Supervisors in accordance with Article 36, the Commission may assign one official on an interim basis in order to fulfil the functions of the Executive Directors.

deleted

Amendment  235

Proposal for a regulation

Article 62 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a.      During the period after the entry into force of this Regulation, and before the establishment of the Authority, the Level 3 Committee shall act in close co-operation with the Commission to prepare for the replacement of the Level 3 Committee by the Authority. The Level 3 Committees may take all useful preparatory actions, subject to final decision by the relevant bodies of the Authority.

Amendment  236

Proposal for a regulation

Article 62 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

1b.      During the period from the entry into force of this Regulation and the date of the designation of the Chairperson and the members of the Management Board, and of the appointment the Executive Director, the Authority shall be provisionally chaired by the Chair of the existing Level 3 Committee and managed by its Secretary General.

Amendment  237

Proposal for a regulation

Article 62 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a.      The Authority shall be considered the legal successor of the Committee of European Securities Regulators. By the date of establishment of the Authority, all assets and liabilities and all pending operations of the Committee of European Securities Regulators shall be transferred to the Authority. The Committee of European Securities Regulator shall issue a statement showing its closing asset and liabilities at the date of that transfer. That statement shall be audited and approved by its members and by the Commission.

Amendment  238

Proposal for a regulation

Article 63 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. All members of staff under contracts referred to in paragraph 1 shall be offered the possibility of concluding temporary agent contracts under Article 2(a) of the Conditions of Employment of Other Servants at the various grades as set out in the Authority’s establishment plan.

2. In order to allow the smooth transition of the existing staff to the Authority, all members of staff under contracts referred to in paragraph 1, including those under secondment contracts, shall be offered the possibility of concluding temporary agent contracts with equivalent or comparable economic and legal conditions, in accordance with the relevant legal framework.

Justification

It is proposed to provide for specific transitional provisions related to the existing staff of the Level 3 Committees.

Amendment  239

Proposal for a regulation

Article 63 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

An internal selection limited to staff who have contracts with the Committee of European Securities Regulators or its Secretariat shall be carried out after the entry into force of this Regulation by the authority authorised to conclude contracts in order to check the ability, efficiency and integrity of those to be engaged.

An internal selection limited to staff who have contracts with the Level 3 Committee or its Secretariat shall be carried out after the entry into force of this Regulation by the authority authorised to conclude contracts in order to check the ability, efficiency and integrity of those to be engaged. The internal selection procedure shall take full account of the skills and experience demonstrated by the individual in the performance of his/ her role prior to the transition.

Justification

It is proposed to provide for specific transitional provisions related to the existing staff of the Level 3 Committees.

Amendment  240

Proposal for a regulation

Article 66 – paragraph -1 a (new)

Text proposed by the Commission

Amendment

 

-1a.     By ...*, the Commission shall submit to the Council and the European Parliament the necessary regulations to ensure a smooth shift to the supervision of institutions identified under article 12b by the Authority and the establishment of a new framework for financial crisis management.

 

___________

* OJ please insert date: six months from the date of entry into force of this Regulation.

Amendment  241

Proposal for a regulation

Article 66 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

That report shall also evaluate progress achieved towards regulatory and supervisory convergence in the fields of crisis management and resolution in the Community. The evaluation shall be based on extensive consultation, including with the Securities and Markets Stakeholder Group.

That report shall evaluate, inter alia:

 

(a) the convergence in supervisory standard practices reached by competent authorities;

 

(b) the functioning of the colleges of supervisors;

 

(c) the role of the Authority on the supervision of systemic institutions; and

 

(d) the application of the Safeguard clause established in Article 23.

Amendment  242

Proposal for a regulation

Article 66 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a.      The report referred to in paragraph 1 shall also examine whether:

 

(a)       it is appropriate to continue separate supervision of banking, insurance, occupational pensions, securities and financial markets, or whether they should be brought under a single supervisor ;

 

(b)       prudential supervision and supervision of the conduct of business should be combined or separated;

 

(c)       it is appropriate to simplify and reinforce the architecture of the ESFS, in order to increase the coherence between the macro and the micro levels and between the ESAs;

 

(d)       it is appropriate to increase the regulatory powers of the ESAs;

 

(e)        the evolution of the ESFS is consistent with that of the global evolution;

 

(f)       there is sufficient diversity and excellence within the ESFS;

 

(g)       accountability and transparency in relation to publication requirements are adequate.

(1)

     OJ C 139, 14.6.2006, p. 1.


EXPLANATORY STATEMENT

Background

Since the launching of the Financial Service Action Plan, the European Parliament has been a central actor in the construction of a single market for financial services, actively promoting harmonisation, transparency and fair competition, while ensuring investors and consumer protection.

Already long before the financial crisis the European Parliament has been calling regularly for the reinforcement of the true level playing field for all actors at the European level while pointing out important failures in Europe's supervision of ever more integrated financial markets (see García-Margallo y Marfil Report on the Commission communication on implementing the framework for financial markets: Action Plan (2000)(1), Van den Burg Report on prudential supervision rules in the European Union (2002)(2), Van den Burg Report on financial services policy (2005–2010) – White Paper (2007)(3) and Van den Burg & Daianu Report with recommendations to the Commission on Lamfalussy follow-up: future structure of supervision (2008)(4)). In addition, some specific pieces of legislation already outlined the key principles or indicated the general trend towards what should be EU future supervisory architecture (Skinner – Solvency II report (2009); Gauzès-CRA regulation (2009)).

In all European Parliament reports the European Commission was called upon to analyse how progress towards a more integrated supervisory structure could be achieved in parallel to striving for an integrated single market for financial services. It also noted the need for effective oversight of the systemic and prudential risks of the top market players. Macro-prudential analysis and crisis management should be part of the mandate to safeguard financial stability. The European Parliament supports the establishment of a Single European Supervisor for cross-border institutions at EU level and of establishing a European mechanism to solve the crisis that affects them.

The European Commission decided to convene a group of high level experts to make proposals to strengthen European supervisory arrangements. The De Larosiere group presented its report in February 2009 and on 23 September 2009 the Commission came forward with concrete legislative proposals which should have the aim to:

–  Establish a network of national financial supervisors working in tandem with a new European Supervisory Authority (ESA). This authority shall have three pillars. Each pillar shall build on the European supervisory committees(5), i.e. leading to a pillar for Banking (ESA (B)), a pillar for Insurance and Occupational Pensions (ESA (IOP)), and a pillar for Securities and Markets Authority ESA (SMA), a "Joint Committee of the European Supervisory Authority" shall ensure appropriate consolidated regulation and supervision of European financial markets.

–  Establish a European Systemic Risk Board (ESRB), to monitor and assess potential threats to financial stability that arise from macro-economic developments and from developments within the financial system as a whole. To this end, the ESRB would provide an early warning of system-wide risks that may be building up and, where necessary, issue recommendations for action to deal with these risks.(6)

According to the Court of Justice(7) Article 95 of the Treaty (now Article 114 of the Treaty on the Functioning of the European Union) relating to the adoption of measures for the approximation of legislation for the establishment and functioning of the internal market provides an appropriate legal basis for setting up a "Community body responsible for contributing to the implementation of a process of harmonisation", when the tasks conferred on such a body are closely related to the subject-matter of the acts approximating the national legislations.

These legislative proposals were followed on 26 October 2009 by a first omnibus directive amending 11 directives to more clearly define the tasks of the proposed supervisory architecture. A second omnibus directive should follow in the next months in order to complete the exercise.

(1)

OJ C 40, 7.2.2001, p. 453.

(2)

OJ C 25E, 29.1.2004, p. 394.

(3)

Not published in the Official Journal.

(4)

OJ C 9E, 15.1.2010, p. 48.

(5)

These are the Committee of European Banking Supervisors (CEBS), the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) and the Committee of European Securities Regulators (CESR).

(6)

It should be noted that this explanatory memorandum focuses on the proposals to establish the ESFS by transforming the existing European supervisory committees into ESAs. The proposal to establish the ESRB is being discussed in a separate memorandum.

(7)

See CJCE, C-217/04, pt. 44.


OPINION of the Committee on Budgets (29.4.2010)

for the Committee on Economic and Monetary Affairs

on the proposal for a regulation of the European Parliament and of the Council establishing a European Securities and Markets Authority

(COM(2009)0503 – C7-0167/2009 – 2009/0144(COD))

Rapporteur: Jutta Haug

SHORT JUSTIFICATION

1. In order to address the failures of the European financial supervision revealed by the recent financial crisis, the Commission presented a package of proposals in view of the establishment of a more efficient, more integrated and sustainable system of financial supervision in the EU. This will be based on a an European System of Financial Supervisors (ESFS), consisting of a network of national financial supervisors working in tandem with new European Supervisory Authorities (ESAs), created by transforming the existing European supervisory committees(1) into real European Supervision Authorities (ESAs). For that end, the Commission proposes the creation of three new European decentralised agencies:

· the European Banking Authority (EBA);

· the European Insurance and Occupational Pensions Authority (EIOPA);

· the European Securities and Markets Authority (ESMA).

2. The transformation of the existing European supervisory committees into effective real European supervisory authorities, i.e. European agencies, will require enhanced resources - both in staff and budget. In what concerns the impact of the creation of these three agencies for the European budget, it will amount to some EUR 59,699 millions distributed as follows:

Agency

2011

2012

2013

Total

EBA

5, 206

7, 355

8, 965

21, 527

EIOPA

4, 235

5, 950

6, 799

16, 984

ESMA

5, 465

7, 202

8, 491

21, 158

in millions Euros.

3. These funds will come from Heading 1a, but this heading is already confronted with extremely reduced margins: the last financial programming of the Commission (January 2010), which already took into consideration the amounts for the three agencies (amongst other modifications), points for very narrow margins until the end of the current MFF (between brackets the margins foreseen in the financial programming of January 2009):

- EUR 37,041 Mio for 2011 (111,590 Mio)

- EUR 34,003 Mio for 2012 (123,879 Mio)

- EUR 49,153 Mio for 2013 (214,875 Mio).

If one considers that in financial programming of February 2009 the Commission was foreseeing a margin for Heading 1A of EUR 111,8 Mio for 2010 and it turned out to be of only EUR 147.000, it is clear that the situation is very delicate. Thus, the need for a possible revision of the ceilings in order to satisfy the financing of these three new agencies must be taken into account.

4. In fact, the real cost of the agencies will be far superior, as it will amount to some EUR 149,17 Mio, but Member States will contribute, via co-financing, with some EUR 89,497mio, be it 60% of the global costs of the functioning of the agencies until the end of the current MFF:

Agency

2011

2012

2013

TOTAL

EBA

MS+UE=Total

7, 809+5,206

=13,015

11, 033+7,355

=18, 388

13, 448+8,965

=22, 413

32,290+21, 527

=53, 816

EIOPA

MS+UE=Total

8, 197+4,235

=13, 662

10, 803+5,950

=18, 005

12, 737+6, 799

=21, 228

31,737+16, 984

=52,895

ESMA

MS+UE=Total

6, 352+5,465

=10,587

8, 925+7, 202

=14, 874

10,199+8,491

=16, 998

25,476+21, 158

=42, 459

in millions Euros

5. Concerning staff, the 3 new agencies will imply, by 2014, more 269 agents (224 AD and 45 AST):

Agency

2011

2012

2013

2014

EBA

staff(AD/AST)

40(36/4)

62(53/9)

80(69/11)

90(73/17)

EIOPA

staff(AD/AST)

40 (32/8)

62(50/12)

73 (60/13)

90 (77/13)

ESMA

staff(AD/AST)

43 (35/8)

60 (50/10)

76 (64/12)

89 (74/15)

6. The Commission is proposing that the three new agencies have their seats in the current places of work of the European supervisory committees, (Paris, in the case of ESMA) which seems a very reasonable solution from both the practical and financial point of view, as it will facilitate the immediate entering into functions of the new agency and avoid unnecessary expenditure with new installations, transfer of staff etc.

AMENDMENTS

The Committee on Budgets calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1

Draft legislative resolution

Paragraph 1 a (new)

Draft legislative resolution

Amendment

 

1a. Considers that the reference amount indicated in the legislative proposal is compatible with the ceiling for subheading 1a of multiannual financial framework for 2007-2013 (MFF), but the margin remaining in heading 1a for 2011-2013 is very limited and the funding of new activities must not jeopardise the financing of other priorities under subheading 1a; reiterates, therefore, its call for a review of the MFF, accompanied by concrete proposals to adjust and revise it before the end of first semester 2010 by using all the mechanisms available under the Interinstitutional Agreement of 17 May 2006 (IIA), and, in particular, those in points 21 to 23 thereof, in order to ensure the financing of the European Securities and Markets Authority (Authority) without jeopardising the financing of the other priorities, and ensuring that a sufficient margin will remain, under subheading 1a;

Amendment  2

Draft legislative resolution

Paragraph 1 b (new)

Draft legislative resolution

Amendment

 

1b. Underlines that the provisions of point 47 of the IIA shall be applied for the setting-up of the Authority; stresses that, should the legislative authority decide in favour of setting up the Authority, Parliament will enter into negotiations with the other arm of the budgetary authority with a view to coming to a timely agreement on the financing of the Agency in line with the relevant provisions of the IIA;

Amendment  3

Proposal for a regulation

Recital 41

Text proposed by the Commission

Amendment

(41) In order to guarantee its full autonomy and independence, the Authority should be granted an autonomous budget with revenues mainly from obligatory contributions from national supervisory authorities and from the General Budget of the European Union. The Community budgetary procedure should be applicable as far as the Community contribution is concerned. The auditing of accounts should be undertaken by the Court of Auditors.

