Regulation (EU) No 1095/2010 is amended as follows:
(1)
Article 1 is amended as follows:
(a)
paragraphs 2 and 3 are replaced by the following:
‘2. The Authority shall act within the powers conferred by this Regulation and within the scope of Directives 97/9/EC, 98/26/EC, 2001/34/EC, 2002/47/EC, 2004/109/EC, 2009/65/EC, Directive 2011/61/EU of the European Parliament and of the Council (*39), Regulation (EC) No 1060/2009 and Directive 2014/65/EU of the European Parliament and of the Council (*40), Regulation (EU) 2017/1129 of the European Parliament and of the Council (*41), and to the extent that those acts apply to firms providing investment services or to collective investment undertakings marketing their units or shares and the competent authorities that supervise them, within the relevant parts of, Directives 2002/87/EC and 2002/65/EC, including all directives, regulations, and decisions based on those acts, and of any further legally binding Union act which confers tasks on the Authority.
The Authority shall contribute to the work of the European Supervisory Authority (European Banking Authority) established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council (*42) related to the prevention of the use of the financial system for the purpose of money laundering or terrorist financing in accordance with Directive (EU) 2015/849 of the European Parliament and of the Council (*43) and Regulation (EU) No 1093/2010. The Authority shall decide on its agreement in accordance with Article 9a(9) of Regulation (EU) No 1093/2010.
3. The Authority shall act in the field of activities of financial market participants in relation to issues not directly covered by the legislative acts referred to in paragraph 2, including matters of corporate governance, auditing and financial reporting, taking into account sustainable business models and the integration of environmental, social and governance related factors, provided that such actions are necessary to ensure the effective and consistent application of those acts. The Authority shall also take appropriate action in the context of take-over bids, clearing and settlement and derivative issues.
(*39) Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1)."
(*40) Directive 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)."
(*41) Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (OJ L 168, 30.6.2017, p. 12)."
(*42) Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12)."
(*43) Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).’;"
(b)
the following paragraph is inserted:
‘3a. This Regulation shall apply without prejudice to other Union acts conferring the functions of authorisation or supervision and corresponding powers upon the Authority.’;
(c)
paragraph 5 is amended as follows:
(i)
the first subparagraph is amended as follows:
—
the introductory part is replaced by the following:
‘5. The objective of the Authority shall be to protect the public interest by contributing to the short-, medium- and long-term stability and effectiveness of the financial system, for the Union economy, its citizens and businesses. The Authority shall, within its respective competences, contribute to:’;
—
points (e) and (f) are replaced by the following:
‘(e)
ensuring that the taking of investment and other risks are appropriately regulated and supervised;
(f)
enhancing customer and investor protection;’;
—
the following point is added:
‘(g)
enhancing supervisory convergence across the internal market.’;
(ii)
the second subparagraph is replaced by the following:
‘For those purposes, the Authority shall contribute to ensuring the consistent, efficient and effective application of the acts referred to in paragraph 2 of this Article, foster supervisory convergence, and provide opinions in accordance with Article 16a to the European Parliament, to the Council, and to the Commission.’;
(iii)
the fourth subparagraph is replaced by the following:
‘When carrying out its tasks, the Authority shall act independently, objectively and in a non-discriminatory and transparent manner, in the interests of the Union as a whole, and shall respect, wherever relevant, the principle of proportionality. The Authority shall be accountable and act with integrity and shall ensure that all stakeholders are treated fairly.’;
(iv)
the following subparagraph is added:
‘The content and form of the Authority’s actions and measures, in particular guidelines, recommendations, opinions, questions and answers, draft regulatory standards and draft implementing standards, shall fully respect the applicable provisions of this Regulation and of the legislative acts referred to in paragraph 2. To the extent permitted and relevant under those provisions, the Authority’s actions and measures shall, in accordance with the principle of proportionality, take due account of the nature, scale and complexity of the risks inherent in the business of a financial market participant, undertaking, other subject or financial activity, that is affected by the Authority’s actions and measures.’;
(d)
the following paragraph is added:
‘6. The Authority shall establish, as an integral part thereof, a Committee advising it as to how, in full compliance with applicable rules, its actions and measures should take account of specific differences prevailing in the sector, pertaining to the nature, scale and complexity of risks, to business models and practice as well as to the size of financial institutions and of markets to the extent that such factors are relevant under the rules considered.’;
(2)
Article 2 is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘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 to preserve financial stability and to ensure confidence in the financial system as a whole and effective and sufficient protection for the customers of financial services.’;
(b)
paragraph 4 is replaced by the following:
‘4. In accordance with the principle of sincere cooperation pursuant to Article 4(3) of the Treaty on European Union (TEU), the parties to the ESFS shall cooperate with trust and full mutual respect, in particular in ensuring the flow of appropriate and reliable information among them and from the Authority to the European Parliament, to the Council and to the Commission.’;
(c)
in paragraph 5, the following subparagraph is added:
‘Without prejudice to national competences, references in this Regulation to supervision shall include all relevant activities of all competent authorities to be carried out pursuant to the legislative acts referred to in Article 1(2).’;
(3)
Article 3 is replaced by the following:
Accountability of the Authorities
1. The Authorities referred to in points (a) to (d) of Article 2(2) shall be accountable to the European Parliament and to the Council.
