European Market Infrastructure Regulation

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Article 2 Definitions For the purposes of this Regulation, the following definitions shall apply: (1) CCP means a legal person that interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer; (2) trade repository means a legal person that centrally collects and maintains the records of derivatives; (3) clearing means the process of establishing positions, including the calculation of net obligations, and ensuring that financial instruments, cash, or both, are available to secure the exposures arising from those positions; (4) trading venue means a system operated by an investment firm or a market operator within the meaning of Article 4(1)(1) and 4(1)(13) of Directive 2004/39/EC other than a systematic internaliser within the meaning of Article 4(1)(7) thereof, which brings together buying or selling interests in financial instruments in the system, in a way that results in a contract in accordance with Title II or III of that Directive; (5) derivative or derivative contract means a financial instrument as set out in points (4) to (10) of Section C of Annex I to Directive 2004/39/EC as implemented by Article 38 and 39 of Regulation (EC) No 1287/2006; (6) class of derivatives means a subset of derivatives sharing common and essential characteristics including at least the relationship with the underlying asset, the type of underlying asset, and currency of notional amount. Derivatives belonging to the same class may have different maturities; (7) OTC derivative or OTC derivative contract means a derivative contract the execution of which does not take place on a regulated market within the meaning of Article 4(1)(14) of Directive 2004/39/EC or on a third-country market considered to be equivalent to a regulated market in accordance with Article 2a of this Regulation; (8) financial counterparty means means: (a) an investment firm authorised in accordance with Directive 2004/39/EC, 2014/65/EU of the European Parliament and of the CouncilDirective 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349).; (b) a credit institution authorised in accordance with Directive 2006/48/EC, 2013/36/EU of the European Parliament and of the CouncilDirective 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).; (c) an insurance undertaking authorised in accordance with Directive 73/239/EEC, an assurance undertaking authorised in accordance with Directive 2002/83/EC, a or reinsurance undertaking authorised in accordance with Directive 2005/68/EC, 2009/138/EC of the European Parliament and of the CouncilDirective 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1).; (d) a UCITS and, where relevant, its management company, authorised in accordance with Directive 2009/65/EC, unless that UCITS is set up exclusively for the purpose of serving one or more employee share purchase plans; (e) an institution for occupational retirement provision within the meaning (IORP), as defined in point (1) of Article 6(a) 6 of Directive 2003/41/EC (EU) 2016/2341 of the European Parliament and of the CouncilDirective (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (OJ L 354, 23.12.2016, p. 37).; (f) an alternative investment fund (AIF), as defined in point (a) of Article 4(1) of Directive 2011/61/EU, which is either established in the Union or managed by AIFMs an alternative investment fund manager (AIFM) authorised or registered in accordance with that Directive, unless that AIF is set up exclusively for the purpose of serving one or more employee share purchase plans, or unless that AIF is a securitisation special purpose entity as referred to in point (g) of Article 2(3) of Directive 2011/61/EU; 2011/61/EU, and, where relevant, its AIFM established in the Union; (g) a central securities depository authorised in accordance with Regulation (EU) No 909/2014 of the European Parliament and of the CouncilRegulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (OJ L 257, 28.8.2014, p. 1).; (9) non-financial counterparty means an undertaking established in the Union other than the entities referred to in points (1) and (8); (10) pension scheme arrangement means: (a) institutions for occupational retirement provision within the meaning of Article 6(a) of Directive 2003/41/EC, including … 976 unchanged words … and the executive member or members of the board; (30) covered bond means a bond meeting the requirements of Article 129 of Regulation (EU) No 575/2013; (31) covered bond entity means the covered bond issuer or cover pool of a covered bond.

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Article 4 Clearing obligation 1. Counterparties shall clear all OTC derivative contracts pertaining to a class of OTC derivatives that has been declared subject to the clearing obligation in accordance with Article 5(2), if those contracts fulfil both of the following conditions: (a) they have been concluded in one of the following ways: (i) between two financial counterparties; counterparties that meet the conditions set out in the second subparagraph of Article 4a(1); (ii) between a financial counterparty that meets the conditions set out in the second subparagraph of Article 4a(1) and a non-financial counterparty that meets the conditions referred to set out in the second subparagraph of Article 10(1)(b); 10(1); (iii) between two non-financial counterparties that meet the conditions referred to set out in the second subparagraph of Article 10(1)(b); 10(1); (iv) between between, on the one side, a financial counterparty that meets the conditions set out in the second subparagraph of Article 4a(1) or a non-financial counterparty meeting that meets the conditions referred to set out in the second subparagraph of Article 10(1)(b) and 10(1), and, on the other side, an entity established in a third country that would be subject to the clearing obligation if it were established in the Union; or (v) between two entities established in one or more third countries that would be subject to the clearing obligation if they were established in the Union, provided that the contract has a direct, substantial and foreseeable effect within the Union or where such an obligation is necessary or appropriate to prevent the evasion of any provisions of this Regulation; and (b) they are entered into or novated either: (i) on or after the date from on which the clearing obligation takes effect; or (ii) effect, provided that, on or after notification as referred to in Article 5(1) but before the date from which they are entered into or novated, both counterparties meet the clearing obligation takes effect if the contracts have a remaining maturity higher than the minimum remaining maturity determined by the Commission conditions set out in accordance with Article 5(2)(c). point (a). 2. Without prejudice to risk-mitigation techniques under Article 11, OTC derivative contracts that are intragroup transactions as described in Article 3 shall not be subject to the clearing obligation. The exemption set out in the first subparagraph shall apply only: (a) where … 723 unchanged words … 2018. Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in this paragraph in accordance with Articles 10 to 14 of Regulations (EU) No 1093/2010, (EU) No 1094/2010 or (EU) No 1095/2010.

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Article 4a
Financial counterparties that are subject to the clearing obligation
1. Every 12 months, a financial counterparty taking positions in OTC derivative contracts may calculate its aggregate month-end average position for the previous 12 months in accordance with paragraph 3.
Where a financial counterparty does not calculate its positions, or where the result of that calculation exceeds any of the clearing thresholds specified pursuant to point (b) of Article 10(4), the financial counterparty shall:
(a) immediately notify ESMA and the relevant competent authority thereof, and, where relevant, indicate the period used for the calculation;
(b) establish clearing arrangements within four months after the notification referred to in point (a) of this subparagraph; and
(c) become subject to the clearing obligation referred to in Article 4 for all OTC derivative contracts pertaining to any class of OTC derivatives which is subject to the clearing obligation entered into or novated more than four months following the notification referred to in point (a) of this subparagraph.
2. A financial counterparty that is subject to the clearing obligation referred to in Article 4 on 17 June 2019 or that becomes subject to the clearing obligation in accordance with the second subparagraph of paragraph 1, shall remain subject to that obligation and shall continue clearing until that financial counterparty demonstrates to the relevant competent authority that its aggregate month-end average position for the previous 12 months does not exceed the clearing threshold specified pursuant to point (b) of Article 10(4).
The financial counterparty shall be able to demonstrate to the relevant competent authority that the calculation of the aggregate month-end average position for the previous 12 months does not lead to a systematic underestimation of that position.
3. In calculating the positions referred to in paragraph 1, the financial counterparty shall include all OTC derivative contracts entered into by that financial counterparty or entered into by other entities within the group to which that financial counterparty belongs.
Notwithstanding the first subparagraph, for UCITS and AIFs, the positions referred to in paragraph 1 shall be calculated at the level of the fund.
UCITS management companies which manage more than one UCITSs and AIFMs which manage more than one AIF shall be able to demonstrate to the relevant competent authority that the calculation of positions at the fund level does not lead to:
(a) a systematic underestimation of the positions of any of the funds they manage or the positions of the manager; and
(b) a circumvention of the clearing obligation.
The relevant competent authorities of the financial counterparty and of the other entities within the group shall establish cooperation procedures to ensure the effective calculation of the positions at the group level.