(41) In order to guarantee its full autonomy and independence, the Authority should be granted an autonomous budget with revenues mainly from obligatory contributions from national supervisory authorities and from the General Budget of the European Union. Union financing of the Authority is subject to an agreement by the budgetary authority in accordance with Point 47 of the Interinstitutional Agreement between the European Parliament, the Council and the Commission of 17 May 2006 on budgetary discipline and sound financial management1 (IIA). The Union budgetary procedure should be applicable. The auditing of accounts should be undertaken by the Court of Auditors. The overall budget is subject to the discharge procedure.

 

1 OJ C 139, 14.6.2006, p. 1.

Justification

The Authority is set up as a European Union decentralised agency and will be financed in accordance with the IIA. This should be reflected in its legal base.

Amendment  4

Proposal for a regulation

Article 48 – paragraph 1 – point a

Text proposed by the Commission

Amendment

(a) obligatory contributions from the competent national supervisory authority or authorities;

(a) obligatory contributions from the national public authorities competent for the supervision of financial institutions, which shall be made in accordance with a formula based on the weighting of votes set out in Article 3(3) of the Protocol (N° 36) on Transitional Provisions, annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union;

Amendment  5

Proposal for a regulation

Article 48 – paragraph 1 – point b

Text proposed by the Commission

Amendment

(b) a subsidy from the Community, entered in the General Budget of the European Union (Commission Section);

(b) a subsidy from the Union, entered in the General Budget of the European Union (Commission Section), subject to an agreement by the budgetary authority as provided for by Point 47 of the IIA;

Amendment  6

Proposal for a regulation

Article 48 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. The obligatory contributions from the national public authorities and the subsidy from the Union, under paragraph 1(a) and (b), shall be available at the beginning of each financial year.

Amendment  7

Proposal for a regulation

Article 50 – paragraph 9

Text proposed by the Commission

Amendment

9. The European Parliament, following a recommendation from the Council acting by qualified majority, shall, before 15 May of the year N + 2, grant a discharge to the Authority for the implementation of the budget for the financial year N.

9. The European Parliament, following a recommendation from the Council acting by qualified majority, shall, before 15 May of the year N + 2, grant a discharge to the Authority for the implementation of the budget comprising revenues from the General Budget of the European Union and national supervisory authorities for the financial year N.

Amendment  8

Proposal for a regulation

Article 54 – paragraph 2

Text proposed by the Commission

Amendment

2. The Management Board, in agreement with the Commission, shall adopt the necessary implementing measures, in accordance with the arrangements provided for in Article 110 of the Staff Regulations.

2. The Management Board,

in agreement with the Commission, shall adopt the necessary implementing measures, in accordance with the arrangements provided for in Article 110 of the Staff Regulations. The implementing measures shall allow justified deviations in order to guarantee the most effective implementation of the tasks identified for the Authority.

PROCEDURE

Title

European Securities and Markets Authority

References

COM(2009)0503 – C7-0167/2009 – 2009/0144(COD)

Committee responsible

ECON

Opinion by

       Date announced in plenary

BUDG

7.10.2009

 

 

 

Rapporteur

       Date appointed

Jutta Haug

21.10.2009

 

 

Date adopted

28.4.2010

 

 

 

Result of final vote

+:

–:

0:

38

0

0

Members present for the final vote

Damien Abad, Alexander Alvaro, Marta Andreasen, Francesca Balzani, Reimer Böge, Giovanni Collino, Jean-Luc Dehaene, Isabelle Durant, Göran Färm, José Manuel Fernandes, Eider Gardiazábal Rubial, Salvador Garriga Polledo, Ivars Godmanis, Estelle Grelier, Carl Haglund, Jutta Haug, Jiří Havel, Sidonia Elżbieta Jędrzejewska, Anne E. Jensen, Ivailo Kalfin, Sergej Kozlík, Jan Kozłowski, Alain Lamassoure, Vladimír Maňka, Barbara Matera, Claudio Morganti, Nadezhda Neynsky, Miguel Portas, Dominique Riquet, Sergio Paolo Francesco Silvestris, László Surján, Helga Trüpel, Daniël van der Stoep, Derek Vaughan, Angelika Werthmann

Substitute(s) present for the final vote

Franziska Katharina Brantner, Giovanni La Via, Peter Šťastný

(1)

These are the Committee of European Banking Supervisors (CEBS), the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) and the Committee of European Securities Regulators (CESR).


OPINION of the Committee on Legal Affairs (30.4.2010)

for the Committee on Economic and Monetary Affairson the proposal for a regulation of the European Parliament and of the Council establishing a European Securities and Markets Authority

(COM(2009)0503 – C7-0167/2009 – 2009/0144(COD))

Rapporteur: Raffaele Baldassarre

SHORT JUSTIFICATION

Background

Building upon the recommendations of the De Larosière report, the Commission issued proposals for a new European financial supervisory architecture. These legislative proposals, published by the Commission on 23 September 2009, aim to create:

-          a European System of Financial Supervisors (ESFS) for the supervision of individual financial institutions (“micro-prudential supervision”), consisting of a network of national supervisors working in tandem with new European Supervisory Authorities (ESAs(1) ), thereby combining an overarching European framework for financial supervision with the expertise of local and micro-prudential supervisory bodies;

-          a European Systemic Risk Board (ESRB), to monitor and assess risks to the stability of the financial system as a whole (“macro-prudential supervision”).

The ESAs will be Community bodies with legal personality and their objectives shall be to contribute to: (i) improving the level of regulation and supervision in the internal market, (ii) ensuring the integrity and orderly running/functioning of financial markets, and (iii) safeguarding the stability of the financial system while strengthening the coordination of supervision at European and international levels.

Position of the rapporteur

Your rapporteur supports the main thrust of the proposal and intends the opinion of the Committee on Legal Affairs to constructively feed into the work of the lead committee. He believes that far-reaching reforms to the EU’s financial markets and institutions are needed to increase competition by encouraging a level playing field and to ensure consistency of arrangements and regulation as far as possible. He considers that the proposal, with some fine-tuning and innovations as proposed in this draft opinion, is essential to ensure more effective supervision and rulemaking and to better identify risks in the financial system.

Your rapporteur strongly believes that any decision-making power of the Authority should not operate in a way which may undermine the ability of national supervisory bodies to discharge their regulatory duty or which may promote regulatory uncertainty for individual entities subject to local supervision(2). Therefore, the possibility for the Authority to adopt individual decisions relating to financial markets participants should be retained to emergency situations as specified in Article 10(3).

As regards day-to day situations, the Committee on Legal Affairs, based on a broadly supported compromise, adopted amendments as regards the powers of the Authorities to address individual decisions to market participants in every day situations (Articles 9(6) and 11(4)) proposing a procedure to be followed between the Authority and the Commission in order to better align the powers of the Authorities with the powers conferred on the Commission under Article 17(1) TEU and Article 258 TFEU.

Binding rules should be drafted exclusively at EU level, either by the EU institutions or by the ESAs, under the supervision of these institutions thus respecting the subsidiarity principle. Nonetheless, your rapporteur considers that it is vital to avoid interpretations which are not proportionate to the objective, are excessively detailed or, at times, inappropriate, as a result of having been drafted urgently, without any real dialogue. Therefore, your rapporteur strongly supports the participation of market participants during the decision-making process.

Cooperation and information-sharing between the micro and the macro levels is essential. However, it is important that any powers of the Authority in this area are consistent with the obligations of professional secrecy as set out in EU law so that confidential information remains unavailable to those bodies and authorities not entitled to it. It is also essential to take account of the fact that in some cases anonymising aggregated data to be disclosed beyond the competent authorities will be difficult(3). Accordingly, your rapporteur considers that confidential data needs to be protected on a consistent basis and in accordance with EU law.

Besides these main issues, your rapporteur strongly believes that the mediating role of the Authority should be better defined and further improved . Moreover, the Authority should enjoy a more international exposure while its agreements should remain non-binding . Additional measures should be promoted to enhance transparency and encourage the use of administrative standards.

Finally, your rapporteur considers that further thought should be given to ensure that consumers and investors protection in financial markets is reflected satisfactorily in the proposal.

AMENDMENTS

The Committee on Legal Affairs calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1

Proposal for a regulation

Recital 1

Text proposed by the Commission

Amendment

(1) The financial crisis in 2007/2008 exposed important shortcomings in financial supervision, both in particular cases and in relation to the financial system as a whole. Nationally-based supervisory models have lagged behind the integrated and interconnected reality of European financial markets, in which many financial firms operate across borders. The crisis exposed shortcomings in the area of cooperation, coordination, consistent application of Community law and trust between national supervisors.

(1) The financial crisis in 2007/2008 exposed important shortcomings in financial supervision, both in particular cases and in relation to the financial system as a whole. Nationally-based supervisory models have proven to be insufficient to cope with the integrated and interconnected reality of European financial markets, in which many financial firms operate across borders. The crisis exposed shortcomings in the area of cooperation, coordination, consistent application of Community law and trust between national supervisors.

Amendment  2

Proposal for a regulation

Recital 17

Text proposed by the Commission

Amendment

(17) Ensuring the correct and full application of Community law is a core prerequisite for the integrity, efficiency and orderly functioning of financial markets, the stability of the financial system, and for neutral conditions of competition for financial market participants in the Community. A mechanism should therefore be established whereby the Authority addresses instances of incorrect or insufficient application of Community law. This mechanism should apply in areas where Community legislation defines clear and unconditional obligations.

(17) Ensuring the correct and full application of Union law is a core prerequisite for the integrity, efficiency and orderly functioning of financial markets, the stability of the financial system, and for neutral conditions of competition for financial market participants in the Union. A mechanism should therefore be established whereby the Authority addresses instances of non-application of Union law. This mechanism should apply in areas where Community legislation defines clear and unconditional obligations.

Amendment  3

Proposal for a regulation

Recital 20

Text proposed by the Commission

Amendment

(20) To overcome exceptional situations of persistent inaction by the competent authority concerned, the Authority should be empowered, as a last resort, to adopt decisions addressed to individual financial institutions. This power should be limited to exceptional circumstances in which a competent authority does not comply with the decisions addressed to it and in which Community law is directly applicable to financial institutions by virtue of existing30 or future EU Regulations.

(20) To overcome exceptional situations of persistent inaction by the competent authority concerned, the Authority should be empowered, as a last resort and only in urgent situations, to adopt decisions addressed to individual financial institutions. This power should be limited to exceptional circumstances in which a competent authority does not comply with the decisions addressed to it and in which Community law is directly applicable to financial institutions by virtue of existing or future EU Regulations.

Amendment  4

Proposal for a regulation

Recital 25

Text proposed by the Commission

Amendment

(25) The Authority should actively foster supervisory convergence across the Community with the aim of establishing a common supervisory culture.

(25) The Authority should actively foster supervisory convergence across the Union with the aim of establishing a common supervisory culture whilst fully respecting Member States' fiscal responsibilities.

Amendment  5

Proposal for a regulation

Recital 28

Text proposed by the Commission

Amendment

(28) In order to safeguard financial stability it is necessary to identify, at an early stage, trends, potential risks and vulnerabilities stemming from the micro-prudential level, across borders and across sectors. The Authority should monitor and assess such developments in the area of its competence and, where necessary, inform the European Parliament, the Council, the Commission, the other European Supervisory Authorities and the European Systemic Risk Board on a regular and, as necessary, ad hoc basis. The Authority should also coordinate Community-wide stress tests to assess the resilience of financial market participants to adverse market developments, ensuring an as consistent as possible methodology is applied at the national level to such tests.

(28) In order to safeguard financial stability it is necessary to identify, at an early stage, trends, potential risks and vulnerabilities stemming from the micro-prudential level, across borders and across sectors. The Authority should monitor and assess such developments in the area of its competence and, on a regular basis, inform the European Parliament, the Council, the Commission, the other European Supervisory Authorities and the European Systemic Risk Board as well as the competent national authorities. The Authority should also coordinate Union-wide stress tests to assess the resilience of financial market participants to adverse market developments, ensuring an as consistent as possible methodology is applied at the national level to such tests.