2. In accordance with Article 226 TFEU, the Authority shall fully cooperate with the European Parliament during any investigation carried out under that Article.
3. The Board of Supervisors shall adopt an annual report on the activities of the Authority, including on the performance of the Chairperson’s duties, and shall, by 15 June each year, transmit that report to the European Parliament, to the Council, to the Commission, to the Court of Auditors and to the European Economic and Social Committee. The report shall be made public.
4. At the request of the European Parliament, the Chairperson shall participate in a hearing before the European Parliament on the performance of the Authority. A hearing shall take place at least annually. The Chairperson shall make a statement before the European Parliament and answer any questions from its members, whenever so requested.
5. The Chairperson shall report in writing 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 4.
6. In addition to the information referred to in Articles 11 to 18 and Articles 20 and 33, the report shall also include any relevant information requested by the European Parliament on an ad hoc basis.
7. The Authority shall reply orally or in writing to any question addressed to it by the European Parliament or by the Council within five weeks of its receipt.
8. Upon request, the Chairperson shall hold confidential oral discussions behind closed doors with the Chair, Vice-Chairs and Coordinators of the competent committee of the European Parliament. All participants shall respect the requirements of professional secrecy.
9. Without prejudice to its confidentiality obligations stemming from participation in international fora, the Authority shall inform the European Parliament upon request about its contribution to a united, common, consistent and effective representation of the Union’s interests in such international fora.’;
(4)
in Article 4, point (3), point (ii) is replaced by the following:
‘(ii)
with regard to Directive 2002/65/EC, the authorities and bodies competent for ensuring compliance with the requirements of that Directive by firms providing investment services and by collective investment undertakings marketing their units or shares;’;
(5)
in Article 7, the following paragraph is added:
‘The location of the seat of the Authority shall not affect the Authority’s execution of its tasks and powers, the organisation of its governance structure, the operation of its main organisation, or the main financing of its activities, while allowing, where applicable, for the sharing with Union agencies of administrative support services and facility management services which are not related to the core activities of the Authority.’;
(6)
Article 8 is amended as follows:
(a)
paragraph 1 is amended as follows:
(i)
point (a) is replaced by the following:
‘(a)
based on the legislative acts referred to in Article 1(2), to contribute to the establishment of high-quality common regulatory and supervisory standards and practices, in particular by developing draft regulatory and implementing technical standards, guidelines, recommendations, and other measures, including opinions;’;
(ii)
the following point is inserted:
‘(aa)
to develop and maintain an up-to-date Union supervisory handbook on the supervision of financial market participants in the Union which is to set out best practices and high-quality methodologies and processes and takes into account, inter alia, changing business practices and business models and the size of financial market participants and of markets;’;
(iii)
point (b) is replaced by the following:
‘(b)
to contribute to the consistent application of legally binding Union acts, in particular by contributing to a common supervisory culture, ensuring consistent, efficient and effective application of the legislative acts referred to in Article 1(2), preventing regulatory arbitrage, fostering and monitoring supervisory independence, mediating and settling disagreements between competent authorities, ensuring effective and consistent supervision of financial market participants, ensuring a coherent functioning of colleges of supervisors and taking actions, inter alia, in emergency situations;’;
(iv)
points (e) to (h) are replaced by the following:
‘(e)
to organise and conduct peer reviews of competent authorities and, in that context, to issue guidelines and recommendations and to identify best practices, with a view to strengthening consistency in supervisory outcomes;
(f)
to monitor and assess market developments in the area of its competence including where relevant, developments relating to trends in innovative financial services duly considering developments relating to environmental, social and governance related factors;
(g)
to undertake market analyses to inform the discharge of the Authority’s functions;
(h)
to foster, where relevant, consumer and investor protection, in particular with regards to shortcomings in a cross-border context and taking related risks into account;’;
(v)
the following point is inserted:
‘(ia)
to contribute to the establishment of a common Union financial data strategy;’;
(vi)