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Article 5 Clearing obligation procedure 1. Where a competent authority authorises a CCP to clear a class of OTC derivatives under Article 14 or 15, it or where a class of OTC derivatives which a CCP intends to start clearing is covered by an existing authorisation granted in accordance with Article 14 or 15, the competent authority shall immediately notify ESMA of that authorisation. In order authorisation or of the class of OTC derivatives which the CCP intends to ensure consistent application of this Article, ESMA shall develop draft regulatory technical standards specifying the details to be included in the notifications referred to in the first subparagraph. ESMA shall submit those draft regulatory technical standards to the Commission by 30 September 2012. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. start clearing. 2. Within six months of receiving notification in accordance with paragraph 1 or accomplishing a procedure for recognition set out in Article 25, ESMA shall, after conducting a public consultation and after consulting the ESRB and, where appropriate, the competent authorities of third countries, develop and submit to the Commission for endorsement draft regulatory technical standards specifying the following: (a) the class of OTC derivatives that should be subject to the clearing obligation referred to in Article 4; (b) the date or dates from which the clearing obligation takes effect, including any phase in and the categories of counterparties to which the obligation applies; and applies. (c) the minimum remaining maturity of the OTC derivative contracts referred to in Article 4(1)(b)(ii). Power is delegated to the Commission to adopt regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation … 520 unchanged words … no longer has a CCP which is authorised or recognised to clear those contracts under this Regulation, it shall cease to be subject to the clearing obligation referred to in Article 4, and paragraph 3 of this Article shall apply.

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Article 6 Public register 1. ESMA shall establish, maintain and keep up to date a public register in order to identify the classes of OTC derivatives subject to the clearing obligation correctly and unequivocally. The public register shall be available on ESMA’s website. 2. The register shall include: (a) the classes of OTC derivatives that are subject to the clearing obligation pursuant to Article 4; (b) the CCPs that are authorised or recognised for the purpose of the clearing obligation; (c) the dates from which the clearing obligation takes effect, including any phased-in implementation; (d) the classes of OTC derivatives identified by ESMA in accordance with Article 5(3); (e) the minimum remaining maturity of the derivative contracts referred to in Article 4(1)(b)(ii); (f) the CCPs that have been notified to ESMA by the competent authority for the purpose of the clearing obligation and the date of notification of each of them. 3. Where a CCP is no longer authorised or recognised in accordance with this Regulation to clear a given specific class of OTC derivatives, ESMA shall immediately remove it that CCP from the public register in relation to that class of OTC derivatives. 4. In order to ensure consistent application of this Article, ESMA may develop draft regulatory technical standards specifying the details to be included in the public register referred to in paragraph 1. ESMA shall submit any such draft regulatory technical standards to the Commission by 30 September 2012. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

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Article 6a
Suspension of clearing obligation
1. ESMA may request that the Commission suspend the clearing obligation referred to in Article 4(1) for specific classes of OTC derivatives or for a specific type of counterparty, where one of the following conditions is met:
(a) the specific classes of OTC derivatives are no longer suitable for central clearing in accordance with the criteria referred to in the first subparagraph of Article 5(4) and in Article 5(5);
(b) a CCP is likely to cease clearing those specific classes of OTC derivatives and no other CCP is able to clear those specific classes of OTC derivatives without interruption;
(c) the suspension of the clearing obligation for those specific classes of OTC derivatives or for a specific type of counterparty is necessary to avoid or address a serious threat to financial stability or to the orderly functioning of financial markets in the Union and that suspension is proportionate to those aims.
For the purposes of point (c) of the first subparagraph, prior to the request referred to in the first subparagraph, ESMA shall consult the ESRB and the competent authorities designated in accordance with Article 22.
The request referred to in the first subparagraph shall be accompanied by evidence that at least one of the conditions set out therein is met.
Where the suspension of the clearing obligation is considered by ESMA to be a material change in the criteria for the trading obligation to take effect referred to in Article 32(5) of Regulation (EU) No 600/2014, the request referred to in the first subparagraph of this paragraph may also include a request to suspend the trading obligation laid down in Article 28(1) and (2) of that Regulation for the same specific classes of OTC derivatives that are subject to the request to suspend the clearing obligation.
2. Under the conditions set out in paragraph 1 of this Article, the competent authorities responsible for the supervision of clearing members and the competent authorities designated in accordance with Article 22 may request that ESMA submit a request for a suspension of the clearing obligation to the Commission. The request by the competent authority shall provide reasons and submit evidence showing that at least one of the conditions set out in the first subparagraph of paragraph 1 of this Article is met.
ESMA shall, within 48 hours of receipt of the request from the competent authority referred to in the first subparagraph of this paragraph, on the basis of the reasons and evidence provided by the competent authority, either request that the Commission suspend the clearing obligation referred to in Article 4(1) or reject the request referred to in the first subparagraph of this paragraph. ESMA shall inform the competent authority concerned of its decision. Where ESMA rejects the request by the competent authority, it shall provide reasons therefor in writing.
3. The requests referred to in paragraphs 1 and 2 shall not be made public.
4. The Commission shall, without undue delay after receipt of the request referred to in paragraph 1, on the basis of the reasons and evidence provided by ESMA, either suspend the clearing obligation for the specific classes of OTC derivatives or for the specific type of counterparty referred to in paragraph 1 by way of an implementing act, or reject the requested suspension. Where the Commission rejects the requested suspension, it shall provide reasons therefor in writing to ESMA. The Commission shall immediately inform the European Parliament and the Council thereof and forward them the reasons provided to ESMA. Such information shall not be made public.
The implementing act referred to in the first subparagraph of this paragraph shall be adopted in accordance with the procedure referred to in Article 86(3).
5. Where requested by ESMA in accordance with the fourth subparagraph of paragraph 1 of this Article, the implementing act suspending the clearing obligation for specific classes of OTC derivatives may also suspend the trading obligation laid down in Article 28(1) and (2) of Regulation (EU) No 600/2014 for the same specific classes of OTC derivatives that are subject to the suspension of the clearing obligation.
6. The suspension of the clearing obligation and, where applicable, the trading obligation shall be communicated to ESMA and shall be published in the Official Journal of the European Union, on the Commission's website and in the public register referred to in Article 6.
7. The suspension of the clearing obligation referred to in paragraph 4 shall be valid for an initial period of no more than three months from the date of application of that suspension.
The suspension of the trading obligation referred to in paragraph 5 shall be valid for the same initial period.
8. Where the grounds for the suspension continue to apply, the Commission may, by way of an implementing act, extend the suspension referred to in paragraph 4 for additional periods of no more than three months, with the total period of the suspension of no more than 12 months. Any extensions of the suspension shall be published in accordance with paragraph 6.
The implementing act referred to in the first subparagraph of this paragraph shall be adopted in accordance with the procedure referred to in Article 86(3).
ESMA shall, in sufficient time before the end of the suspension period referred to in paragraph 7 of this Article or of the extension period referred to in the first subparagraph of this paragraph, issue an opinion to the Commission on whether the grounds for the suspension continue to apply. For the purposes of point (c) of the first subparagraph of paragraph 1 of this Article, ESMA shall consult the ESRB and the competent authorities designated in accordance with Article 22. ESMA shall send a copy of that opinion to the European Parliament and to the Council. That opinion shall not be made public.
The implementing act extending the suspension of the clearing obligation may also extend the period of the suspension of the trading obligation referred to in paragraph 7.
The extension of the suspension of the trading obligation shall be valid for the same period as the extension of the suspension of the clearing obligation.