Amendment  6

Proposal for a regulation

Recital 29

Text proposed by the Commission

Amendment

(29) Given the globalisation of financial services and the increased importance of international standards, the Authority should foster the dialogue and cooperation with supervisors outside the Community. It shall fully respect the existing roles and competences of the European Institutions in relations with authorities outside the Community and in international forums.

(29) Given the globalisation of financial services and the increased importance of international standards, the Authority should foster dialogue and cooperation with supervisors outside the Community. It shall fully respect the existing roles and competences of the European Institutions in relations with authorities outside the Union and in international forums. The Authority should also be able to benefit from the cooperation the Commission already enjoys with international forums.

Amendment  7

Proposal for a regulation

Recital 31

Text proposed by the Commission

Amendment

(31) In order to effectively carry out its duties, the Authority should have the right to request all necessary information. To avoid duplication of reporting obligations for financial market participants, that information should normally be provided by the national supervisory authorities who are closest to financial markets and market participants. However, the Authority should have the power to request information directly from financial market participants and other parties where a national competent authority does not or cannot provide such information in a timely fashion. Member States' authorities should be obliged to assist the Authority in enforcing such direct requests.

(31) In order to effectively carry out its duties, the Authority should have the right to request all necessary information. To avoid duplication of reporting obligations for financial market participants, that information should normally be provided by the national supervisory authorities who are closest to financial markets and market participants, subject to the requirement that confidential information is not made available to bodies or authorities that are not entitled to it. However, the Authority should have the power to request information directly from financial market participants and other parties where a national competent authority does not or cannot provide such information in a timely fashion. Member States' authorities should be obliged to assist the Authority in enforcing such direct requests.

Amendment  8

Proposal for a regulation

Recital 32

Text proposed by the Commission

Amendment

(32) Close cooperation between the Authority and the European Systemic Risk Board is essential to give full effectiveness to the functioning of the European Systemic Risk Board and the follow-up to its warnings and recommendations. The Authority should share any relevant information with the European Systemic Risk Board. Data related to individual undertakings should be provided only upon reasoned request. Upon receipt of warnings or recommendations addressed by the European Systemic Risk Board to the Authority or a national supervisory authority, the Authority should take immediate action and ensure follow-up.

(32) Close cooperation between the Authority and the European Systemic Risk Board is essential to give full effectiveness to the functioning of the European Systemic Risk Board and the follow-up to its warnings and recommendations. The Authority should share any relevant information with the European Systemic Risk Board. Data related to individual undertakings should be provided only upon reasoned request and should be protected systematically and in accordance with Union law. Upon receipt of warnings or recommendations addressed by the European Systemic Risk Board to the Authority or a national supervisory authority, the Authority should take immediate action and ensure follow-up.

Amendment  9

Proposal for a regulation

Recital 34

Text proposed by the Commission

Amendment

(34) Member States have a core responsibility in preserving financial stability in crisis management, in particular with regard to stabilising and resolving individual ailing financial market participants. Measures by the Authority in emergency or settlement situations affecting the stability of a financial market participant should not impinge on the fiscal responsibilities of Member States. A mechanism should be established whereby Member States may invoke this safeguard and ultimately bring the matter before the Council for decision. It is appropriate to confer on the Council a role in this matter given the particular responsibilities of the Member States in this respect.

(34) Member States have a core responsibility in preserving financial stability in crisis situations, in particular with regard to stabilising and resolving individual ailing financial institutions. Measures by the Authority in emergency or settlement situations affecting the stability of a financial institution should not impinge on the fiscal responsibilities of Member States. A mechanism should be established whereby Member States may request that the decision of the Authority be reconsidered.

Amendment  10

Proposal for a regulation

Article 1 – paragraph 2

Text proposed by the Commission

Amendment

2. The Authority shall act within the scope of Directive 97/9/EC, Directive 98/26/EC, Directive 2001/34/EC, Directive 2002/47/EC, Directive 2002/87/EC, Directive 2003/6/EC, Directive 2003/71/EC, Directive 2004/25/EC, Directive 2004/39/EC, Directive 2004/109/EC, Directive 2005/60/EC, Directive 2009/65/EC, Directive 2002/65/EC, Directive 2006/49/EC (without prejudice to the competence of the European Banking Authority in terms of prudential supervision), Directive … [future AIFM Directive], and Regulation … [future CRA Regulation], including all directives, regulations, and decisions based on these acts, and of any further Community act which confers tasks on the Authority.

2. The Authority shall act within the scope of Directive 97/9/EC, Directive 98/26/EC, Directive 2001/34/EC, Directive 2002/47/EC, Directive 2002/87/EC, Directive 2003/6/EC, Directive 2003/71/EC, Directive 2004/39/EC, Directive 2004/109/EC, Directive 2005/60/EC, Directive 2009/65/EC, Directive 2002/65/EC, Directive 2006/49/EC (without prejudice to the competence of the European Banking Authority in terms of prudential supervision), Directive … [future AIFM Directive], and Regulation … [future CRA Regulation], including all directives, regulations, and decisions based on these acts, and of any further Community act which confers tasks on the Authority.

Amendment  11

Proposal for a regulation

Article 1 – paragraph 4

Text proposed by the Commission

Amendment

4. The objective of the Authority shall be to contribute to: (i) improving the functioning of the internal market, including in particular a high, effective and consistent level of regulation and supervision, (ii) protecting protect investors, (iii) ensuring the integrity, efficiency and orderly functioning of financial markets, (iv) safeguarding the stability of the financial system, and (v) strengthening international supervisory coordination. For this purpose, the Authority shall contribute to ensuring the consistent, efficient and effective application of the Community law referred to in Article 1(2) above, fostering supervisory convergence and providing opinions to the European Parliament, the Council, and the Commission.

4. The objective of the Authority shall be to contribute to: (i) improving the functioning of the internal market, including in particular a high, effective and consistent level of regulation and supervision, (ii) protecting protect investors, (iii) ensuring the integrity, efficiency and orderly functioning of financial markets, (iv) safeguarding the stability of the financial system, and (v) strengthening international supervisory coordination while taking into account the need to enhance competition and innovation within the internal market and to ensure global competitiveness. For this purpose, the Authority shall contribute to ensuring the consistent, efficient and effective application of the Community law referred to in Article 1(2) above, fostering supervisory convergence and providing opinions to the European Parliament, the Council, and the Commission.

Amendment  12

Proposal for a regulation

Article 6 – paragraph 2 – point b

Text proposed by the Commission

Amendment

(b) issue guidelines and recommendations, as laid down in Article 8;

(b) issue non-binding guidelines and recommendations, as laid down in Article 8;

Amendment  13

Proposal for a regulation

Article 7 – title

Text proposed by the Commission

Amendment

Technical standards

Technical standards – delegated acts

Amendment  14

Proposal for a regulation

Article 7 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

Before submitting them to the Commission, the Authority shall, where appropriate, conduct open public consultations on technical standards and analyse the potential related costs and benefits.

Before submitting them to the Commission, the Authority shall, where appropriate, conduct open public consultations on technical standards, involving financial market participants in the drafting of any rules to be imposed on them, in order to ensure that such rules are proportionate to their objective and are not excessive and to analyse the potential related costs and benefits.

Amendment  15

Proposal for a regulation

Article 7 – paragraph 2

Text proposed by the Commission

Amendment

2. The standards shall be adopted by the Commission by means of Regulations or Decisions and published in the Official Journal of the European Union.

2. The standards shall be adopted by the Commission by means of regulations or decisions as delegated acts in accordance with Article 290 of the Treaty on the Functioning of the European Union.

Amendment  16

Proposal for a regulation

Article 8

Text proposed by the Commission

Amendment

The Authority shall, with a view to establishing consistent, efficient and effective supervisory practices within the ESFS, and to ensuring the common, uniform and consistent application of Community legislation, issue guidelines and recommendations addressed to competent authorities or financial market participants.

The Authority shall, with a view to establishing consistent, efficient and effective supervisory practices with the ESFS, and to ensuring the common, uniform and consistent application of Community legislation, issue guidelines and recommendations addressed to competent authorities or financial market participants. The Authority shall conduct open public consultations on guidelines and recommendations and shall analyse the potential related costs and benefits. The guidelines shall be published on the Authority's website.

The competent authorities shall make every effort to comply with those guidelines and recommendations.

The competent authorities shall make every effort to comply with those guidelines and recommendations.

Where the competent authority does not apply those guidelines or recommendations it shall inform the Authority of its reasons.

Where a competent authority does not apply those guidelines or recommendations it shall inform the Authority of its reasons. The Authority shall publish those reasons, giving the competent authority due notice of its intention to do so.

Amendment  17

Proposal for a regulation

Article 9

Text proposed by the Commission

Amendment

Consistent application of Community rules

Non-application of Union law

1. Where a competent authority has not correctly applied the legislation referred to in Article 1(2), in particular by failing to ensure that a financial market participant satisfies the requirements laid down in that legislation, the Authority shall have the powers set out in paragraphs 2, 3 and 6 of this Article.

1. Where a competent authority has not applied the legislation referred to in Article 1(2), in particular by failing to ensure that a financial market participant satisfies the requirements laid down in that legislation, the Authority shall have the powers set out in paragraphs 2, 3 and 6 of this Article.

2. Upon request from one or more competent authorities, from the Commission or on its own initiative and after having informed the competent authority concerned, the Authority may investigate the alleged incorrect application of Community law.

2. Upon request from one or more competent authorities, from the European Parliament, the Council or the Commission, or on its own initiative and after having informed the competent authority concerned, the Authority may investigate the alleged non-application of Union law.

Without prejudice to the powers laid down in Article 20, the competent authority shall provide the Authority with all information which the Authority considers necessary for its investigation without delay.

Without prejudice to the powers laid down in Article 20, the competent authority shall provide the Authority with all information which the Authority considers necessary for its investigation without delay.

3. The Authority may, at the latest within two months from initiating its investigation, address to the competent authority concerned a recommendation setting out the action necessary to comply with Community law.

3 The Authority may, at the latest within two months from initiating its investigation, address to the competent authority concerned a recommendation setting out the action necessary to comply with Union law.

The competent authority shall, within ten working days of the receipt of the recommendation, inform the Authority of the steps it has taken or intends to take to ensure compliance with Community law.

The competent authority shall, within ten working days of the receipt of the recommendation, inform the Authority of the steps it has taken or intends to take to ensure compliance with Union law.

4. Where the competent authority has not complied with Community law within one month from receipt of the Authority's recommendation, the Commission may, after having been informed by the Authority or on its own initiative, take a decision requiring the competent authority to take the action necessary to comply with Community law.

4. Where the competent authority has not complied with Union law within one month from receipt of the Authority's recommendation, the Commission may, after having been informed by the Authority or on its own initiative, take a decision requiring the competent authority to take the action necessary to comply with Union law.

The Commission shall take such a decision no later than three months from the adoption of the recommendation. The Commission may extend this period by one month.

The Commission shall take such a decision no later than three months from the adoption of the recommendation. The Commission may extend this period by one month.

The Commission shall ensure that the right to be heard of the addressees of the decision is respected.

The Commission shall ensure that the right to be heard of the addressees of the decision is respected.

The Authority and the competent authorities shall provide the Commission with all necessary information.

The Authority and the competent authorities shall provide the Commission with all necessary information.

5. The competent authority shall, within ten working days of receipt of the decision referred to in paragraph 4, inform the Commission and the Authority of the steps it has taken or intends to take to implement the Commission's decision.

5. The competent authority shall, within ten working days of receipt of the decision referred to in paragraph 4, inform the Commission and the Authority of the steps it has taken or intends to take to implement the Commission's decision.

6. Without prejudice to the powers of the Commission under Article 226 of the Treaty, where a competent authority does not comply with the decision referred to in paragraph 4 of this Article within the period of time specified therein, and where it is necessary to remedy in a timely manner the non compliance by the competent authority in order to maintain or restore neutral conditions of competition in the market or ensure the orderly functioning and integrity of the financial system, the Authority may, where the relevant requirements of the legislation referred to in Article 1(2) are directly applicable to financial market participants, adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Community law including the cessation of any practice.

6. Without prejudice to the powers of the Commission under Article 258 of the Treaty on the Functioning of the European Union, where a competent authority does not comply with the decision referred to in paragraph 4 of this Article within the period of time specified therein, and where it is necessary to remedy in a timely manner the non-compliance by the competent authority in order to maintain or restore neutral conditions of competition in the internal market or ensure the orderly functioning and integrity of the financial system in cross-border activities, the Authority may, where the relevant requirements of the legislation referred to in Article 1(2) are directly applicable to financial market participants, adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Union law including the cessation of any practice. Before adopting an individual decision, the Authority shall inform the Commission thereof.

 

The Commission shall ensure that the right to be heard of the addressees of the decision is respected.