the following point is inserted:
‘(ka)
to publish on its website, and to update regularly, all regulatory technical standards, implementing technical standards, guidelines, recommendations and questions and answers for each legislative act referred to in Article 1(2), including overviews that concern the state of play of ongoing work and the planned timing of the adoption of draft regulatory technical standards and draft implementing technical standards.’;
(vii)
point (l) is deleted;
(b)
the following paragraph is inserted:
‘1a. When carrying out its tasks in accordance with this Regulation, the Authority shall:
(a)
use the full powers available to it;
(b)
with due regard to the objective to ensure the safety and soundness of financial market participants, take fully into account the different types, business models and sizes of financial market participants; and
(c)
take account of technological innovation, innovative and sustainable business models, and the integration of environmental, social and governance related factors.’;
(c)
paragraph 2 is amended as follows:
(i)
the following points are inserted:
‘(ca)
issue recommendations, as laid down in Article 29a;’,
‘(da)
issue warnings in accordance with Article 9(3);’;
(ii)
point (g) is replaced by the following:
‘(g)
issue opinions to the European Parliament, to the Council, or to the Commission as provided for in Article 16a;’;
(iii)
the following points are inserted:
‘(ga)
issue answers to questions, as laid down in Article 16b;
(gb)
take action in accordance with Article 9a;’;
(d)
the following paragraph is added:
‘3. When carrying out the tasks referred to in paragraph 1 and exercising the powers referred to in paragraph 2, the Authority shall act based on and within the limits of the legislative framework and shall have due regard to the principle of proportionality, where relevant, and better regulation, including the results of cost-benefit analyses in accordance with this Regulation.
The open public consultations referred to in Articles 10, 15, 16 and 16a shall be conducted as widely as possible to ensure an inclusive approach towards all interested parties and shall allow reasonable time for stakeholders to respond. The Authority shall publish a summary of the input received from stakeholders and an overview of how information and views gathered from the consultations were used in a draft regulatory technical standard and a draft implementing technical standard.’;
(7)
Article 9 is amended as follows:
(a)
paragraph 1 is amended as follows:
(i)
point (a) is replaced by the following:
‘(a)
collecting, analysing and reporting on consumer trends, such as the development of costs and charges of retail financial services and products in Member States;’;
(ii)
the following points are inserted:
‘(aa)
undertaking in-depth thematic reviews of market conduct, building a common understanding of markets practices in order to identify potential problems and analyse their impact;
(ab)
developing retail risk indicators for the timely identification of potential causes of consumer and investor harm;’;
(iii)
the following points are added:
‘(e)
contributing to a level playing field in the internal market where consumers and other users of financial services have fair access to financial services and products;
(f)
coordinating mystery shopping activities of competent authorities, if applicable.’;
(b)
paragraph 2 is replaced by the following
‘2. The Authority shall monitor new and existing financial activities and may adopt guidelines and recommendations with a view to promoting the safety and soundness of markets, and convergence and effectiveness of regulatory and supervisory practices.’;
(c)
paragraphs 4 and 5 are replaced by the following:
‘4. The Authority shall establish, as an integral part thereof, a Committee on consumer protection and financial innovation, which brings together all relevant competent authorities and authorities responsible for consumer protection with a view to enhancing consumer protection, achieving a coordinated approach to the regulatory and supervisory treatment of new or innovative financial activities, and providing advice for the Authority to present to the European Parliament, to the Council and to the Commission. The Authority shall closely cooperate with the European Data Protection Board established by Regulation (EU) 2016/679 of the European Parliament and of the Council (*44) to avoid duplication, inconsistencies and legal uncertainty in the sphere of data protection. The Authority may also invite national data protection authorities as observers in the Committee.
5. The Authority may temporarily prohibit or restrict the marketing, distribution or sale of certain financial products, instruments or activities that have the potential to cause significant financial damage to customers or consumers, or threaten the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Union in the cases specified, and under the conditions laid down, in the legislative acts referred to in Article 1(2), or, if so required, in the case of an emergency situation in accordance with, and under the conditions laid down in, Article 18.