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Article 9 Reporting obligation 1. Counterparties and CCPs shall ensure that the details of any derivative contract they have concluded and of any modification or termination of the contract are reported in accordance with paragraphs 1a to 1f of this Article to a trade repository registered in accordance with Article 55 or recognised in accordance with Article 77. The details shall be reported no later than the working day following the conclusion, modification or termination of the contract. The reporting obligation shall apply to derivative contracts which: (a) were entered into before 16 August 2012 12 February 2014 and remain outstanding on that date; (b) are were entered into on or after 16 August 2012. A 12 February 2014. Notwithstanding Article 3, the reporting obligation shall not apply to derivative contracts within the same group where at least one of the counterparties is a non-financial counterparty or would be qualified as a CCP which non-financial counterparty if it were established in the Union, provided that: (a) both counterparties are included in the same consolidation on a full basis; (b) both counterparties are subject to appropriate centralised risk evaluation, measurement and control procedures; and (c) the parent undertaking is not a financial counterparty. Counterparties shall notify their competent authorities of their intention to apply the exemption referred to in the third subparagraph. The exemption shall be valid unless the notified competent authorities do not agree upon fulfilment of the conditions referred to in the third subparagraph within three months of the date of notification. 1e. Counterparties and CCPs that are required to report the details of derivative contracts shall ensure that such details are reported correctly and without duplication. 1f. Counterparties and CCPs that are subject to the reporting obligation referred to in paragraph 1 may delegate the that reporting of the details of the derivative contract. Counterparties and CCPs shall ensure that the details of their derivative contracts are reported without duplication. obligation. 2. Counterparties shall keep a record of any derivative contract they have concluded and any modification for at least five years following the termination of the contract. 3. Where a trade repository is not available to record the details of a derivative contract, counterparties and CCPs shall ensure that such details are reported to ESMA. In this case ESMA shall ensure that all the relevant entities referred to in Article 81(3) have access to all the details of derivative contracts they need to fulfil their respective responsibilities and mandates. 4. A counterparty or a CCP that reports the details of a derivative contract to a trade repository or to ESMA, or an entity that reports such details on behalf of a counterparty or a CCP shall not be considered in breach of any restriction on disclosure of information imposed by that contract or by any legislative, regulatory or administrative provision. No liability resulting from that disclosure shall lie with the reporting entity or its directors or employees. 5. In order to ensure consistent application of this Article, ESMA shall develop draft regulatory technical standards specifying the details and type of the reports referred to in paragraphs 1 and 3 for the different classes of derivatives. The reports referred to in paragraphs 1 and 3 shall specify at least: (a) the parties to the derivative contract and, where different, the beneficiary of the rights and obligations arising from it; (b) the main characteristics of the derivative contracts, including their type, underlying maturity, notional value, price, and settlement date. ESMA shall submit those draft regulatory technical standards to the Commission by 30 September 2012. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 6. In order to To ensure uniform conditions of application of paragraphs 1 and 3, ESMA shall shall, in close cooperation with the ESCB, develop draft implementing technical standards specifying: (a) the format data standards and formats for the information to be reported, which shall include at least the following: (i) global legal entity identifiers (LEIs); (ii) international securities identification numbers (ISINs); (iii) unique trade identifiers (UTIs); (b) the methods and arrangements for reporting; (c) the frequency of the reports referred to in paragraphs 1 and 3 for the different classes of derivatives; (b) reports; (d) the date by which derivative contracts are to be reported, including any phase-in for contracts entered reported. In developing those draft implementing technical standards, ESMA shall take into before account international developments and standards agreed upon at Union or global level, and their consistency with the reporting obligation applies. requirements laid down in Article 4 of Regulation (EU) 2015/2365Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 (OJ L 337, 23.12.2015, p. 1). and Article 26 of Regulation (EU) No 600/2014. ESMA shall submit those draft implementing technical standards to the Commission by 30 September 2012. 18 June 2020. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

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Article 10 Non-financial counterparties 1. Where Every 12 months, a non-financial counterparty takes taking positions in OTC derivative contracts and those positions exceed may calculate its aggregate month-end average position for the previous 12 months in accordance with paragraph 3. Where a non-financial counterparty does not calculate its positions, or where the result of that calculation in respect of one or more classes of OTC derivatives exceeds the clearing threshold as thresholds specified under pursuant to point (b) of the first subparagraph of paragraph 3, 4, that non-financial counterparty shall: (a) immediately notify ESMA and the relevant competent authority thereof, and, where relevant, indicate the period used for the calculation; (b) establish clearing arrangements within four months of the notification referred to in paragraph 5 thereof; (b) point (a) of this subparagraph; (c) become subject to the clearing obligation for future contracts referred to in accordance with Article 4 if for the rolling average position over 30 working days OTC derivative contracts entered into or novated more than four months following the notification referred to in point (a) of this subparagraph that pertain to those asset classes in respect of which the result of the calculation exceeds the threshold; and (c) clear all relevant future contracts within four months clearing thresholds or, where the non-financial counterparty has not calculated its position, that pertain to any class of becoming OTC derivatives which is subject to the clearing obligation. 2. A non-financial counterparty that has become is subject to the clearing obligation referred to in Article 4 on 17 June 2019 or that becomes subject to the clearing obligation in accordance with the second subparagraph of paragraph 1(b) 1 of this Article, shall remain subject to that obligation and shall continue clearing until that subsequently non-financial counterparty demonstrates to the relevant competent authority designated in accordance with paragraph 5 that its rolling aggregate month-end average position over 30 working days for the previous 12 months does not exceed the clearing threshold, threshold specified pursuant to point (b) of paragraph 4 of this Article. The non-financial counterparty shall no longer be subject able to demonstrate to the clearing obligation set out in Article 4. relevant competent authority that the calculation of the aggregate month-end average position for the previous 12 months does not lead to a systematic underestimation of the position. 2a. The relevant competent authorities of the non-financial counterparty and of the other entities within the group shall establish cooperation procedures to ensure the effective calculation of the positions at the group level. 3. In calculating the positions referred to in paragraph 1, the non-financial counterparty shall include all the OTC derivative contracts entered into by the non-financial counterparty or by other non-financial entities within the group to which the non-financial counterparty belongs, which are not objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity of the non-financial counterparty or of that group. 4. In order to ensure consistent application of this Article, ESMA shall develop draft regulatory technical standards, after consulting the ESRB and other relevant authorities, specifying: (a) criteria for establishing which OTC derivative contracts are objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity referred to in paragraph 3; and (b) values of the clearing thresholds, which are determined taking into account the systemic relevance of the sum of net positions and exposures per counterparty and per class of OTC derivatives. After conducting an open public consultation, ESMA shall submit those draft regulatory technical standards to the Commission by 30 September 2012. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. After consulting the ESRB and other relevant authorities, ESMA shall periodically review the clearing thresholds referred to in point (b) of the first subparagraph and, where necessary, necessary taking into account, in particular, the interconnectedness of financial counterparties, propose to amend the regulatory technical standards to amend them. in accordance with this paragraph. That periodic review shall be accompanied by a report by ESMA on the subject. 5. Each Member State shall designate an authority responsible for ensuring that the obligation under paragraph 1 is met.