 

The Authority and the competent authorities shall provide the Commission with all necessary information.

 

Within two weeks of receipt of the draft decision of the Authority, the Commission shall decide whether to endorse the draft decision. The Commission may not extend that period. The Commission may endorse the draft decision only in part or with amendments where the Union interest so requires.

 

Where the Commission does not endorse the draft decision or endorses it in part or with amendments, it shall inform the Authority without delay in the form of a formal opinion.

 

Within one week of receipt of that formal opinion, the Authority shall review and adapt its decision to the Commission's formal opinion and transmit it without delay to the Commission.

 

Within one week of receipt of the amended decision of the Authority, the Commission shall decide whether to endorse it or reject it.

 

If the amended decision is rejected by the Commission, the decision shall be deemed not to have been adopted

The decision of the Authority shall be in conformity with the decision adopted by the Commission pursuant to paragraph 4.

The decision of the Authority shall be in conformity with the decision adopted by the Commission pursuant to paragraph 4.

7. Decisions adopted under paragraph 6 shall prevail over any previous decision adopted by the competent authorities on the same matter.

 

Any action by the competent authorities in relation to facts which are subject to a decision pursuant to paragraph 4 or 6 shall be compatible with those decisions.

7. Any action by the competent authorities in relation to facts which are subject to a decision pursuant to paragraph 4 or 6 shall be compatible with those decisions.

Amendment  18

Proposal for a regulation

Article 11 – Title

Text proposed by the Commission

Amendment

Settlement of disagreements between competent authorities

Settlement of disagreements between competent authorities in cross-border situations

Amendment  19

Proposal for a regulation

Article 11 – paragraph 1

Text proposed by the Commission

Amendment

1. Without prejudice to the powers laid down in Article 9, where a competent authority disagrees on the procedure or content of an action or inaction by another competent authority in areas where the legislation referred to in Article 1(2) requires cooperation, coordination or joint decision making by competent authorities from more than one Member State, the Authority, at the request of one or more of the competent authorities concerned, may assist the authorities in reaching an agreement in accordance with the procedure set out in paragraph 2.

1. Without prejudice to the powers laid down in Article 9, where a competent authority disagrees on the procedure or content of an action or inaction by another competent authority in areas concerning the legislation referred to in Article 1(2), the Authority, at the request of one or more of the competent authorities concerned, may assist the authorities in reaching an agreement in accordance with the procedure set out in paragraph 2.

Amendment  20

Proposal for a regulation

Article 11 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. In order to be able to perform its facilitating and coordinating role, the Authority shall be fully informed of any relevant developments concerning the situation referred to in paragraph 1, and shall be invited to participate as an observer in any gathering by the relevant national competent supervisory authorities.

Amendment  21

Proposal for a regulation

Article 11 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. Decisions taken under paragraph 3 shall prevail over any previous decision adopted by a competent authority on the same matter. When taking action in relation to issues which are subject to a decision adopted pursuant to paragraph 3, competent authorities shall comply with that decision.

Amendment  22

Proposal for a regulation

Article 11 – paragraph 4

Text proposed by the Commission

Amendment

4. Without prejudice to the powers of the Commission under Article 226 of the Treaty, where a competent authority does not comply with the decision of the Authority, and thereby fails to ensure that a financial market participant complies with requirements directly applicable to it by virtue of the legislation referred to in Article 1(2), the Authority may adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Community law, including the cessation of any practice.

4. Without prejudice to the powers of the Commission under Article 258 of the Treaty on the Functioning of the European Union, where a competent authority does not comply with the decision of the Authority, and thereby fails to ensure that a financial market participant complies with requirements directly applicable to it by virtue of the legislation referred to in Article 1(2), the Authority may adopt an individual decision, in accordance with the procedure laid down in Article 9(6), addressed to a financial market participant requiring the necessary action to comply with its obligations under Union law, including the cessation of any practice.

Amendment  23

Proposal for a regulation

Article 16 – paragraph 2 – point 3

Text proposed by the Commission

Amendment

(3) without prejudice to Article 11, acting as mediator on the request of competent authorities or on its own initiative;

(3) without prejudice to Article 11, carrying out non-binding mediation at the request of competent authorities;

Amendment  24

Proposal for a regulation

Article 18 – paragraph 1

Text proposed by the Commission

Amendment

Without prejudice to the competences of the Community Institutions, the Authority may develop contacts with supervisory authorities from third countries. It may enter into administrative arrangements with international organisations and the administrations of third countries.

Without prejudice to the competences of the EU institutions, the Authority may develop contacts with supervisory authorities from third countries. It may enter into administrative arrangements with international organisations and the administrations of third countries. Such arrangements shall not create legal obligations on the part of the Union and its Member States.

Amendment  25

Proposal for a regulation

Article 20 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

1. At the request of the Authority, competent authorities and other public authorities of the Member States shall provide the Authority with all the necessary information to carry out the duties assigned to it by this Regulation.

1. At the request of the Authority, the competent authorities and other public authorities of the Member States shall provide the Authority with all the necessary information to carry out the duties assigned to it by this Regulation, fully respecting the applicable confidentiality and data protection provisions laid down in the relevant Union law.

Amendment  26

Proposal for a regulation

Article 20 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

The Authority may also request information to be provided at recurring intervals.

The Authority may also request information to be provided at recurring intervals. Any such request shall, where applicable, use a common reporting format.

Amendment  27

Proposal for a regulation

Article 22 – Title

Text proposed by the Commission

Amendment

Securities and Markets Stakeholder Group

Establishment of a Securities and Markets Stakeholder Group

Amendment  28

Proposal for a regulation

Article 22 – paragraph 1

Text proposed by the Commission

Amendment

1. For the purpose of consultation with stakeholders in areas relevant to the tasks of the Authority, a Securities and Markets Stakeholder Group shall be established.

1. The Authority shall establish a Securities and Markets Stakeholder Group for the purpose of consultation with stakeholders in areas relevant to the tasks of the Authority.

Amendment  29

Proposal for a regulation

Article 22 – paragraph 3 – subparagraph 2

Text proposed by the Commission

Amendment

In making its decision, the Board of Supervisors shall, to the extent possible, ensure an appropriate geographical balance and representation of stakeholders across the Community.

In making its decision, the Board of Supervisors shall ensure an appropriate geographical balance and representation of stakeholders across the Community.

Amendment  30

Proposal for a regulation

Article 23 – paragraph 1

Text proposed by the Commission

Amendment

1. The Authority shall ensure that no decision adopted under Articles 10 or 11 impinges in any way on the fiscal responsibilities of Member States.

1. The Authority shall ensure that no decision adopted under Article 10 or 11 impinges directly on the fiscal responsibilities of Member States.

Amendment  31

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. Where a Member State considers that a decision taken under Article 11 impinges on its fiscal responsibilities, it may notify the Authority and the Commission within one month after notification of the Authority's decision to the competent authority that the decision will not be implemented by the competent authority.

2. Where a Member State considers that a decision taken under Article 11 impinges on its fiscal responsibilities, it may notify the Authority, the Council and the Commission within three working days after notification of the Authority's decision to the competent authority.

Amendment  32

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 4

Text proposed by the Commission

Amendment

Within a period of one month from the notification by the Member State, the Authority shall inform the Member State as to whether it maintains its decision or whether it amends or revokes it.

Within a period of one week from the notification by the Member State, the Authority shall inform the Member State as to whether it maintains its decision or whether it amends or revokes it. If the decision is maintained or amended, the Authority shall state that fiscal responsibilities are not affected.

Amendment  33

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 5

Text proposed by the Commission

Amendment

Where the Authority maintains its decision, the Council, acting by qualified majority as defined in Article 205 of the Treaty, shall, within two months, decide whether the Authority's decision is maintained or revoked.

Where the Authority maintains its decision, the Council, acting by qualified majority as defined in Article 238 of the Treaty on the Functioning of the European Union, shall, within one month, decide whether the Authority's decision is maintained or revoked.

PROCEDURE

Title

European Securities and Markets Authority

References

COM(2009)0503 – C7-0167/2009 – 2009/0144(COD)

Committee responsible

ECON

Opinion by

       Date announced in plenary

JURI

7.10.2009

 

 

 

Rapporteur

       Date appointed

Raffaele Baldassarre

5.10.2009

 

 

Discussed in committee

28.1.2010

 

 

 

Date adopted

28.4.2010

 

 

 

Result of final vote

+:

–:

0:

23

0

0

Members present for the final vote

Raffaele Baldassarre, Luigi Berlinguer, Sebastian Valentin Bodu, Françoise Castex, Christian Engström, Lidia Joanna Geringer de Oedenberg, Daniel Hannan, Klaus-Heiner Lehne, Antonio López-Istúriz White, Antonio Masip Hidalgo, Alajos Mészáros, Bernhard Rapkay, Evelyn Regner, Francesco Enrico Speroni, Alexandra Thein, Diana Wallis, Rainer Wieland, Cecilia Wikström, Tadeusz Zwiefka

Substitute(s) present for the final vote

Piotr Borys, Sergio Gaetano Cofferati, Kurt Lechner, Eva Lichtenberger, József Szájer

Substitute(s) under Rule 187(2) present for the final vote

Kay Swinburne

(1)

These are the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA).

(2)

As established by the ECJ in the case of Meroni (Meroni v High Authority, C -9/56 and 10/56, 1958 E.C.R. 133 and 157), an institution may not delegate powers that it does not itself possess. If the Authority is given the power to decide whether a competent national authority has complied with Community law, as it is proposed in Articles 9.6 and 11.3, this would involve conferring on the Authority a power which goes beyond defined executive powers involving decisions in matters where the correct application of the law is in dispute.

(3)

For instance, in some Member States markets are limited to a small number of major players. Therefore, disclosure of any aggregate data would effectively disclose information about individual firms.


OPINION of the Committee on Constitutional Affairs (9.4.2010)

for the Committee on Economic and Monetary Affairs

on the proposal for a regulation of the European Parliament and of the Council establishing a European Securities and Markets Authority

(COM(2009)0503 – C7-0167/2009 – 2009/0144(COD))

Rapporteur: Íñigo Méndez de Vigo

SHORT JUSTIFICATION

The lack of adequate financial regulation at a European level and the weakness of the market supervisory mechanisms were clearly evident during the economic and financial crisis that hit Europe in 2008, the repercussions of which we are still suffering. The Commission has drawn up four proposals – for whose passage through Parliament the Committee on Economic and Monetary Affairs is responsible – based upon the report by the group of experts presided over by Jacques de Larosiere.

In giving its opinion, the Committee on Constitutional Affairs has sought to examine carefully how the new European Supervisory Authority and the European Systemic Risk Board created in these proposals can best fit into the institutional system. It has also focused on the establishment of harmonised technical standards for financial services, in order to ensure that their actions are consistent on the one hand and to guarantee adequate protection for depositors, investors and consumers in the European Union on the other. The relationship with private-sector institutions has been studied with special care in this opinion, as has the relationship between the European Supervisory Authority and national supervisory authorities. Finally, we have stressed the problems connected with supervision of cross-border institutions.

The 2008 financial crisis demands a European response to European problems: thanks to the new powers granted to it under the Lisbon Treaty, Parliament must play a decisive role in all these matters.

AMENDMENTS

The Committee on Constitutional Affairs calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1

Proposal for a regulation

Title

Text proposed by the Commission

Amendment

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a European Securities and Markets Authority

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a European Supervisory Authority (Securities and Markets)

 

(This amendment applies throughout the text.)

Amendment  2

Proposal for a regulation

Recital 1

Text proposed by the Commission

Amendment

(1) The financial crisis in 2007/2008 exposed important shortcomings in financial supervision, both in particular cases and in relation to the financial system as a whole. Nationally-based supervisory models have lagged behind the integrated and interconnected reality of European financial markets, in which many financial firms operate across borders. The crisis exposed shortcomings in the area of cooperation, coordination, consistent application of Community law and trust between national supervisors.

(1) The financial crisis in 2007/2008 exposed important shortcomings in financial supervision, both in particular cases and in relation to the financial system as a whole. Nationally-based supervisory models have lagged behind the integrated and interconnected reality of European financial markets, in which many financial firms operate across borders. The crisis exposed shortcomings in the area of cooperation, coordination, consistent application of Union law and trust between national supervisors.

 

(This amendment applies throughout the text.)

Amendment  3

Proposal for a regulation

Recital 7

Text proposed by the Commission

Amendment

(7) The European System of Financial Supervisors should be a network of national and Community supervisory authorities, leaving day-to-day supervision of financial market participants at the national level, and according a central role in the supervision of cross-border groups to colleges of supervisors. Greater harmonisation and the coherent application of rules for financial market participants and markets across the Community should also be achieved. A European Securities and Markets Authority should be established, along with a European Insurance and Occupational Pensions Authority and a European Banking Authority (the European Supervisory Authorities).