The Authority shall review the decision referred to in the first subparagraph at appropriate intervals and at least every six months. Following at least two consecutive renewals, and based on proper analysis which aims to assess the impact on the customer or consumer, the Authority may decide on the annual renewal of the prohibition.
A Member State may request the Authority to reconsider its decision. In that case, the Authority shall decide, in accordance with the procedure set out in the second subparagraph of Article 44(1), whether to maintain that decision.
The Authority may also assess the need to prohibit or restrict certain types of financial activity or practice and, where there is such a need, inform the Commission and the competent authorities in order to facilitate the adoption of any such prohibition or restriction.
(*44) Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1).’;"
(8)
the following article is inserted:
‘Article 9a
No action letters
1. The Authority shall take the measures referred to in paragraph 2 of this Article only in exceptional circumstances when it considers that the application of one of the legislative acts referred to in Article 1(2), or of any delegated or implementing acts based on those legislative acts, is liable to raise significant issues, for one of the following reasons:
(a)
the Authority considers that provisions contained in such act may directly conflict with another relevant act;
(b)
where the act is one of the legislative acts referred to in Article 1(2), the absence of delegated or implementing acts that would complement or specify the act in question would raise legitimate doubts concerning the legal consequences flowing from the legislative act or its proper application;
(c)
the absence of guidelines and recommendations as referred to in Article 16 would raise practical difficulties concerning the application of the relevant legislative act.
2. In the cases referred to in paragraph 1, the Authority shall send a detailed account in writing to the competent authorities and the Commission of the issues it considers to exist.
In the cases referred to in points
(a) and
(b) of paragraph 1, the Authority shall provide the Commission with an opinion on any action it considers appropriate, in the form of a new legislative proposal or a proposal for a new delegated or implementing act, and on the urgency that, in the Authority’s judgment, is attached to the issue. The Authority shall make its opinion public.
In the case referred to in point (c) of paragraph 1 of this Article, the Authority shall evaluate as soon as possible the need to adopt relevant guidelines or recommendations in accordance with Article 16.
The Authority shall act expeditiously, in particular with a view to contributing to the prevention of the issues as referred to in paragraph 1, whenever possible.
3. Where necessary in the cases referred to in paragraph 1, and pending the adoption and application of new measures following the steps referred to in paragraph 2, the Authority shall issue opinions regarding specific provisions of the acts referred to in paragraph 1 with a view to furthering consistent, efficient and effective supervisory and enforcement practices, and the common, uniform and consistent application of Union law.
4. Where, on the basis of information received, in particular from competent authorities, the Authority considers that any of the legislative acts referred to in Article 1(2), or any delegated or implementing act based on those legislative acts, raises significant exceptional issues pertaining to market confidence, customer or investor protection, the orderly functioning and integrity of financial markets or commodity markets, or the stability of the whole or part of the financial system in the Union, it shall, without undue delay, send a detailed account in writing to the competent authorities and the Commission of the issues it considers to exist. The Authority may provide the Commission with an opinion on any action it considers appropriate, in the form of a new legislative proposal or a proposal for a new delegated or implementing act, and on the urgency of the issue. The Authority shall make its opinion public.’;
(9)
Article 10 is amended as follows:
(a)
paragraph 1 is amended as follows:
(i)
the first subparagraph is replaced by the following:
‘1. Where the European Parliament and the Council delegate power to the Commission to adopt regulatory technical standards by means of delegated acts pursuant to Article 290 TFEU in order to ensure consistent harmonisation in the areas specifically set out in the legislative acts referred to in Article 1(2) of this Regulation, the Authority may develop draft regulatory technical standards. The Authority shall submit its draft regulatory technical standards to the Commission for adoption. At the same time, the Authority shall forward those draft regulatory technical standards for information to the European Parliament and to the Council.’;
(ii)
the third subparagraph is replaced by the following:
‘Before submitting them to the Commission, the Authority shall conduct open public consultations on draft regulatory technical standards and shall analyse the potential related costs and benefits, unless such consultations and analyses are highly disproportionate in relation to the scope and impact of the draft regulatory technical standards concerned or in relation to the particular urgency of the matter. The Authority shall also request the advice of the Securities and Markets Stakeholder Group referred to in Article 37.’;
(iii)
the fourth subparagraph is deleted;
(iv)
the fifth and the sixth subparagraphs are replaced by the following:
‘Within three months of receipt of a draft regulatory technical standard, the Commission shall decide whether to adopt it. The Commission shall inform the European Parliament and the Council, in due time, where the adoption cannot take place within the three-month period. The Commission may adopt the draft regulatory technical standard in part only, or with amendments, where the Union’s interests so require.