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Article 11 Risk-mitigation techniques for OTC derivative contracts not cleared by a CCP 1. Financial counterparties and non-financial counterparties that enter into an OTC derivative contract not cleared by a CCP, shall ensure, exercising due diligence, that appropriate procedures and arrangements are … 1,386 unchanged words … Articles 10 to 14 of Regulation (EU) No 1095/2010. 15. In order to ensure consistent application of this Article, the ESAs shall develop common draft regulatory technical standards specifying: (a) the risk-management procedures, including the levels and type of collateral and segregation arrangements, required for compliance with arrangements referred to in paragraph 3; (aa) the supervisory procedures to ensure initial and ongoing validation of those risk-management procedures; (b) the procedures for the counterparties and the relevant competent authorities to be followed when applying exemptions under paragraphs 6 to 10; (c) the applicable criteria referred to in paragraphs 5 to 10 including in particular what is to be considered as a practical or legal impediment to the prompt transfer of own funds and repayment of liabilities between the counterparties. The level and type of collateral required with respect to OTC derivative contracts that are concluded by covered bond entities in connection with a covered bond, or by a securitisation special purpose entity in connection with a securitisation within the meaning of this Regulation and meeting the conditions of Article 4(5) of this Regulation and the requirements set out in Article 18, and in Articles 19 to 22 or 23 to 26 of Regulation (EU) 2017/2402 (the Securitisation Regulation) shall be determined taking into account any impediments faced in exchanging collateral with respect to existing collateral arrangements under the covered bond or securitisation. The ESAs shall submit those draft regulatory technical standards standards, except for those referred to in point (aa) of the first subparagraph, to the Commission by 18 July 2018. EBA, in cooperation with ESMA and EIOPA, shall submit the draft regulatory technical standards referred to in point (aa) of the first subparagraph to the Commission by 18 June 2020. Depending on the legal nature of the counterparty, power is delegated to the Commission to adopt the regulatory technical standards referred to in this paragraph in accordance with Articles 10 to 14 of Regulations (EU) No 1093/2010, (EU) No 1094/2010 or (EU) No 1095/2010.

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Article 56 Application for registration 1. A For the purposes of Article 55(1), a trade repository shall submit either of the following to ESMA: (a) an application for registration; (b) an application for an extension of the registration to ESMA. where the trade repository is already registered under Chapter III of Regulation (EU) 2015/2365. 2. ESMA shall assess whether the application is complete within 20 working days of receipt of the application. Where the application is not complete, ESMA shall set a deadline by which the trade repository is to provide additional information. After assessing an application as complete, ESMA shall notify the trade repository accordingly. 3. In order to To ensure the consistent application of this Article, ESMA shall develop draft regulatory technical standards specifying the following: (a) the details of the application for the registration referred to in point (a) of paragraph 1; (b) the details of the simplified application for the extension of the registration referred to in point (b) of paragraph 1. ESMA shall submit those draft regulatory technical standards to the Commission by 30 September 2012. 18 June 2020. Power is delegated to the Commission to adopt supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 4. In order to To ensure uniform conditions of application of paragraph 1, ESMA shall develop draft implementing technical standards specifying the following: (a) the format of the application for registration referred to ESMA. in point (a) of paragraph 1; (b) the format of the application for an extension of the registration referred to in point (b) of paragraph 1. With regard to point (b) of the first subparagraph, ESMA shall develop a simplified format. ESMA shall submit those draft implementing technical standards to the Commission by 30 September 2012. 18 June 2020. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

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Article 62 General investigations 1. In order to carry out its duties under this Regulation, ESMA may conduct necessary investigations of persons referred to in Article 61(1). To that end, the officials and other persons authorised by ESMA shall be empowered to: (a) … 346 unchanged words … those authorised persons in carrying out their duties. Officials of the competent authority concerned may also attend the investigations upon request. 5. If a request for records of telephone or data traffic referred to in point (e) of paragraph 1 requires authorisation from a national competent authority to be authorised by a judicial authority according to in accordance with national rules, ESMA shall also apply for such authorisation. ESMA may also apply for such authorisation shall be applied for. Such authorisation may also be applied for as a precautionary measure. 6. Where authorisation as referred to in paragraph 5 is applied for, the national judicial authority shall control that the decision of ESMA is authentic and that the coercive measures envisaged are neither arbitrary nor excessive having regard to the subject matter of the investigations. In its control of the proportionality of the coercive measures, the national judicial authority may ask ESMA for detailed explanations, in particular relating to the grounds ESMA has for suspecting that an infringement of this Regulation has taken place and the seriousness of the suspected infringement and the nature of the involvement of the person subject to the coercive measures. However, the national judicial authority shall not review the necessity for the investigation or demand that it be provided with the information on ESMA’s file. The lawfulness of ESMA’s decision shall be subject to review only by the Court of Justice following the procedure set out in Regulation (EU) No 1095/2010.

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Article 63 On-site inspections 1. In order to carry out its duties under this Regulation, ESMA may conduct all necessary on-site inspections at on any business premises premises, land or land property of the legal persons referred to in Article 61(1). Where the proper conduct and efficiency of the inspection so require, ESMA may carry out conduct the on-site inspection without prior announcement. 2. The officials and other persons authorised by ESMA to conduct an on-site inspection may enter any business premises premises, land or land property of the legal persons who are subject to an investigation decision adopted by ESMA and shall have all the powers stipulated referred to in Article 62(1). They shall also have the power to seal any business premises and books or records for the period of, and to the extent necessary for, the inspection. 3. The officials and other persons authorised by ESMA to conduct … 323 unchanged words … appropriate, the assistance of the police or of an equivalent enforcement authority, so as to enable them to conduct their on-site inspection. 8. If the on-site inspection provided for in paragraph 1 or the assistance provided for in paragraph 7 requires authorisation a national competent authority to be authorised by a judicial authority according to in accordance with national law, rules, ESMA shall also apply for such authorisation. ESMA may also apply for such authorisation shall be applied for. Such authorisation may also be applied for as a precautionary measure. 9. Where authorisation as referred to in paragraph 8 is applied for, the national judicial authority shall verify that ESMA’s decision is authentic and that the coercive measures envisaged are neither arbitrary nor excessive having regard to the subject matter of the inspection. In its control of the proportionality of the coercive measures, the national judicial authority may ask ESMA for detailed explanations. Such a request for detailed explanations may in particular relate to the grounds ESMA has for suspecting that an infringement of this Regulation has taken place, as well as to the seriousness of the suspected infringement and the nature of the involvement of the person who is subjected to the coercive measures. However, the national judicial authority may not review the necessity for the inspection or demand to be provided with the information on ESMA’s file. The lawfulness of ESMA’s decision shall be subject to review only by the Court of Justice following the procedure set out in Regulation (EU) No 1095/2010.