(7) The European System of Financial Supervisors should be a network of national and Union supervisory authorities, leaving day-to-day supervision of financial market participants that do not have a Union dimension to the national level. Colleges of Supervisors should exert supervision over cross-border institutions that do not have a Union dimension. The European Supervisory Authority (Securities and Markets) (the "Authority") should gradually take over supervision of institutions with a Union dimension. Greater harmonisation and the coherent application of rules for financial market participants and markets across the Union should also be achieved. In addition to the Authority, a European Supervisory Authority (Insurance and Occupational Pensions) and a European Supervisory Authority (Banking) as well as a European Supervisory Authority (Joint Committee) (the "Joint Committee") should be established. The European Systemic Risk Board (the "ESRB") should be party to the European System of Financial Supervision.

 

(The changes to the authorities' names should apply throughout the text.)

Amendment  4

Proposal for a regulation

Recital 10 a (new)

Text proposed by the Commission

Amendment

 

(10a) In Case No C-217/04, UK v. European Parliament and Council of the European Union, the Court of Justice held that: “nothing in the wording of Article 95 TEC implies that the addressees of the measures adopted by the Community legislature on the basis of that provision can only be the individual Member States. The legislature may deem it necessary to provide for the establishment of a Community body responsible for contributing to the implementation of a process of harmonization in situations where, in order to facilitate the uniform implementation and application of acts based on that provision, the adoption of non-binding supporting and framework measures seems appropriate1”. Measures adopted under Article 95 of the EC Treaty (now, following the entry into force of the Treaty of Lisbon, Article 114 of the Treaty on the Functioning of the European Union) may take the form of directives or regulations. For instance, the European Network and Information Security Agency was established by means of Regulation (EC) No 460/2004 of the European Parliament and of the Council2 and also the Authority will be established by a regulation.

 

1 Judgment of 2 May 2006, ECR 2006, p. I-3771, at paragraph 44.

 

2 OJ L 77, 13.3.2004, p. 1.

Amendment  5

Proposal for a regulation

Recital 14

Text proposed by the Commission

Amendment

(14) There is a need to introduce an effective instrument to establish harmonised technical standards in financial services to ensure, also through a single rulebook, a level playing field and an adequate protection of investors and consumers across Europe. As a body with highly specialised expertise, it is efficient and appropriate to entrust the Authority, in areas defined by Community law, with the elaboration of draft technical standards, which do not involve policy choices. The Commission should endorse those draft technical standards in accordance with Community law in order to give them binding legal effect. The draft technical standards have to be adopted by the Commission. They would be subject to amendment if, for example, the draft technical standards were incompatible with Community Law, would not respect the principle of proportionality or would run counter to the fundamental principles of the internal market for financial services as reflected in the acquis of Community financial services legislation. To ensure a smooth and expedited adoption process for those standards, the Commission should be subject to a time limit for its decision on the endorsement.

(14) There is a need to introduce an effective instrument to establish harmonised technical standards in financial services to ensure, also through a single rulebook, a level playing field and an adequate protection of investors and consumers across the Union. As a body with highly specialised expertise, it is efficient and appropriate to entrust the Authority, in areas defined by Union law, with the elaboration of draft technical standards, which do not involve policy choices. The Commission should be empowered to adopt delegated acts in accordance with the procedure referred to in Article 290 of the Treaty on the Functioning of the European Union concerning technical standards in financial services.

Amendment  6

Proposal for a regulation

Recital 15

Text proposed by the Commission

Amendment

(15) The process for the development of technical standards in this regulation is without prejudice to the Commission's powers to adopt on its own initiative implementing measures under comitology procedures at level 2 of the Lamfalussy structure as laid out in the relevant Community legislation. The matters concerned by the technical standards do not involve policy decisions, and their content is framed by the Community acts adopted at Level 1. Development of the draft standards by the Authority ensures that they fully benefit from the specialised expertise of national supervisory authorities.

(15) The Commission should endorse those draft technical standards in order to give them binding legal effect. They will be subject to amendment if, for example, they are incompatible with Union law, do not respect the principle of proportionality or run counter to the fundamental principles of the internal market for financial services as reflected in the acquis of Union financial services legislation. To ensure a smooth and expeditious adoption process for those standards, the Commission should be subject to a time limit for its decision on the endorsement.

Amendment  7

Proposal for a regulation

Recital 16

Text proposed by the Commission

Amendment

(16) In areas not covered by technical standards, the Authority should have the power to issue non-binding guidelines and recommendations on the application of Community legislation. In order to ensure transparency and strengthen compliance by national supervisory authorities with those guidelines and recommendations, national authorities should be obliged to state their reasons where they do not comply with those guidelines and recommendations.

(16) In areas not covered by technical standards, the Authority should have the power to issue guidelines and recommendations on the application of Union legislation. In order to ensure transparency and strengthen compliance by national supervisory authorities with those guidelines and recommendations, national authorities should be obliged to state their reasons where they do not comply with those guidelines and recommendations publicly in order to be fully transparent with market participants. In areas not covered by technical standards, the Authority should establish and promulgate best practices.

Amendment  8

Proposal for a regulation

Recital 19

Text proposed by the Commission

Amendment

(19) Where the national authority does not comply with the recommendation, the Commission should be empowered to address a Decision to the national supervisory authority concerned in order to ensure compliance with Community law, creating direct legal effects which can be invoked before national courts and authorities and enforced under Article 226 of the Treaty.

(19) Where the national authority does not comply with the recommendation within a deadline fixed by the Authority, the Authority should address a Decision without delay to the national supervisory authority concerned in order to ensure compliance with Union law, creating direct legal effects which can be invoked before national courts and authorities and enforced under Article 258 of the Treaty.

Amendment  9

Proposal for a regulation

Recital 21

Text proposed by the Commission

Amendment

(21) Serious threats to the orderly functioning and integrity of financial markets or the stability of the financial system in the Community require a swift and concerted response at Community level. The Authority should therefore be able to require national supervisory authorities to take specific actions to remedy an emergency situation. As the determination of an emergency situation involves a significant degree of discretion, this power should be conferred on the Commission. To ensure an effective response to the emergency situation, in the event of inaction by the competent national supervisory authorities, the Authority should be empowered to adopt, as a last resort, decisions directly addressed to financial market participants in areas of Community law directly applicable to them aimed at mitigating the effects of the crisis and restoring confidence in the markets.

(21) Serious threats to the orderly functioning and integrity of financial markets or the stability of the financial system in the Union require a swift and concerted response at Union level. The Authority should therefore be able to require national supervisory authorities to take specific actions to remedy an emergency situation. The ESRB should establish when there is an emergency situation. To ensure an effective response to the emergency situation, in the event of inaction by the competent national supervisory authorities, the Authority should be empowered to adopt, as a last resort, decisions directly addressed to financial market participants in areas of Union law directly applicable to them aimed at mitigating the effects of the crisis and restoring confidence in the markets.

Amendment  10

Proposal for a regulation

Recital 22

Text proposed by the Commission

Amendment

(22) In order to ensure efficient and effective supervision and a balanced consideration of the positions of the competent authorities in different Member States, the Authority should be able to settle disagreements between those competent authorities with binding effect, including within colleges of supervisors. A conciliation phase should be provided for, during which the competent authorities may reach an agreement. The Authority's competence should cover disagreements on procedural obligations in the cooperation process as well as on the interpretation and application of Community law in supervisory decisions. Existing conciliation mechanisms provided for in sectoral legislation have to be respected. In the event of inaction by the national supervisory authorities concerned, the Authority should be empowered to adopt, as a last resort, decisions directly addressed to financial market participants in areas of Community law directly applicable to them.

(22) In order to ensure efficient and effective supervision and a balanced consideration of the positions of the competent authorities in different Member States, the Authority should be able to settle disagreements between those competent authorities with binding effect, including within colleges of supervisors. A conciliation phase should be provided for, during which the competent authorities may reach an agreement. The Authority's competence should cover disagreements on procedural obligations in the cooperation process as well as on the interpretation and application of Union law in supervisory decisions. Existing conciliation mechanisms provided for in sectoral legislation have to be respected. In the event of inaction by the national supervisory authorities concerned, the Authority should be empowered to adopt, as a last resort, decisions directly addressed to financial market participants in areas of Union law directly applicable to them. This also applies to disagreements within a college of supervisors.

Amendment  11

Proposal for a regulation

Recital 22 a (new)

Text proposed by the Commission

Amendment

 

(22a) The crisis has exposed major fault lines in existing approaches to supervision of cross-border financial institutions, particularly the biggest and most complex institutions the bankruptcy of which is capable of producing systemic damages. Those fault lines arise from the different areas of activity of the financial institutions and from the supervisory bodies on the other. The former act in a market without borders, the latter check on a daily basis whether their jurisdictions end at national borders.

Amendment  12

Proposal for a regulation

Recital 22 b (new)

Text proposed by the Commission

Amendment

 

(22b) The cooperation mechanism used to resolve this asymmetry has clearly been shown not to be sufficient. As the Turner Review, published in March 2009, points out, "the current arrangements, combining branch passporting rights, home country supervision, and purely national deposit insurance, are not sound basis for the future regulation and supervision of European cross-border retail banks"1.

 

_____________

1 at p. 101.

Amendment  13

Proposal for a regulation

Recital 22 c (new)

Text proposed by the Commission

Amendment

 

(22c) There are only two possible solutions to resolve this issue: either to give more power to host country supervisors or to create a genuine alternative European authority. As the Turner review also states, "sounder arrangements require either increased national powers, implying a less open single market, or a greater degree of European integration".

Amendment  14

Proposal for a regulation

Recital 22 d (new)

Text proposed by the Commission

Amendment

 

(22d) The national solution implies that the host country could refuse local branches the right to operate, to oblige foreign institutions to act only through the subsidiaries and not through branches and to oversee the capital and liquidity of banks operating in their country, which would amount to more protectionism.

Amendment  15

Proposal for a regulation

Recital 22 e (new)

Text proposed by the Commission

Amendment

 

(22e) The European solution calls for the reinforcement of the colleges of supervisors in the supervision of cross-border institutions and for the progressive shift of supervisory powers over institutions with a Union dimension to a European authority. Financial institutions with a Union dimension include those operating cross-border as well as those operating within national territory provided that their bankruptcy could threaten the stability of the Union's single financial market.

Amendment  16

Proposal for a regulation

Recital 22 f (new)

Text proposed by the Commission

Amendment

 

(22f) Colleges of Supervisors should have the power to define supervisory rules to foster the coherent application of Union law. The Authority should have full participation rights in Colleges of Supervisors with a view to streamlining the functioning of the information-exchange process, to foster convergence and consistency across colleges in the application of Union law. The Authority should act as leader in supervising cross-border financial institutions operating in the Union. The Authority should also have a binding mediation role to solve conflicts between national supervisors.

Amendment  17

Proposal for a regulation

Recital 22 g (new)

Text proposed by the Commission

Amendment

 

(22g) Colleges of supervisors should play an important role in the efficient, effective and consistent supervision of cross-border financial institutions that do not have a Union dimension, but in most cases the differences between national standards and practices subsist. There is no value in converging basic financial regulations if supervisory practices remain fragmented. As the de Larosière Report points out, "competition distortions and regulatory arbitrage stemming from different supervisory practices must be avoided, because they have the potential of undermining financial stability – inter alia by encouraging a shift of financial activity to countries with lax supervision. The supervisory system has to be perceived as fair and balanced".

Amendment  18

Proposal for a regulation

Recital 23 a (new)

Text proposed by the Commission

Amendment

 

(23a) The prudential supervision of financial institutions with a Union dimension should be entrusted to the Authority. National supervisors should act as agents of the Authority and should be bound to the Authority's instructions when they supervise cross-border financial institutions with a Union dimension.

Amendment  19

Proposal for a regulation

Recital 23 b (new)

Text proposed by the Commission

Amendment

 

(23b) The financial institutions with a Union dimension should be identified, taking into account international standards.

Amendment  20

Proposal for a regulation

Recital 24

Text proposed by the Commission

Amendment

(24) The delegation of tasks and responsibilities can be a useful instrument in the functioning of the network of supervisors in order to reduce the duplication of supervisory tasks, foster cooperation and thereby streamline the supervisory process as well as reduce the burden imposed on financial institutions. The Regulation should therefore provide a clear legal basis for such delegation. Delegation of tasks means that tasks are carried out by another supervisory authority instead of the responsible authority, while the responsibility for supervisory decisions remains with the delegating authority. By delegation of responsibilities one national supervisory authority, the delegatee, shall be able to decide upon a certain supervisory matter in its name in lieu of another national supervisory authority. Delegations should be governed by the principle of allocating supervisory competence to a supervisor which is well placed to take action in the subject matter. A reallocation of responsibilities can be appropriate for example for reasons of economies of scale or scope, of coherence in group supervision, and of optimal use of technical expertise among national supervisory authorities. Relevant Community legislation may further specify the principles for reallocation of responsibilities upon agreement. The Authority should facilitate delegation agreements between national supervisory authorities by all appropriate means. It should be informed in advance of intended delegation agreements to be able to express an opinion where appropriate. It should centralise the publication of such agreements to ensure timely, transparent and easily accessible information about agreements for all parties concerned.