Where the Commission intends not to adopt a draft regulatory technical standard or to adopt it in part or with amendments, it shall send the draft regulatory technical standard back to the Authority, explaining why it does not adopt it, or explaining the reasons for its amendments. The Commission shall send a copy of its letter to the European Parliament and to the Council. Within a period of six weeks, the Authority may amend the draft regulatory technical standard on the basis of the Commission’s proposed amendments and resubmit it in the form of a formal opinion to the Commission. The Authority shall send a copy of its formal opinion to the European Parliament and to the Council.’;
(b)
paragraph 2 is replaced by the following:
‘2. Where the Authority has not submitted a draft regulatory technical standard within the time limit set out in the legislative acts referred to in Article 1(2), the Commission may request such a draft within a new time limit. The Authority shall inform the European Parliament, the Council and the Commission, in due time, that it will not comply with the new time limit.’;
(c)
in paragraph 3, the second subparagraph is replaced by the following:
‘The Commission shall conduct open public consultations on draft regulatory technical standards and analyse the potential related costs and benefits, unless such consultations and analyses are disproportionate in relation to the scope and impact of the draft regulatory technical standards concerned or in relation to the particular urgency of the matter. The Commission shall also request the advice of the Securities and Markets Stakeholder Group referred to in Article 37.’;
(d)
paragraph 4 is replaced by the following:
‘4. The regulatory technical standards shall be adopted by means of regulations or decisions. The words “regulatory technical standard” shall appear in the title of such regulations or decisions. Those standards shall be published in the Official Journal of the European Union and shall enter into force on the date stated therein.’;
(10)
in Article 13(1), the second subparagraph is deleted;
(11)
Article 15 is amended as follows:
(a)
paragraphs 1 and 2 are replaced by the following:
‘1. Where the European Parliament and the Council confer implementing powers on the Commission to adopt implementing technical standards by means of implementing acts pursuant to Article 291 TFEU, in the areas specifically set out in the legislative acts referred to in Article 1(2) of this Regulation, the Authority may develop draft implementing technical standards. Implementing technical standards shall be technical, shall not imply strategic decisions or policy choices and their content shall be to determine the conditions of application of those acts. The Authority shall submit its draft implementing technical standards to the Commission for adoption. At the same time, the Authority shall forward those technical standards for information to the European Parliament and to the Council.
Before submitting draft implementing technical standards to the Commission, the Authority shall conduct open public consultations and shall analyse the potential related costs and benefits, unless such consultations and analyses are highly disproportionate in relation to the scope and impact of the draft implementing technical standards concerned or in relation to the particular urgency of the matter. The Authority shall also request the advice of the Securities and Markets Stakeholder Group referred to in Article 37.
Within three months of receipt of a draft implementing technical standard, the Commission shall decide whether to adopt it. The Commission may extend that period by one month. The Commission shall inform the European Parliament and the Council in due time where the adoption cannot take place within the three-month period. The Commission may adopt the draft implementing technical standard in part only, or with amendments, where the Union’s interests so require.
Where the Commission intends not to adopt a draft implementing technical standard or intends to adopt it in part or with amendments, it shall send it back to the Authority explaining why it does not intend to adopt it or explaining the reasons for its amendments. The Commission shall send a copy of its letter to the European Parliament and to the Council. Within a period of six weeks, the Authority may amend the draft implementing technical standard on the basis of the Commission’s proposed amendments and resubmit it in the form of a formal opinion to the Commission. The Authority shall send a copy of its formal opinion to the European Parliament and to the Council.
If, on the expiry of the six-week period referred to in the fourth subparagraph, the Authority has not submitted an amended draft implementing technical standard, or has submitted a draft implementing technical standard that is not amended in a way consistent with the Commission’s proposed amendments, the Commission may adopt the implementing technical standard with the amendments it considers relevant or reject it.
The Commission shall not change the content of a draft implementing technical standard prepared by the Authority without prior coordination with the Authority, as set out in this Article.