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Article 64 Procedural rules for taking supervisory measures and imposing fines 1. Where, in carrying out its duties under this Regulation, ESMA finds that there are serious indications of the possible existence of facts liable to constitute one or more of the infringements listed in Annex I, ESMA shall appoint an independent investigation officer within ESMA to investigate the matter. The appointed officer shall not be involved or have been directly or indirectly involved in the supervision or the registration process of the trade repository concerned and shall perform his functions independently from ESMA. 2. The investigation officer shall investigate the alleged infringements, taking into account any comments submitted by the persons who are subject to the investigations, and shall submit a complete file with his findings to ESMA. In order to carry out his tasks, the investigation officer may exercise the power to request information in accordance with Article 61 and to conduct investigations and on-site inspections in accordance with Articles 62 and 63. When using those powers, the investigation officer shall comply with Article 60. Where carrying out his tasks, the investigation officer shall have access to all documents and information gathered by ESMA in its supervisory activities. 3. Upon completion of his investigation and before submitting the file with his findings to ESMA, the investigation officer shall give the persons subject to the investigations the opportunity to be heard on the matters being investigated. The investigation officer shall base his findings only on facts on which the persons concerned have had the opportunity to comment. The rights of the defence of the persons concerned shall be fully respected during investigations under this Article. 4. When submitting the file with his the findings referred to in paragraph 3 to ESMA, the investigation officer shall notify that fact to the persons who are subject to the investigations. The Such persons subject to the investigations shall be entitled to have access to the file, subject to the legitimate interest of other persons in the protection of their business secrets. The right of access to the file shall not extend to confidential information affecting third parties. or to ESMA's internal preparatory documents. 5. On the basis of the file containing the investigation officer’s findings and, when requested by the persons concerned, after having heard the persons subject to the investigations in accordance with Article 67, ESMA shall decide if one or more of the infringements listed in Annex I has been committed by the persons who have been subject to the investigations and, in such a case, shall take a supervisory measure in accordance with Article 73 and impose a fine in accordance with Article 65. 6. The investigation officer shall not participate in ESMA’s deliberations or in any other way intervene in ESMA’s decision-making process. 7. The Commission shall adopt further rules of procedure for the exercise of the power to impose fines or periodic penalty payments, including provisions on the rights of the defence, temporal provisions, and the collection of fines or periodic penalty payments, and shall adopt detailed rules on the limitation periods for the imposition and enforcement of penalties. The rules referred to in the first subparagraph shall be adopted by means of delegated acts in accordance with Article 82. 8. ESMA shall refer matters for criminal prosecution to the relevant national authorities for investigation and possible criminal prosecution where, in carrying out its duties under this Regulation, it finds that there are serious indications of the possible existence of facts that it knows to be liable to constitute a criminal offences. offence under the applicable law. In addition, ESMA shall refrain from imposing fines or periodic penalty payments where it is aware that a prior acquittal or conviction arising from identical fact or facts which are substantially the same has already acquired the force of res judicata as the result of criminal proceedings under national law.

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Article 65 Fines 1. Where, in accordance with Article 64(5), ESMA finds that a trade repository has, intentionally or negligently, committed one of the infringements listed in Annex I, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article. An infringement by a trade repository shall be considered to have been committed intentionally if ESMA finds objective factors which demonstrate that the trade repository or its senior management acted deliberately to commit the infringement. 2. The basic amounts of the fines referred to in paragraph 1 shall be included within the following limits: (a) for the infringements referred to in point (c) of Section I of Annex I and in points (c) to (g) of Section II of Annex I, and in points (a) and (b) of Section III of Annex I the amounts of the fines shall be at least EUR 10000 and shall not exceed EUR 20000; 200000; (b) for the infringements referred to in points (a), (b) and (d) to (h) (k) of Section I of Annex I, and in points (a), (b) and (h) of Section II of Annex I, the amounts of the fines shall be at least EUR 5000 and shall not exceed EUR 100000; (c) for the infringements referred to in Section IV of Annex I, the amounts of the fines shall be at least EUR 5000 and shall not exceed EUR 10000. In order to decide whether the basic amount of the fines should be at the lower, the middle or the higher end of the limits set out in the first subparagraph, ESMA shall have regard to the annual turnover of the preceding business year of the trade repository concerned. The basic amount shall be at the lower end of the limit for trade repositories whose annual turnover is below EUR 1 million, the middle of the limit for the trade repository whose turnover is between EUR 1 and 5 million and the higher end of the limit for the trade repository whose annual turnover is higher than EUR 5 million. 3. The basic amounts set out in paragraph 2 shall be adjusted, if need be, by taking into account aggravating or mitigating factors in accordance with the relevant coefficients set out in Annex II. The relevant aggravating coefficients shall be applied one by one to the basic amount. If more than one aggravating coefficient is applicable, the difference between the basic amount and the amount resulting from the application of each individual aggravating coefficient shall be added to the basic amount. The relevant mitigating coefficients shall be applied one by one to the basic amount. If more than one mitigating coefficient is applicable, the difference between the basic amount and the amount resulting from the application of each individual mitigating coefficient shall be subtracted from the basic amount. 4. Notwithstanding paragraphs 2 and 3, the amount of the fine shall not exceed 20 % of the annual turnover of the trade repository concerned in the preceding business year but, where the trade repository has directly or indirectly benefited financially from the infringement, the amount of the fine shall be at least equal to that benefit. Where an act or omission of a trade repository constitutes more than one infringement listed in Annex I, only the higher fine calculated in accordance with paragraphs 2 and 3 and relating to one of those infringements shall apply.

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Article 67 Hearing of the persons concerned 1. Before taking any decision under Article 73(1) and on a fine or periodic penalty payment under Articles 65 and Article 66, ESMA shall give the persons who are subject to the proceedings the opportunity to be heard on its findings. ESMA shall base its decisions only on findings on which the persons who are subject to the proceedings have had an opportunity to comment. The first subparagraph of this paragraph shall not apply to the decisions referred to in points (a), (c) and (d) of Article 73(1) if urgent action is needed in order to prevent significant and imminent damage to the financial system or to prevent significant and imminent damage to the integrity, transparency, efficiency and orderly functioning of financial markets, including to the stability or the correctness of data reported to a trade repository. In such a case, ESMA may adopt an interim decision and shall give the persons concerned the opportunity to be heard as soon as possible after taking its decision. 2. The rights of the defence of the persons subject to the proceedings shall be fully respected in the proceedings. They shall be entitled to have access to ESMA’s file, subject to the legitimate interest of other persons in the protection of their business secrets. The right of access to the file shall not extend to confidential information or ESMA’s internal preparatory documents.