(24) The delegation of tasks and responsibilities can be a useful instrument in the functioning of the network of supervisors in order to reduce the duplication of supervisory tasks, foster cooperation and thereby streamline the supervisory process as well as reduce the burden imposed on financial institutions. The Regulation should therefore provide a clear legal basis for such delegation. Delegation of tasks means that tasks are carried out by another supervisory authority instead of the responsible authority, while the responsibility for supervisory decisions remains with the delegating authority. By delegation of responsibilities one national supervisory authority, the delegatee, shall be able to decide upon a certain supervisory matter in its name in lieu of the Authority or in lieu of another national supervisory authority. Delegations should be governed by the principle of allocating supervisory competence to a supervisor which is well placed to take action in the subject matter. A reallocation of responsibilities can be appropriate for example for reasons of economies of scale or scope, of coherence in group supervision, and of optimal use of technical expertise among national supervisory authorities. Relevant Union legislation may further specify the principles for reallocation of responsibilities upon agreement. The Authority should facilitate delegation agreements between national supervisory authorities by all appropriate means. It should be informed in advance of intended delegation agreements to be able to express an opinion where appropriate. It should centralise the publication of such agreements to ensure timely, transparent and easily accessible information about agreements for all parties concerned. It should identify and promulgate best practices regarding delegation and delegation agreements.

Amendment  21

Proposal for a regulation

Recital 26

Text proposed by the Commission

Amendment

(26) Peer reviews are an efficient and effective tool for fostering consistency within the network of financial supervisors. The Authority should therefore develop the methodological framework for such reviews and conduct them on a regular basis. Reviews should focus not only on convergence of supervisory practices but also on the capacity of supervisors to achieve high quality supervisory outcomes as well as the independence of competent authorities.

(26) Peer reviews are an efficient and effective tool for fostering consistency within the network of financial supervisors. The Authority should therefore develop the methodological framework for such reviews and conduct them on a regular basis. Reviews should focus not only on convergence of supervisory practices but also on the capacity of supervisors to achieve high quality supervisory outcomes as well as the independence of competent authorities. The outcome of peer reviews should be made public and best practices should be identified and made public.

Amendment  22

Proposal for a regulation

Recital 29

Text proposed by the Commission

Amendment

(29) Given the globalisation of financial services and the increased importance of international standards, the Authority should foster the dialogue and cooperation with supervisors outside the Community. It shall fully respect the existing roles and competences of the European Institutions in relations with authorities outside the Community and in international forums.

(29) Given the globalisation of financial services and the increased importance of international standards, the Authority should represent the Union in the dialogue and cooperation with supervisors outside the Union.

Amendment  23

Proposal for a regulation

Recital 33

Text proposed by the Commission

Amendment

(33) Where appropriate, the Authority should consult interested parties on technical standards, guidelines and recommendations and provide them with a reasonable opportunity to comment on proposed measures. For reasons of efficiency, a Securities and Markets Stakeholder Group should be established for that purpose, representing in balanced proportions Community financial market participants (including as appropriate institutional investors and other financial institutions which themselves use financial services), their employees, and consumers and other retail users of financial services, including SMEs. The Securities and Markets Stakeholder Group should actively work as an interface with other user groups in the financial services area established by the Commission or Community legislation.

(33) The Authority should consult interested parties on technical standards, guidelines and recommendations and provide them with a reasonable opportunity to comment on proposed measures. Before adopting such draft technical standards, guidelines and recommendations the Authority should carry out an impact assessment. For reasons of efficiency, a Securities and Markets Stakeholder Group should be established for that purpose, representing in balanced proportions Union financial market participants (including as appropriate institutional investors and other financial institutions which themselves use financial services), their employees, academia and consumers and other retail users of financial services, including SMEs. The Securities and Markets Stakeholder Group should actively work as an interface with other user groups in the financial services area established by the Commission or by Union legislation.

Amendment  24

Proposal for a regulation

Recital 34 a (new)

Text proposed by the Commission

Amendment

 

(34a) Without prejudice to the particular responsibilities of the Member States in crisis situations it is evident that where a Member State chooses to invoke the safeguard, the European Parliament should be informed at the same time as the Authority, the Council and the Commission. Furthermore the Member State should explain its reasons for invoking the safeguard. The Authority should, in cooperation with the Commission, set out the next steps to be taken.

Amendment  25

Proposal for a regulation

Recital 38

Text proposed by the Commission

Amendment

(38) A full time Chairperson, selected by the Board of Supervisors through an open competition, should represent the Authority. The management of the Authority should be entrusted to an Executive Director, who should have the right to participate in meetings of the Board of Supervisors and the Management Board without the right to vote.

(38) A full-time Chairperson, selected by the European Parliament following an open competition managed by the Commission and the subsequent drawing-up of a shortlist by the Commission, should represent the Authority. The management of the Authority should be entrusted to an Executive Director, who should have the right to participate in meetings of the Board of Supervisors and the Management Board without the right to vote.

Amendment  26

Proposal for a regulation

Recital 39

Text proposed by the Commission

Amendment

(39) In order to ensure cross-sectoral consistency in the activities of the European Supervisory Authorities, those authorities should coordinate closely in a Joint Committee of European Supervisory Authorities and reach common positions where appropriate. The Joint Committee of European Supervisory Authorities should assume all of the functions of the Joint Committee on Financial Conglomerates. Where relevant, acts also falling within the area of competence of the European Insurance and Occupational Pensions Authority or the European Banking Authority should be adopted in parallel by the European Supervisory Authorities concerned.

(39) In order to ensure cross-sectoral consistency in the activities of the European Supervisory Authorities, those authorities should coordinate closely through the European Supervisory Authorities Joint Committee and reach common positions where appropriate. The Joint Committee should coordinate the functions of the three European Supervisory Authorities in relation to financial conglomerates. Where relevant, acts also falling within the area of competence of the European Supervisory Authority (Banking) or the European Supervisory Authority (European Insurance and Occupational Pensions) should be adopted in parallel by the European Supervisory Authorities concerned. The Joint Committee should be chaired for a 12-month term on a rotating basis by the Chairpersons of the three European Supervisory Authorities. The Chairperson of the Joint Committee should be a Vice-Chair of the ESRB. The Joint Committee should have a permanent secretariat, staffed on secondment from the three European Supervisory Authorities, to allow for informal information-sharing and the development of a common cultural approach across the three European Supervisory Authorities.

Amendment  27

Proposal for a regulation

Article 1 – paragraph 2

Text proposed by the Commission

Amendment

2. The Authority shall act within the scope of Directive 97/9/EC, Directive 98/26/EC, Directive 2001/34/EC, Directive 2002/47/EC, Directive 2002/87/EC, Directive 2003/6/EC, Directive 2003/71/EC, Directive 2004/25/EC, Directive 2004/39/EC, Directive 2004/109/EC, Directive 2005/60/EC, Directive 2009/65/EC, Directive 2002/65/EC, Directive 2006/49/EC (without prejudice to the competence of the European Banking Authority in terms of prudential supervision), Directive … [future AIFM Directive], and Regulation … [future CRA Regulation], including all directives, regulations, and decisions based on these acts, and of any further Community act which confers tasks on the Authority.

2. The Authority shall act within the scope of this Regulation and of Directive 97/9/EC, Directive 98/26/EC, Directive 2001/34/EC, Directive 2002/47/EC, Directive 2002/87/EC, Directive 2003/6/EC, Directive 2003/71/EC, Directive 2004/25/EC, Directive 2004/39/EC, Directive 2004/109/EC, Directive 2005/60/EC, Directive 2009/65/EC, Directive 2002/65/EC, Directive 2006/49/EC (without prejudice to the competence of the European Banking Authority in terms of prudential supervision), Directive … [future AIFM Directive], and Regulation … [future CRA Regulation], including all directives, regulations, and decisions based on these acts, and of any further Union act which confers tasks on the Authority.

Amendment  28

Proposal for a regulation

Article 1 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. The Authority shall also act within the field of the activities covered by the legislation referred to in paragraph 2, including matters relating to shareholder rights, corporate governance, auditing and financial reporting, provided that such actions by the Authority are necessary in order to ensure the effective and consistent application of the legislation referred to in paragraph 2. The Authority shall also take appropriate action in the context of takeover bids, clearing and settlement issues, securitisation, short selling and derivative issues including standardisation.

Amendment  29

Proposal for a regulation

Article 1 – paragraph 5

Text proposed by the Commission

Amendment

5. The Authority shall form part of a European System of Financial Supervisors, hereinafter referred to as 'ESFS', which shall function as a network of supervisors, as further specified in Article 39.

deleted

Amendment  30

Proposal for a regulation

Article 1 – paragraph 6

Text proposed by the Commission

Amendment

6. The European Securities and Markets Authority shall co-operate with the European Systemic Risk Board, hereinafter referred to as 'ESRB' as laid down in Article 21 of this Regulation

deleted

Amendment  31

Proposal for a regulation

Article 1 a (new)

Text proposed by the Commission

Amendment

 

Article 1a

 

The European System of Financial Supervision

 

1. The Authority shall form part of a European System of Financial Supervision (ESFS), the main objective of which is to ensure that the rules applicable to the financial sector are adequately implemented, in order to preserve financial stability and thereby to ensure confidence in the financial system as a whole and sufficient protection for the customers of financial services.

 

2. The ESFS shall comprise the following:

 

(a) the European Systemic Risk Board established by Regulation (EU) No .../... [ESRB];

 

(b) the European Supervisory Authority (Banking) established by Regulation (EU) No .../... [EBA];

 

(c) the European Supervisory Authority (Insurance and Occupational Pensions) established by Regulation (EU) No …/…[EIOPA];

 

(d) the Authority;

 

(e) the European Supervisory Authorities Joint Committee provided for in Article 40;

 

(f) the authorities in the Member States referred to in Article 1(2) of Regulation (EU) No .../... [ESMA], Regulation (EU) No …/2009 [EIOPA] and Regulation (EU) No …/… [EBA];

 

(g) the Commission, for the purposes of carrying out the tasks referred to in Articles 7 and 9.

 

3. The Authority shall cooperate regularly and closely, ensure cross-sectoral consistency of work and arrive at joint positions in the area of supervision of financial conglomerates and on other cross-sectoral issues with the ESRB as well as with the European Supervisory Authority (Insurance and Occupational Pensions) and the European Supervisory Authority (Banking) through the Joint Committee referred to in Article 40.

 

4. In accordance with the principle of sincere cooperation in accordance with Article 4(3) of the Treaty on European Union, the parties to the ESFS shall cooperate with trust and full mutual respect, in particular in ensuring that appropriate and reliable information flows between them.

 

5. Only those supervisory authorities that are party to the ESFS shall be entitled to supervise financial institutions operating in the Union.

Amendment  32

Proposal for a regulation

Article 6 – paragraph 1 – point b

Text proposed by the Commission

Amendment

(b) contribute to a consistent application of Community legislation, in particular by contributing to a common supervisory culture, ensuring consistent, efficient and effective application of the legislation referred to in Article 1(2), preventing regulatory arbitrage, mediating and settling disagreements between competent authorities, promoting a coherent functioning of colleges of supervisors and taking actions in emergency situations;

(b) contribute to a consistent application of standards and legislation, in particular by contributing to a common supervisory culture, ensuring consistent, efficient and effective application of this Regulation and the legislation referred to in Article 1(2), preventing regulatory arbitrage, mediating and settling disagreements between competent authorities, ensuring effective and consistent supervision of financial institutions with a Union dimension and a coherent functioning of colleges of supervisors and taking actions, inter alia, in emergency situations;

Amendment  33

Proposal for a regulation

Article 7 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

1. The Authority may develop technical standards in the areas specifically set out in the legislation referred to in Article 1(2). The Authority shall submit its draft standards to the Commission for endorsement.

1. The Authority may develop technical standards to complete, update and amend elements that are not essential to the legislative acts referred to in Article 1(2). Those technical standards shall not involve strategic decisions and their content shall be limited by the legislative acts on which they are based.

Amendment  34

Proposal for a regulation

Article 7 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

Before submitting them to the Commission, the Authority shall, where appropriate, conduct open public consultations on technical standards and analyse the potential related costs and benefits.

The Authority shall conduct open public consultations on the draft technical standards and analyse the potential related costs and benefits before adopting them. The Authority shall also request an opinion or advice of the Securities and Markets Stakeholder Group.

Amendment  35

Proposal for a regulation

Article 7 – paragraph 1 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

The Authority shall submit the draft technical standards to the Commission for endorsement and shall, simultaneously, forward them to the European Parliament and the Council.