2. Where the Authority has not submitted a draft implementing technical standard within the time limit set out in the legislative acts referred to in Article 1(2), the Commission may request such a draft within a new time limit. The Authority shall inform the European Parliament, the Council and the Commission, in due time, that it will not comply with the new time limit.’;
(b)
in paragraph 3, the second subparagraph is replaced by the following:
‘The Commission shall conduct open public consultations on draft implementing technical standards and analyse the potential related costs and benefits, unless such consultations and analyses are disproportionate in relation to the scope and impact of the draft implementing technical standards concerned or in relation to the particular urgency of the matter. The Commission shall also request the advice of the Securities and Markets Stakeholder Group referred to in Article 37.’;
(c)
paragraph 4 is replaced by the following:
‘4. The implementing technical standards shall be adopted by means of regulations or decisions. The words “implementing technical standard” shall appear in the title of such regulations or decisions. Those standards shall be published in the Official Journal of the European Union and shall enter into force on the date stated therein.’;
(12)
Article 16 is amended as follows:
(a)
paragraphs 1 and 2 are replaced by the following:
‘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 law, issue guidelines addressed to all competent authorities or all financial market participants and issue recommendations to one or more competent authorities or to one or more financial market participants.
Guidelines and recommendations shall be in accordance with the empowerments conferred in the legislative acts referred to in Article 1(2) or in this Article.
2. The Authority shall, where appropriate, conduct open public consultations regarding the guidelines and recommendations which it issues and analyse the related potential costs and benefits of issuing such guidelines and recommendations. Those consultations and analyses shall be proportionate in relation to the scope, nature and impact of the guidelines or recommendations. The Authority shall, where appropriate, also request advice from the Securities and Markets Stakeholder Group referred to in Article 37. Where the Authority does not conduct open public consultations or does not request advice from the Securities and Markets Stakeholder Group, the Authority shall provide reasons.’;
(b)
the following paragraph is inserted:
‘2a. Guidelines and recommendations shall not merely refer to, or reproduce, elements of legislative acts. Before issuing a new guideline or recommendation, the Authority shall first review existing guidelines and recommendations, in order to avoid any duplication.’;
(c)
paragraph 4 is replaced by the following:
‘4. In the report referred to in Article 43(5), the Authority shall inform the European Parliament, the Council and the Commission of the guidelines and recommendations that have been issued.’;
(13)
the following articles are inserted:
‘Article 16a
Opinions
1. The Authority may, upon a request from the European Parliament, from the Council or from the Commission, or on its own initiative, provide opinions to the European Parliament, the Council and the Commission on all issues related to its area of competence.
2. The request referred to in paragraph 1 may include a public consultation or a technical analysis.
3. With regard to the prudential assessment of mergers and acquisitions falling within the scope of Directive 2014/65/EU and which according to that Directive require consultation between competent authorities from two or more Member States, the Authority may, at the request of one of the competent authorities concerned, issue and publish an opinion on a prudential assessment, except in relation to the criteria set out in in point (e) of Article 13(1) of Directive 2014/65/EU. The opinion shall be issued promptly and, in any event, before the end of the assessment period in accordance with Directive 2014/65/EU.
4. The Authority may, upon a request from the European Parliament, from the Council or from the Commission provide technical advice to the European Parliament, to the Council and to the Commission in the areas set out in the legislative acts referred to in Article 1(2).
Article 16b
Questions and answers
1. Without prejudice to paragraph 5 of this Article, questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2), associated delegated and implementing acts, and guidelines and recommendations, adopted pursuant to those legislative acts, may be submitted by any natural or legal person, including competent authorities and Union institutions and bodies, to the Authority in any official language of the Union.
Before submitting a question to the Authority, financial market participants shall consider whether to address the question in the first place to their competent authority.
Before publishing answers to admissible questions, the Authority may seek further clarification on questions asked by the natural or legal person referred to in this paragraph.
2. Answers by the Authority to questions as referred to in paragraph 1 shall be non-binding. Answers shall be made available at least in the language in which the question was submitted.
3. The Authority shall establish and maintain a web-based tool available on its website for the submission of questions and the timely publication of all questions received as well as all answers to all admissible questions pursuant to paragraph 1, unless such publication is in conflict with the legitimate interest of those persons or would involve risks to the stability of the financial system. The Authority may reject questions it does not intend to answer. Rejected questions shall be published by the Authority on its website for a period of two months.
4. Three voting members of the Board of Supervisors may request the Board of Supervisors to decide pursuant to Article 44 whether to address the issue of the admissible question referred to in paragraph 1 of this Article in guidelines pursuant to Article 16, to request advice from the Stakeholder Group referred to in Article 37, to review questions and answers at appropriate intervals, to conduct open public consultations or to analyse potential related costs and benefits. Such consultations and analyses shall be proportionate in relation to the scope, nature and impact of the draft questions and answers concerned or in relation to the particular urgency of the matter. When involving the Stakeholder Group referred to in Article 37, a duty of confidentiality shall apply.