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Article 72 Supervisory fees 1. ESMA shall charge fees to the trade repositories in accordance with this Regulation and in accordance with the delegated acts adopted pursuant to paragraph 3. Those fees shall fully cover ESMA’s necessary expenditure relating to the registration and supervision of trade repositories and the reimbursement of any costs that the competent authorities may incur carrying out work pursuant to this Regulation in particular as a result of any delegation of tasks in accordance with Article 74. 2. The amount of a any fee charged to a trade repository shall cover all reasonable administrative costs incurred by ESMA for in relation to its registration and supervision ESMA's supervisory activities and shall be proportionate to the turnover of the trade repository concerned. concerned and the type of registration and supervision exercised by ESMA. 3. The Commission shall adopt a delegated act in accordance with Article 82 to specify further the type of fees, the matters for which fees are due, the amount of the fees and the manner in which they are to be paid.

inserted text (02012R0648-20190617)

Article 76a
Mutual direct access to data
1. Where necessary for the exercise of their duties, relevant authorities of third countries in which one or more trade repositories are established shall have direct access to information in trade repositories established in the Union, provided that the Commission has adopted an implementing act in accordance with paragraph 2 to that effect.
2. Upon the submission of a request by the authorities referred to in paragraph 1 of this Article, the Commission may adopt implementing acts, in accordance with the examination procedure referred to in Article 86(2), determining whether the legal framework of the third country of the requesting authority fulfils all of the following conditions:
(a) trade repositories established in that third country are duly authorised;
(b) effective supervision and enforcement of trade repositories takes place in that third country on an ongoing basis;
(c) guarantees of professional secrecy exist, including the protection of business secrets shared with third parties by the authorities, and they are at least equivalent to those set out in this Regulation;
(d) trade repositories authorised in that third country are subject to a legally binding and enforceable obligation to grant the entities referred to in Article 81(3) direct and immediate access to the data.

No text on either side: this unit was named by a signal that carries no text, and only the structural diff carries any.

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Article 80 Safeguarding and recording 1. A trade repository shall ensure the confidentiality, integrity and protection of the information received under Article 9. 2. A trade repository may only use the data it receives under this Regulation for commercial purposes if the relevant counterparties have provided their consent. 3. A trade repository shall promptly record the information received under Article 9 and shall maintain it for at least 10 years following the termination of the relevant contracts. It shall employ timely and efficient record keeping procedures to document changes to recorded information. 4. A trade repository shall calculate the positions by class of derivatives and by reporting entity based on the details of the derivative contracts reported in accordance with Article 9. 5. A trade repository shall allow the parties to a contract to access and correct the information on that contract in a timely manner. 5a. Upon request, a trade repository shall provide counterparties that are not required to report the details of their OTC derivative contracts pursuant to Article 9(1a) to (1d) and counterparties and CCPs which have delegated their reporting obligation pursuant to Article 9(1f) with access to the information reported on their behalf. 6. A trade repository shall take all reasonable steps to prevent any misuse of the information maintained in its systems. A natural person who has a close link with a trade repository or a legal person that has a parent undertaking or a subsidiary relationship with the trade repository shall not use confidential information recorded in a trade repository for commercial purposes.

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Article 81 Transparency and data availability 1. A trade repository shall regularly, and in an easily accessible way, publish aggregate positions by class of derivatives on the contracts reported to it. 2. A trade repository shall collect and maintain data and shall ensure … 396 unchanged words … the meaning of Regulations (EU) No 1024/2013 and (EU) No 909/2014 and of Directives 2003/41/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU and, 2014/65/EU, and supervisory authorities within the meaning of Directive 2009/138/EC; (p) the competent authorities designated in accordance with Article 10(5) of this Regulation. Regulation; (q) the relevant authorities of a third country in respect of which an implementing act pursuant to Article 76a has been adopted. A trade repository shall transmit data to competent authorities in accordance with the requirements under Article 26 of Regulation (EU) No 600/2014Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, p. 84).. 4. ESMA shall share the information necessary for the exercise of their duties with other relevant Union authorities. 5. In order to ensure the consistent application of this Article, ESMA shall, after consulting the members of the ESCB, develop draft regulatory technical standards specifying the following: (a) the information to be published or made available in accordance with paragraphs 1 and 3; (b) the frequency and the details of publication of the information referred to in paragraphs 1 and 3 as well as paragraph 1; (c) the operational standards required in order to aggregate and compare data across trade repositories and for the entities referred to in paragraph 3 to have access that information; (d) the terms and conditions, the arrangements and the required documentation under which trade repositories grant access to information as necessary. Those draft regulatory technical standards shall aim the entities referred to ensure that the information published under in paragraph 1 is not capable of identifying a party to any contract. 3. ESMA shall submit those draft regulatory technical standards to the Commission by 30 September 2012. 18 June 2020. In developing those draft regulatory technical standards, ESMA shall ensure that the publication of the information referred to paragraph 1 does not reveal the identity of any party to any contract. Power is delegated to the Commission to adopt supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

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Article 82 Exercise of the delegation 1. The power to adopt delegated acts is conferred to the Commission subject to the conditions laid down in this Article. 2. The delegation of power referred to in Article Articles 1(6), Article 4(3a), 64(7), Article 70, Article 72(3) Articles 72(3), and Article 85(2) shall be conferred to the Commission for an indeterminate period of time. 3. Before adopting a delegated act, the Commission shall endeavour to consult ESMA. 4. A The delegation of power referred to in Article Articles 1(6), Article 4(3a), 64(7), Article 70, Article Articles 72(3) and Article 85(2) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. The decision to revoke It shall take effect on the day following that the publication of its publication the decision in the Official Journal of the European Union or on at a later date specified therein. It shall not affect the validity of any delegated acts already in force. 4. Before adopting a delegated act, the Commission shall endeavour to consult ESMA and shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. 5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council. 6. A delegated act adopted pursuant to Article Articles 1(6), Article 4(3a), 64(7), Article 70, Article Articles 72(3) and Article 85(2) shall enter into force only if no objection has been expressed either by either the European Parliament or the Council within a period of three months of notification of the that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament or and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or of the Council.