Amendment  36

Proposal for a regulation

Article 7 – paragraph 1 – subparagraph 3

Text proposed by the Commission

Amendment

Within three months of receipt of the draft standards, the Commission shall decide whether to endorse the draft standards. The Commission may extend that period by one month. The Commission may endorse the draft standards only in part or with amendments where the Community interest so requires.

Within three months of receipt of the draft technical standards, the Commission shall decide whether to endorse, reject or amend them. The Commission may extend that period by one month. The Commission shall inform the European Parliament and the Council of its decision, stating the reasons.

Amendment  37

Proposal for a regulation

Article 7 – paragraph 1 – subparagraph 4

Text proposed by the Commission

Amendment

Where the Commission does not endorse the standards or endorses them in part or with amendments, it shall inform the Authority of its reasons.

deleted

Amendment  38

Proposal for a regulation

Article 7 – paragraph 2

Text proposed by the Commission

Amendment

2. The standards shall be adopted by the Commission by means of Regulations or Decisions and published in the Official Journal of the European Union.

2. The Commission shall adopt technical standards in accordance with Articles 7a to 7d, in the form of regulations or decisions.

Amendment  39

Proposal for a regulation

Article 7 a (new)

Text proposed by the Commission

Amendment

 

Article 7a

 

Exercise of the delegation to adopt technical standards

 

1. The powers to adopt technical standards in the form of delegated acts referred to in Article 7 shall be conferred on the Commission for an indeterminate period of time.

 

2. As soon as it adopts a technical standard, the Commission shall notify it simultaneously to the European Parliament and to the Council.

 

3. The power to adopt technical standards is conferred on the Commission subject to the conditions laid down in Articles 7b to 7d.

 

4. In the Chairperson's report referred to in Article 35(2), the Authority shall inform the European Parliament and the Council about the technical standards that have been approved and which national authorities have not complied with them.

Amendment  40

Proposal for a regulation

Article 7 b (new)

Text proposed by the Commission

Amendment

 

Article 7b

 

Revocation of the delegation to adopt technical standards

 

1. The delegation of power to adopt technical standards referred to in Article 7 may be revoked by the European Parliament or by the Council.

 

2. The institution which has commenced an internal procedure for deciding whether to revoke the delegation of power shall endeavour to inform the other institution and the Commission within a reasonable time before the final decision is taken, indicating the technical standard which could be subject to revocation and the possible reasons for a revocation.

 

3. The decision of revocation shall state the reasons for the revocation and shall put an end to the delegation of the powers specified in that decision. It shall take effect immediately or at a later date specified therein. It shall not affect the validity of the technical standards already in force. It shall be published in the Official Journal of the European Union.

Amendment  41

Proposal for a regulation

Article 7 c (new)

Text proposed by the Commission

Amendment

 

Article 7c

 

Objections to technical standards

 

1. The European Parliament or the Council may object to a technical standard within a period of four months from the date of notification. At the initiative of the European Parliament or the Council this period may be extended by two months.

 

2. If on the expiry of that period, neither the European Parliament nor the Council has objected to the technical standard, it shall be published in the Official Journal of the European Union and shall enter into force at the date stated therein.

 

Before the expiry of that period and in exceptional and duly justified cases, the European Parliament and the Council may both inform the Commission that they do not intend to raise objections to a technical standard. In such cases, the technical standard shall be published in the Official journal of the European Union and shall enter into force at the date stated therein.

 

3. If the European Parliament or the Council objects to a technical standard, it shall not enter into force. The institution which objects shall state the reasons for objecting to the technical standard.

Amendment  42

Proposal for a regulation

Article 7 d (new)

Text proposed by the Commission

Amendment

 

Article 7d

 

Non-endorsement or amendment of the draft technical standards

 

1. In the event that the Commission does not endorse, or amends, a draft technical standard , the Commission shall inform the Authority, the European Parliament and the Council, stating its reasons.

 

2. The European Parliament or the Council may convene the responsible Commissioner, together with the Chairman of the Authority, within one month for an ad hoc meeting to present their differences.

Amendment  43

Proposal for a regulation

Article 8 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

The Authority shall conduct open public consultations regarding the guidelines and recommendations and analyse the potentially related costs and benefits. The Authority shall request an opinion or advice from the Securities and Markets Stakeholder Group referred to in Article 22.

Amendment  44

Proposal for a regulation

Article 8 – subparagraph 2

Text proposed by the Commission

Amendment

The competent authorities shall make every effort to comply with those guidelines and recommendations.

Within two months of the issuance of a guideline or recommendation, each competent authority shall decide whether it intends to comply with that guideline or recommendation. In the event that it intends not to, it shall inform the Authority, stating reasons. The Authority shall publish those reasons.

Amendment  45

Proposal for a regulation

Article 8 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

In the report on its activities referred to in Article 32(6), the Authority shall inform the European Parliament, the Council and the Commission of the guidelines and recommendations that it has issued, stating which national authority has not complied with them and outlining how the Authority intends to ensure that they will follow its recommendations and guidelines in the future. The Authority shall state the same information for the main larger financial entities.

Amendment  46

Proposal for a regulation

Article 8 – subparagraph 3

Text proposed by the Commission

Amendment

Where the competent authority does not apply those guidelines or recommendations it shall inform the Authority of its reasons.

deleted

Amendment  47

Proposal for a regulation

Article 9 – paragraph 1

Text proposed by the Commission

Amendment

1. Where a competent authority has not correctly applied the legislation referred to in Article 1(2), in particular by failing to ensure that a financial market participant satisfies the requirements laid down in that legislation, the Authority shall have the powers set out in paragraphs 2, 3 and 6 of this Article.

1. Where a competent authority has not correctly applied the legislation referred to in Article 1(2), including the technical standards established in accordance with Article 7, in particular by failing to ensure that a financial market participant satisfies the requirements laid down in that legislation, the Authority shall have the powers set out in paragraphs 2, 3 and 6 of this Article.

Amendment  48

Proposal for a regulation

Article 9 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. Upon request from one or more competent authorities, from the Commission or on its own initiative and after having informed the competent authority concerned, the Authority may investigate the alleged incorrect application of Community law.

2. Upon request from one or more competent authorities from the European Parliament, the Council, the Commission or the Securities and Markets Stakeholder Group, or on its own initiative and after having informed the competent authority concerned, the Authority may investigate the alleged breach or non-application of Union law.

Amendment  49

Proposal for a regulation

Article 9 – paragraph 4 – subparagraph 1

Text proposed by the Commission

Amendment

4. Where the competent authority has not complied with Community law within one month from receipt of the Authority's recommendation, the Commission may, after having been informed by the Authority or on its own initiative, take a decision requiring the competent authority to take the action necessary to comply with Community law.

4. Where the competent authority has not complied with Union law within 10 working days as provided for in the second subparagraph of paragraph 3, the Authority shall take a decision requiring the competent authority to take the action necessary to comply with Union law.

Amendment  50

Proposal for a regulation

Article 9 – paragraph 4 – subparagraph 2

Text proposed by the Commission

Amendment

The Commission shall take such a decision no later than three months from the adoption of the recommendation. The Commission may extend this period by one month.

The Authority shall take such a decision no later than one month from the adoption of the recommendation.

Amendment  51

Proposal for a regulation

Article 9 – paragraph 4 – subparagraph 3

Text proposed by the Commission

Amendment

The Commission shall ensure that the right to be heard of the addressees of the decision is respected.

The Authority shall ensure that the right to be heard of the addressees of the decision is respected.

Amendment  52

Proposal for a regulation

Article 9 – paragraph 4 – subparagraph 4

Text proposed by the Commission

Amendment

The Authority and the competent authorities shall provide the Commission with all necessary information.

The competent authorities shall provide the Authority with all necessary information.

Amendment  53

Proposal for a regulation

Article 9 – paragraph 5

Text proposed by the Commission

Amendment

5. The competent authority shall, within ten working days of receipt of the decision referred to in paragraph 4, inform the Commission and the Authority of the steps it has taken or intends to take to implement the Commission's decision.

5. The competent authority shall, within ten working days of receipt of the decision referred to in paragraph 4, inform the Commission and the Authority of the steps it has taken or intends to take to implement the Authority's decision.

Amendment  54

Proposal for a regulation

Article 9 – paragraph 6 – subparagraph 1

Text proposed by the Commission

Amendment

6. Without prejudice to the powers of the Commission under Article 226 of the Treaty, where a competent authority does not comply with the decision referred to in paragraph 4 of this Article within the period of time specified therein, and where it is necessary to remedy in a timely manner the non compliance by the competent authority in order to maintain or restore neutral conditions of competition in the market or ensure the orderly functioning and integrity of the financial system, the Authority may, where the relevant requirements of the legislation referred to in Article 1(2) are directly applicable to financial market participants, adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Community law including the cessation of any practice.

6. Without prejudice to the powers of the Commission under Article 258 of the Treaty, where a competent authority does not comply with the decision referred to in paragraph 4 of this Article within the period of time specified therein, and where it is necessary to remedy in a timely manner the non compliance by the competent authority in order to maintain or restore neutral conditions of competition in the market or ensure the orderly functioning and integrity of the financial system, the Authority shall, pursuant to the legislation referred to in Article 1(2), adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Union law including the cessation of any practice.

Amendment  55

Proposal for a regulation

Article 9 – paragraph 6 – subparagraph 2

Text proposed by the Commission

Amendment

The decision of the Authority shall be in conformity with the decision adopted by the Commission pursuant to paragraph 4.

The decision of the Authority shall be in conformity with the decision adopted pursuant to paragraph 4.

Amendment  56

Proposal for a regulation

Article 9 – paragraph 7 a (new)

Text proposed by the Commission

Amendment

 

7a. In the report referred to in Article 32(6), the Authority shall set out which national authorities and financial institutions have not complied with the decisions referred to in paragraphs 4 and 6.

Amendment  57

Proposal for a regulation

Article 10 – paragraph 1

Text proposed by the Commission

Amendment

1. In the case of adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Community, the Commission, upon its own initiative or following a request by the Authority, the Council, or the ESRB, may adopt a decision addressed to the Authority, determining the existence of an emergency situation for the purposes of this regulation.

1. In the case of adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Union, the ESRB, upon its own initiative or following a request by the Authority, the Council, the European Parliament or the Commission, may issue a warning declaring the existence of an emergency situation in order to enable the Authority without further requirements to adopt the individual decisions referred to in paragraph 3.

Amendment  58

Proposal for a regulation

Article 10 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. As soon as it issues a warning, the ESRB shall notify it simultaneously to the European Parliament, the Council, the Commission and the Authority.

Amendment  59

Proposal for a regulation

Article 10 – paragraph 2

Text proposed by the Commission

Amendment

2. Where the Commission has adopted a decision pursuant to paragraph 1, the Authority may adopt individual decisions requiring competent authorities to take the necessary action in accordance with the legislation referred to in Article 1(2) to address any risks that may jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system by ensuring that financial market participants and competent authorities satisfy the requirements laid down in that legislation.

2. Where the existence of an emergency situation is declared pursuant to paragraph 1, the Authority shall adopt individual decisions necessary to ensure that competent authorities take the necessary action in accordance with the legislation referred to in Article 1(2) to address any risks that may jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system by ensuring that financial market participants and competent authorities satisfy the requirements laid down in that legislation.

Amendment  60

Proposal for a regulation

Article 10 – paragraph 3

Text proposed by the Commission

Amendment

3. Without prejudice to the powers of the Commission under Article 226 of the Treaty, where a competent authority does not comply with the decision of the Authority referred to in paragraph 2 within the period laid down therein, the Authority may, where the relevant requirements laid down in the legislation referred to in Article 1(2) are directly applicable to financial market participants, adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under that legislation, including the cessation of any practice.

3. Without prejudice to the powers of the Commission under Article 258 of the Treaty, where a competent authority does not comply with the decision of the Authority referred to in paragraph 2 within the period laid down therein, the Authority shall, pursuant to the relevant requirements laid down in the legislation referred to in Article 1(2), adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under that legislation, including the cessation of any practice.

Amendment  61

Proposal for a regulation

Article 10 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. The ESRB shall review the decision referred to in paragraph 1 on its own initiative or following a request by the Authority, the European Parliament, the Council or the Commission.

Amendment  62

Proposal for a regulation

Article 10 – paragraph 4 b (new)

Text proposed by the Commission

Amendment

 

4b. In the report referred to in Article 32(6), the Authority shall set out the individual decisions addressed to national authorities and financial institutions under paragraphs 3 and 4.

Amendment  63

Proposal for a regulation

Article 11 – paragraph 1

Text proposed by the Commission

Amendment

1. Without prejudice to the powers laid down in Article 9, where a competent authority disagrees on the procedure or content of an action or inaction by another competent authority in areas where the legislation referred to in Article 1(2) requires cooperation, coordination or joint decision making by competent authorities from more than one Member State, the Authority, at the request of one or more of the competent authorities concerned, may assist the authorities in reaching an agreement in accordance with the procedure set out in paragraph 2.