5. The Authority shall forward questions that require the interpretation of Union law to the Commission. The Authority shall publish any answers provided by the Commission.’;
(14)
Article 17 is amended as follows:
(a)
paragraph 2 is amended as follows:
(i)
the first subparagraph is replaced by the following:
‘2. Upon request from one or more competent authorities, the European Parliament, the Council, the Commission, the Securities and Markets Stakeholder Group, or on its own initiative, including when this is based on well substantiated information from natural or legal persons, and after having informed the competent authority concerned, the Authority shall outline how it intends to proceed with the case and, where appropriate, investigate the alleged breach or non-application of Union law.’;
(ii)
the following subparagraphs are added:
‘Without prejudice to the powers laid down in Article 35, the Authority may, after having informed the competent authority concerned, address a duly justified and reasoned request for information directly to other competent authorities whenever requesting information from the competent authority concerned has proven, or is deemed to be, insufficient to obtain the information that is deemed necessary for the purpose of investigating an alleged breach or non-application of Union law.
The addressee of such a request shall provide the Authority with clear, accurate and complete information without undue delay.’;
(b)
the following paragraph is inserted:
‘2a. Without prejudice to powers under this Regulation and before issuing a recommendation as set out in paragraph 3, the Authority shall engage with the competent authority concerned where it considers such engagement appropriate in order to resolve a breach of Union law, in an attempt to reach agreement on actions necessary for the competent authority to comply with Union law.’;
(c)
paragraphs 6 and 7 are replaced by the following:
‘6. Without prejudice to the powers of the Commission pursuant to Article 258 TFEU, where a competent authority does not comply with the formal opinion referred to in paragraph 4 of this Article within the period specified therein, and where it is necessary to remedy in a timely manner such non-compliance 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 legislative acts referred to in Article 1(2) of this Regulation are directly applicable to financial market participants, adopt an individual decision addressed to a financial market participant requiring it to take all 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 formal opinion issued by the Commission pursuant to paragraph 4.
7. Decisions adopted in accordance with paragraph 6 shall prevail over any previous decision adopted by the competent authorities on the same matter.
When taking action in relation to issues which are subject to a formal opinion pursuant to paragraph 4 or to a decision pursuant to paragraph 6, competent authorities shall comply with the formal opinion or the decision, as the case may be.’;
(15)
the following article is inserted:
‘Article 17a
Protection of reporting persons
1. The Authority shall have in place dedicated reporting channels for receiving and handling information provided by a natural or legal person reporting on actual or potential breaches, abuse of law, or non-application of Union law.
2. The natural or legal persons reporting through those channels shall be protected against retaliation in accordance with Directive (EU) 2019/1937 of the European Parliament and of the Council (*45), where applicable.
3. The Authority shall ensure that all information may be submitted anonymously or confidentially, and safely. Where the Authority deems that the submitted information contains evidence or significant indications of a material breach, it shall provide feedback to the reporting person.
(*45) Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ L 305, 26.11.2019, p. 17).’;"
(16)
in Article 18, paragraph 3 is replaced by the following:
‘3. Where the Council has adopted a decision pursuant to paragraph 2 of this Article, and in exceptional circumstances, where coordinated action by competent authorities is necessary to respond to 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 or customer and investor protection, the Authority may adopt individual decisions requiring competent authorities to take the necessary action in accordance with the legislative acts referred to in Article 1(2) to address any such developments by ensuring that financial market participants and competent authorities satisfy the requirements laid down in those legislative acts.’;
(17)
Article 19 is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. In cases specified in the legislative acts referred to in Article 1(2) and without prejudice to the powers laid down in Article 17, the Authority may assist the competent authorities in reaching an agreement in accordance with the procedure set out in paragraphs 2 to 4 of this Article in either of the following circumstances:
(a)
at the request of one or more of the competent authorities concerned where a competent authority disagrees with the procedure or content of an action, proposed action, or inactivity of another competent authority;
(b)
in cases where the legislative acts referred to in Article 1(2) provide that the Authority may assist, on its own initiative, where on the basis of objective reasons, disagreement can be determined between competent authorities.