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before (02012R0648-20190101)

Article 85
Reports and review
1. By 17 August 2015, the Commission shall review and prepare a general report on this Regulation. The Commission shall submit the report to the European Parliament and the Council, together with any appropriate proposals.
The Commission shall in particular:
(a) assess, in cooperation with the members of the ESCB, the need for any measure to facilitate the access of CCPs to central bank liquidity facilities;
(b) assess, in coordination with ESMA and the relevant sectoral authorities, the systemic importance of the transactions of non-financial firms in OTC derivatives and, in particular, the impact of this Regulation on the use of OTC derivatives by non-financial firms;
(c) assess, in the light of experience, the functioning of the supervisory framework for CCPs, including the effectiveness of supervisory colleges, the respective voting modalities laid down in Article 19(3), and the role of ESMA, in particular during the authorisation process for CCPs;
(d) assess, in cooperation with ESMA and ESRB, the efficiency of margining requirements to limit procyclicality and the need to define additional intervention capacity in this area;
(e) assess in cooperation with ESMA the evolution of CCP’s policies on collateral margining and securing requirements and their adaptation to the specific activities and risk profiles of their users.
The assessment referred to in point (a) of the first subparagraph shall take into account any result of ongoing work between central banks at Union and international level. The assessment shall also take into account the principle of independence of central banks and their right to provide access to liquidity facilities at their own discretion as well as the potential unintended effect on the behaviour of the CCPs or the internal market. Any accompanying proposals shall not, either directly or indirectly, discriminate against any Member State or group of Member States as a venue for clearing services.
2. By 17 August 2014, the Commission shall prepare a report, after consulting ESMA and EIOPA, assessing the progress and effort made by CCPs in developing technical solutions for the transfer by pension scheme arrangements of non-cash collateral as variation margins, as well as the need for any measures to facilitate such solution. If the Commission considers that the necessary effort to develop appropriate technical solutions has not been made and that the adverse effect of centrally clearing derivative contracts on the retirement benefits of future pensioners remain unchanged, it shall be empowered to adopt delegated acts in accordance with Article 82 to extend the three-year period referred to in Article 89(1) once by two years and once by one year.
3. ESMA shall submit to the Commission reports:
(a) on the application of the clearing obligation under Title II and in particular the absence of clearing obligation for OTC derivative contracts entered into before the date of entry into force of this Regulation;
(b) on the application of the identification procedure under Article 5(3);
(c) on the application of the segregation requirements laid down in Article 39;
(d) on the extension of the scope of interoperability arrangements under Title V to transactions in classes of financial instruments other than transferable securities and money-market instruments;
(e) on the access of CCPs to trading venues, the effects on competitiveness of certain practices, and the impact on liquidity fragmentation;
(f) on ESMA’s staffing and resources needs arising from the assumption of its powers and duties in accordance with this Regulation;
(g) on the impact of the application of additional requirements by Member States pursuant to Article 14(5).
Those reports shall be communicated to the Commission by 30 September 2014 for the purposes of paragraph 1. They shall also be submitted to the European Parliament and the Council.
4. The Commission shall, in cooperation with the Member States and ESMA, and after requesting the assessment of the ESRB, draw up an annual report assessing any possible systemic risk and cost implications of interoperability arrangements.
The report shall focus at least on the number and complexity of such arrangements, and the adequacy of risk-management systems and models. The Commission shall submit the report to the European Parliament and the Council, together with any appropriate proposals.
The ESRB shall provide the Commission with its assessment of any possible systemic risk implications of interoperability arrangements.
5. ESMA shall present an annual report to the European Parliament, the Council and the Commission on the penalties imposed by competent authorities, including supervisory measures, fines and periodic penalty payments.

after (02012R0648-20190617)

Article 85
Reports and review
1. By 18 June 2024 the Commission shall assess the application of this Regulation and prepare a general report. The Commission shall submit that report to the European Parliament and to the Council, together with any appropriate proposals.
1a. By 17 June 2023 ESMA shall submit a report to the Commission on the following:
(a) the impact of Regulation (EU) 2019/834 of the European Parliament and of the CouncilRegulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories (OJ L 141, 28.5.2019, p. 42). on the level of clearing by financial and non-financial counterparties and on the distribution of clearing within each type of counterparty, in particular with regard to financial counterparties that have a limited volume of activity in OTC derivatives and with regard to the appropriateness of the clearing thresholds referred to in Article 10(4);
(b) the impact of Regulation (EU) 2019/834 on the quality and accessibility of the data reported to trade repositories, as well as the quality of the information made available by trade repositories;
(c) the changes to the reporting framework, including the take-up and implementation of delegated reporting as laid down in Article 9(1a) and in particular its impact on the reporting burden for non-financial counterparties that are not subject to the clearing obligation;
(d) the accessibility of clearing services, in particular whether the requirement to provide clearing services, directly or indirectly, under fair, reasonable, non-discriminatory and transparent commercial terms referred to in Article 4(3a) has been effective in facilitating access to clearing.
2. By 18 June 2020, and every 12 months thereafter until the final extension referred to in the third subparagraph, the Commission shall prepare a report assessing whether viable technical solutions have been developed for the transfer by pension scheme arrangements of cash and non-cash collateral as variation margins and the need for any measures to facilitate those viable technical solutions.
ESMA shall, by 18 December 2019, and every 12 months thereafter until the final extension referred to in the third subparagraph, in cooperation with EIOPA, EBA and the ESRB, submit a report to the Commission, assessing the following:
(a) whether CCPs, clearing members and pension scheme arrangements have undertaken an appropriate effort and have developed viable technical solutions facilitating the participation of such arrangements in central clearing by posting cash and non-cash collateral as variation margins, including the implications of those solutions on market liquidity and procyclicality and their potential legal or other implications;
(b) the volume and the nature of the activity of pension scheme arrangements in cleared and non-cleared OTC derivatives markets, within each asset class, and any related systemic risk to the financial system;
(c) the consequences of pension scheme arrangements fulfilling the clearing requirement on their investment strategies, including any shift in their cash and non-cash asset allocation;
(d) the implications of the clearing thresholds specified pursuant to point (b) of Article 10(4) for pension scheme arrangements;
(e) the impact of other legal requirements on the cost differentials between cleared and non-cleared OTC derivative contracts, including margin requirements for non-cleared derivatives and the calculation of the leverage ratio in accordance with Regulation (EU) No 575/2013;
(f) whether any further measures are necessary to facilitate a clearing solution for pension scheme arrangements.
The Commission may adopt a delegated act in accordance with Article 82 to extend the two-year period referred to in Article 89(1) twice, each time by one year, where it concludes that no viable technical solution has been developed and that the adverse effect of centrally clearing derivative contracts on the retirement benefits of future pensioners remains unchanged.
CCPs, clearing members and pension scheme arrangements shall make their best efforts to contribute to the development of viable technical solutions that facilitate the clearing of OTC derivative contracts by such arrangements.
The Commission shall set up an expert group composed of representatives of CCPs, clearing members, pension scheme arrangements and other relevant parties to such viable technical solutions to monitor their efforts and assess the progress made in the development of viable technical solutions that facilitate the clearing of OTC derivative contracts by pension scheme arrangements, including the transfer by such arrangements of cash and non-cash collateral as variation margins. That expert group shall meet at least every six months. The Commission shall consider the efforts made by CCPs, clearing members and pension scheme arrangements when drafting its report pursuant to the first subparagraph.
3. By 18 December 2020 the Commission shall prepare a report assessing:
(a) whether the obligations to report transactions under Article 26 of Regulation (EU) No 600/2014 and under this Regulation create a duplicative transaction reporting obligation for non-OTC derivatives and whether reporting of non-OTC transactions could be reduced or simplified for all counterparties without undue loss of information;
(b) the necessity and appropriateness of aligning the trading obligation for derivatives under Regulation (EU) No 600/2014 with changes made under Regulation (EU) 2019/834 to the clearing obligation for derivatives, in particular to the scope of the entities that are subject to the clearing obligation;
(c) whether any trades that directly result from post-trade risk reduction services, including portfolio compression, should be exempted from the clearing obligation referred to in Article 4(1), taking into account the extent to which those services mitigate risk, in particular counterparty credit risk and operational risk, the potential for circumvention of the clearing obligation and the potential disincentive to central clearing.
The Commission shall submit the report referred to in the first subparagraph to the European Parliament and to the Council, together with any appropriate proposals.
3a. By 18 May 2020, ESMA shall submit a report to the Commission. That report shall assess:
(a) the consistency of the reporting requirements for non-OTC derivatives under Regulation (EU) No 600/2014 and under Article 9 of this Regulation, both in terms of the details of the derivative contracts that are to be reported and access to data by the relevant entities and whether those requirements should be aligned;
(b) the feasibility of further simplifying the reporting chains for all counterparties, including for all indirect clients, taking into account the need for timely reporting and taking into account the measures adopted pursuant to Article 4(4) of this Regulation and Article 30(2) of Regulation (EU) No 600/2014;
(c) the alignment of the trading obligation for derivatives under Regulation (EU) No 600/2014 with changes made under Regulation (EU) 2019/834 to the clearing obligation for derivatives, in particular to the scope of the entities that are subject to the clearing obligation;
(d) in cooperation with the ESRB, whether any trades that directly result from post-trade risk reduction services, including portfolio compression, should be exempted from the clearing obligation referred to in Article 4(1); that report shall:
(i) investigate portfolio compression and other available non-price forming post-trade risk reduction services which reduce non-market risks in derivatives portfolios without changing the market risk of the portfolios, such as rebalancing transactions;
(ii) explain the purposes and functioning of such post-trade risk reduction services, the extent to which they mitigate risk, in particular counterparty credit risk and operational risk, and assess the need to clear such trades or to exempt them from clearing, in order to manage systemic risk; and
(iii) assess to what extent any exemption from the clearing obligation for such services discourages central clearing and may lead to counterparties circumventing the clearing obligation;
(e) whether the list of financial instruments that are considered highly liquid with minimal market and credit risk, in accordance with Article 47, could be extended and whether that list could include one or more money market funds authorised in accordance with Regulation (EU) 2017/1131 of the European Parliament and of the CouncilRegulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds (OJ L 169, 30.6.2017, p. 8)..
4. The Commission shall, in cooperation with the Member States and ESMA, and after requesting the assessment of the ESRB, draw up an annual report assessing any possible systemic risk and cost implications of interoperability arrangements.
The report shall focus at least on the number and complexity of such arrangements, and the adequacy of risk-management systems and models. The Commission shall submit the report to the European Parliament and the Council, together with any appropriate proposals.
The ESRB shall provide the Commission with its assessment of any possible systemic risk implications of interoperability arrangements.
5. ESMA shall present an annual report to the European Parliament, the Council and the Commission on the penalties imposed by competent authorities, including supervisory measures, fines and periodic penalty payments.