1. Without prejudice to the powers laid down in Article 9, where a competent authority disagrees on the procedure or content of an action or inaction by another competent authority in areas where the legislation referred to in Article 1(2) requires cooperation, coordination or joint decision making by competent authorities from more than one Member State, the Authority, on its own initiative or at the request of one or more of the competent authorities concerned, shall take the lead in assisting the authorities in reaching an agreement in accordance with the procedure set out in paragraphs 2 to 4.

Amendment  64

Proposal for a regulation

Article 11 – paragraph 2

Text proposed by the Commission

Amendment

2. The Authority shall set a time limit for conciliation between the competent authorities taking into account any relevant time periods specified in the legislation referred to in Article 1(2) and the complexity and urgency of the matter.

2. The Authority shall set a time limit for conciliation between the competent authorities taking into account any relevant time periods specified in the legislation referred to in Article 1(2) and the complexity and urgency of the matter. At that stage the Authority shall at act as a mediator.

Amendment  65

Proposal for a regulation

Article 11 – paragraph 3

Text proposed by the Commission

Amendment

3. If, at the end of the conciliation phase, the competent authorities concerned have failed to reach an agreement, the Authority may take a decision requiring them to take specific action or to refrain from action in order to settle the matter, in compliance with Community law.

3. If, at the end of the conciliation phase, the competent authorities concerned have failed to reach an agreement, the Authority shall in accordance with the procedure set out in the second subparagraph of Article 29(1) take a decision to settle the disagreement and to require them to take specific action, in compliance with Union law with binding effects on the competent authorities concerned.

Amendment  66

Proposal for a regulation

Article 11 – paragraph 4

Text proposed by the Commission

Amendment

4. Without prejudice to the powers of the Commission under Article 226 of the Treaty, where a competent authority does not comply with the decision of the Authority, and thereby fails to ensure that a financial market participant complies with requirements directly applicable to it by virtue of the legislation referred to in Article 1(2), the Authority may adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Community law, including the cessation of any practice.

4. Without prejudice to the powers of the Commission under Article 258 of the Treaty, where a competent authority does not comply with the decision of the Authority, and thereby fails to ensure that a financial market participant complies with requirements directly applicable to it by virtue of the legislation referred to in Article 1(2), the Authority shall adopt an individual decision addressed to a financial market participant requiring the necessary action to comply with its obligations under Union law, including the cessation of any practice.

Amendment  67

Proposal for a regulation

Article 11 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. Decisions adopted under paragraph 4 shall prevail over any previous decision adopted by the national supervisory authorities on the same matter.

 

Any action by the national supervisory authorities in relation to facts which are subject to a decision pursuant to paragraph 3 or 4 shall be compatible with those decisions.

Amendment  68

Proposal for a regulation

Article 11 – paragraph 4 b (new)

Text proposed by the Commission

Amendment

 

4b. In the report referred to in Article 32(6), the Authority shall set out the disagreement between competent authorities, the agreements reached and the decision taken to settle such disagreements.

Amendment  69

Proposal for a regulation

Article 11 a (new)

Text proposed by the Commission

Amendment

 

Article 11a

 

Settlement of disagreements between competent authorities across sectors

 

The Joint Committee shall, in accordance with the procedure laid down in Article 11, settle disagreements that may arise between competent authorities acting under Article 42.

Amendment  70

Proposal for a regulation

Article 12 – paragraph 1

Text proposed by the Commission

Amendment

1. The Authority shall contribute to promote the efficient and consistent functioning of colleges of supervisors and foster the coherence of the application of Community legislation across colleges.

1. The Authority shall contribute to promote and monitor the efficient effective and consistent functioning of the colleges of supervisors referred to in Directive 2006/48/EC and foster the coherence of the application of Union law across colleges.

Amendment  71

Proposal for a regulation

Article 12 – paragraph 2

Text proposed by the Commission

Amendment

2. The Authority shall participate as an observer in colleges of supervisors as it deems appropriate. For the purpose of that participation, it shall be considered a 'competent authority' within the meaning of the relevant legislation and, at its request, shall receive all relevant information shared with any member of the college.

2. The Authority shall participate in colleges of supervisors as it deems appropriate. For the purpose of that participation, it shall be considered a 'competent authority' within the meaning of the relevant legislation and, at its request, shall receive all relevant information shared with any member of the college.

Amendment  72

Proposal for a regulation

Article 12 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. The Authority may issue technical standards, guidelines and recommendations adopted under Articles 7 and 8 to harmonise supervisory functioning and best practices adopted by the colleges of supervisors.

Amendment  73

Proposal for a regulation

Article 12 – paragraph 3 b (new)

Text proposed by the Commission

Amendment

 

3b. A legally binding mediation role should allow the new Authorities to solve disputes between national supervisors following the procedure set up on Article 11. Where no agreement can be reached between the supervisors of a cross-border institution, the Authority should be empowered to take supervisory decisions directly applicable to the institution concerned.

Amendment  74

Proposal for a regulation

Article 12 a (new)

Text proposed by the Commission

Amendment

 

Article 12a

 

Supervision of financial institutions with a Union dimension

 

1. National authorities shall exert prudential supervision of financial institutions with a Union dimension by acting as the agent of and following the instructions given by the Authority, in order to guarantee that the same supervisory rules are applied across the European Union.

 

2. The Authority shall submit its draft supervisory rules to the Commission and, simultaneously, to the European Parliament and the Council. The Commission shall endorse the draft supervisory rules following the procedure set out in Article 7 or 8.

 

3. A decision taken by the Board of Supervisors in accordance with the procedure set out in Article 29(1) shall identify the significant financial institutions with a Union dimension. The criteria for identifying such financial institutions shall take into account the criteria established by the Financial Stability Board, the International Monetary Fund and the Bank for International Settlements.

 

4. The Authority, in collaboration with the ESRB, shall develop an information template for significant institutions in order to ensure sound management of their systemic risk.

 

5. To ensure the co-responsibility of financial institutions with a Union dimension, to protect the interests of European depositors and to reduce the cost to taxpayers of a systemic financial crisis, a European Financial Protection Fund (the Fund) shall be established. The Fund shall also play a role in helping the Union's financial institutions overcome difficulties when those are likely to threaten the financial stability of the Union's single financial market. The Fund shall be financed through contributions from those institutions. The contribution of each financial institution shall be calculated in accordance with criteria which reward good management. Those contributions replace those made to national funds of a similar nature.

 

6. Where the accumulated resources from the contributions made by banks are insufficient to solve the crisis, the resources of the Fund may be increased through debt issuance. Member States may, in exceptional circumstances, facilitate the issuance of debt by the Fund through guarantees, and in exchange for a fee reflecting appropriately the risk assumed. Those guarantees shall be shared by Member States in accordance with the criteria laid down in paragraph 7.

 

7. Where, under extreme, exceptional circumstances and in the context of a systemic crisis, there is a failure of one or several institutions, and the resources available are insufficient, the affected Member States will deal with this burden in accordance with the principles established in the current Memorandum of Understanding (MoU), as amended. Burden-sharing arrangements may include one of the following criteria, or a combination thereof: the deposits of the institution; the assets (either in terms of accounting values, market values or risk-weighted values) of the institution; the revenue flows of the institution; or share of payment system flows of the institution.

 

8. Membership of the Fund shall replace membership of existing national deposit guarantee schemes for the Union's financial institutions participating therein. The Fund shall be managed by a Board appointed by the Authority for a period of five years. The members of the Board shall be elected from staff of the national authorities. A Consultative Board comprising the financial institutions participating in the Fund shall be established.

Amendment   75

Proposal for a regulation

Article 13 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. The Authority shall delegate to the authorities in the Member States the tasks and responsibilities of supervising the prudential supervision of financial institutions with a Union dimension as referred to in Article 12a.

Amendment   76

Proposal for a regulation

Article 18 – paragraph -1 a (new)

Text proposed by the Commission

Amendment

 

The Authority shall represent the European Union in all international forums concerning regulation and supervision of the institutions covered by the legislation referred to in Article 1(2). National competent authorities may continue to contribute to such fora as pertain to national issues and issues relevant for their own functions and competences under Union law.

Amendment  77

Proposal for a regulation

Article 18 – paragraph 1

Text proposed by the Commission

Amendment

Without prejudice to the competences of the Community Institutions, the Authority may develop contacts with supervisory authorities from third countries. It may enter into administrative arrangements with international organisations and the administrations of third countries.

Without prejudice to the competences of the Union institutions and Member States, the Authority may develop contacts and enter into administrative arrangements with supervisory authorities, international organisations and the administrations of third countries.

Amendment  78

Proposal for a regulation

Article 21 – paragraph 2

Text proposed by the Commission

Amendment

2. The Authority shall cooperate closely with the ESRB. It shall provide the ESRB with regular and up-to-date information necessary for the achievement of its tasks. Any data necessary for the achievement of its tasks that are not in summary or collective form shall be provided without delay to the ESRB upon a reasoned request, as specified in Article [15] of Regulation (EC) No …./… [ESRB].

2. The Authority shall cooperate closely with the ESRB. It shall provide the ESRB with regular and up-to-date information necessary for the achievement of its tasks. Any data necessary for the achievement of its tasks that are not in summary or collective form shall be provided without delay to the ESRB upon a reasoned request, as specified in Article [15] of Regulation (EC) No …./… [ESRB]. The Authority shall develop an appropriate protocol for the disclosure of confidential information regarding individual financial institutions.

Amendment  79

Proposal for a regulation

Article 23 – paragraph 1

Text proposed by the Commission

Amendment

1. The Authority shall ensure that no decision adopted under Articles 10 or 11 impinges in any way on the fiscal responsibilities of Member States.

1. The Authority shall ensure that no decision adopted under Articles 10 or 11 impinges directly in a significant manner on the fiscal responsibilities of Member States.

Amendment  80

Proposal for a regulation

Article 23 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

In its notification, the Member State shall justify why and clearly demonstrate how the decision impinges on its fiscal responsibilities.

In its notification, the Member State shall justify why and provide an impact assessment on how much the decision impinges on its fiscal responsibilities.

Amendment  81

Proposal for a regulation

Article 33 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. The Chairperson shall be appointed by the Board of Supervisors on the basis of merit, skills, knowledge of financial market participants and markets, and experience relevant to financial supervision and regulation, following an open selection procedure.

2. The Chairperson shall be appointed by the Board of Supervisors on the basis of merit, skills, knowledge of financial market participants and markets, and experience relevant to financial supervision and regulation, following an open selection procedure organised and managed by the Commission.

Amendment  82

Proposal for a regulation

Article 33 – paragraph 2 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

The Commission shall present a shortlist of three candidates to the European Parliament. After conducting hearings, the European Parliament shall select one of those candidates. The candidate so selected shall be appointed by the Board of Supervisors.

Amendment  83

Proposal for a regulation

Article 33 – paragraph 2 – subparagraph 1 b (new)

Text proposed by the Commission

Amendment

 

Where the European Parliament is of the opinion that none of the shortlisted candidates sufficiently fulfils the qualifications set out in the first subparagraph, the open selection procedure will recommence.

Amendment  84

Proposal for a regulation

Article 33 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

Before appointment, the candidate selected by the Board of Supervisors shall be subject to confirmation by the European Parliament.

deleted

Amendment  85

Proposal for a regulation

Article 35 – paragraph 1

Text proposed by the Commission

Amendment

1. The European Parliament may invite the Chairperson or his or her alternate, while fully respecting his or her independence, to make a statement regularly before its competent committee and answer questions put by members of that committee.

1. The Chairperson shall at least quarterly, make a statement before the European Parliament and answer any questions put by its members.

Amendment  86

Proposal for a regulation

Article 35 – paragraph 2

Text proposed by the Commission

Amendment

2. The European Parliament may also call upon the Chairperson to submit a report on the performance of his duties.

2. The Chairperson shall submit a report on the performance of his or her duties to the European Parliament when requested and at least 15 days before making the statement referred to in paragraph 1.

Amendment  87

Proposal for a regulation

Article 36 – paragraph 2

Text proposed by the Commission

Amendment

2. The Executive Director shall be appointed by the Board of Supervisors on the basis of merit, skills, knowledge of financial market participants and markets, and experience relevant to financial supervision and regulation and managerial experience, following an open selection procedure.

2. The Executive Director shall be appointed by the Board of Supervisors on the basis of merit, skills, knowledge of financial market participants and markets, and experience relevant to financial supervision and regulation and managerial experience, following an open selection procedure organised and managed by the Commission and after endorsement by the European Parliament.

Amendment  88

Proposal for a regulation

Article 39

Text proposed by the Commission

Amendment