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Article 86 Committee procedure 1. The Commission shall be assisted by the European Securities Committee established by Commission Decision 2001/528/ECOJ L 191, 13.7.2001, p. 45.. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011. 2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.3. Where reference is made to this paragraph, Article 8 of Regulation (EU) No 182/2011, in conjunction with Article 5 thereof, shall apply.

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Article 89 Transitional provisions 1. Until 16 August 2018, 18 June 2021, the clearing obligation set out in Article 4 shall not apply to OTC derivative contracts that are objectively measurable as reducing investment risks that directly relating relate to the financial solvency of pension scheme arrangements as defined in Article 2(10). The transitional period shall also apply arrangements, and to entities established for the purpose of providing to provide compensation to members of pension scheme such arrangements in case of a default. The clearing obligation set out in Article 4 shall not apply to OTC derivative contracts as referred to in the first subparagraph of this paragraph entered into by pension scheme arrangements from 17 August 2018 until 16 June 2019. The OTC derivative contracts, which would otherwise be subject to the clearing obligation under Article 4, entered into by those entities during this period shall be subject to the requirements laid down in Article 11. 2. In relation to pension scheme … 1,276 unchanged words … place between a third country and the Union as referred to in Article 75, a trade repository may make the necessary information available to the relevant authorities of that third country until 17 August 2013 provided that it notifies ESMA.

02012R0648-20190101 → 02012R0648-20190617

ANNEX I List of infringements referred to in Article 65(1) I. Infringements relating to organisational requirements or conflicts of interest: (a) a trade repository infringes Article 78(1) by not having robust governance arrangements which include a clear organisational structure with well-defined, transparent and consistent lines of responsibility and adequate internal control mechanisms, including sound administrative and accounting procedures, which prevent the disclosure of confidential information; (b) a trade repository infringes Article 78(2) by not maintaining or operating effective written organisational and administrative arrangements to identify and manage any potential conflicts of interest concerning its managers, its employees, and any person directly or indirectly linked to them by close links; (c) a trade repository infringes Article 78(3) by not establishing adequate policies and procedures sufficient to ensure compliance, including that of its managers and employees, with all the provisions of this Regulation; (d) a trade repository infringes Article 78(4) by not maintaining or operating an adequate organisational structure to ensure continuity and orderly functioning of the trade repository in the performance of its services and activities; (e) a trade repository infringes Article 78(5) by not separating operationally its ancillary services from its function of centrally collecting and maintaining records of derivatives; (f) a trade repository infringes Article 78(6) by not ensuring that its senior management and the members of the board are of sufficiently good repute and experience so as to ensure the sound and prudent management of the trade repository; (g) a trade repository infringes Article 78(7) by not having objective non-discriminatory and publicly disclosed requirements for access by services providers and undertakings subject to the reporting obligation under Article 9; (h) a trade repository infringes Article 78(8) by not publicly disclosing the prices and fees associated with services provided under this Regulation, by not allowing reporting entities to access specific services separately or by charging prices and fees that are not cost related. related; (i) a trade repository infringes point (a) of Article 78(9) by not establishing adequate procedures for the effective reconciliation of data between trade repositories; (j) a trade repository infringes point (b) of Article 78(9) by not establishing adequate procedures to verify the completeness and correctness of the data reported; (k) a trade repository infringes point (c) of Article 78(9) by not establishing adequate policies for the orderly transfer of data to other trade repositories where requested by the counterparties and CCPs referred to in Article 9 or where otherwise necessary. II. Infringements relating to operational requirements: (a) a trade repository infringes Article 79(1) by not identifying sources of operational risk or by not minimising those risks through the development of appropriate systems, controls and procedures; (b) a trade repository infringes Article 79(2) … 330 unchanged words … information in accordance with Article 61(3); (b) a trade repository provides incorrect or misleading answers to questions asked pursuant to Article 62(1)(c); (c) a trade repository does not comply in due time with a supervisory measure adopted by ESMA pursuant to Article 73. 73; (d) a trade repository infringes Article 55(4) by not notifying ESMA in due time of any material changes to the conditions for its registration.