In cases where the legislative acts referred to in Article 1(2) require a joint decision to be taken by competent authorities and, where, in accordance with those acts, the Authority may assist, on its own initiative, in reaching an agreement in accordance with the procedure set out in paragraphs 2 to 4 of this Article, the competent authorities concerned, a disagreement shall be presumed in the absence of a joint decision being taken by those authorities within the time limits set out in those acts.’;
(b)
the following paragraphs are inserted:
‘1a. The competent authorities concerned shall, in the following cases, notify the Authority without undue delay that an agreement has not been reached:
(a)
where a time limit for reaching an agreement between competent authorities has been provided for in the legislative acts referred to in Article 1(2), and either of the following occurs:
(i)
the time limit has expired; or
(ii)
at least two competent authorities concerned conclude that a disagreement exists, on the basis of objective reasons;
(b)
where no time limit for reaching an agreement between competent authorities has been provided for in the legislative acts referred to in Article 1(2), and either of the following occurs:
(i)
at least two competent authorities concerned conclude that a disagreement exists on the basis of objective reasons; or
(ii)
two months have elapsed from the date of receipt by a competent authority of a request from another competent authority to take certain action in order to comply with those acts and the requested authority has not yet adopted a decision that satisfies the request.
1b. The Chairperson shall assess whether the Authority should act in accordance with paragraph 1. Where the intervention is at the Authority’s own initiative, the Authority shall notify the competent authorities concerned of its decision regarding the intervention.
Pending the Authority’s decision in accordance with the procedure set out in Article 44(4), in cases where the legislative acts referred to in Article 1(2) require a joint decision to be taken, all competent authorities involved in the joint decision shall defer their individual decisions. Where the Authority decides to act, all the competent authorities involved in the joint decision shall defer their decisions until the procedure set out in paragraphs 2 and 3 of this Article is concluded.’;
(c)
paragraph 3 is replaced by the following:
‘3. Where the competent authorities concerned fail to reach an agreement within the conciliation phase referred to in paragraph 2, the Authority may take a decision requiring those authorities to take specific action, or to refrain from certain action, in order to settle the matter, and to ensure compliance with Union law. The decision of the Authority shall be binding on the competent authorities concerned. The Authority’s decision may require competent authorities to revoke or amend a decision that they have adopted or to make use of the powers which they have under the relevant Union law.’;
(d)
the following paragraph is inserted:
‘3a. The Authority shall notify the competent authorities concerned of the conclusion of the procedures under paragraphs 2 and 3 together with, where applicable, its decision taken under paragraph 3.’;
(e)
paragraph 4 is replaced by the following:
‘4. Without prejudice to the powers of the Commission pursuant to Article 258 TFEU, 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 legislative acts referred to in Article 1(2) of this Regulation, the Authority may adopt an individual decision addressed to that financial market participant requiring it to take all necessary action to comply with its obligations under Union law, including the cessation of any practice.’;
(18)
Article 21 is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. The Authority shall promote and monitor, within the scope of its powers, the efficient, effective and consistent functioning of the colleges of supervisors where established by legislative acts referred to in Article 1(2) and foster the consistency and coherence of the application of Union law among the colleges of supervisors. With the objective of converging supervisory best practices, the Authority shall promote joint supervisory plans and joint examinations, and staff from the Authority shall have full participation rights in the colleges of supervisors and, as such, shall be able to participate in the activities of the colleges of supervisors, including on-site inspections, carried out jointly by two or more competent authorities.’;
(b)
paragraph 2 is amended as follows:
(i)
the first subparagraph is replaced by the following:
‘2. The Authority shall lead in ensuring a consistent and coherent functioning of colleges of supervisors for cross-border institutions across the Union, taking account of the systemic risk posed by financial market participants referred to in Article 23, and shall, where appropriate, convene a meeting of a college.’;
(ii)
in the third subparagraph, point (b) is replaced by the following:
‘(b)
initiate and coordinate Union-wide stress tests in accordance with Article 32 to assess the resilience of financial market participants, in particular the systemic risk posed by financial market participants as referred to in Article 23, to adverse market developments, and evaluate the potential for systemic risk posed by key financial market participants to increase in situations of stress, ensuring that a consistent methodology is applied at national level to such tests and, where appropriate, address a recommendation to the competent authority to correct issues identified in the stress test, including a recommendation to conduct specific assessments; it may recommend competent authorities to carry out on-site inspections, and may participate in such on-site inspections, in order to ensure comparability and reliability of methods, practices and results of Union-wide assessments;’;
(c)
paragraph 3 is replaced by the following:
‘3. The Authority may develop draft regulatory and implementing technical standards in accordance with the empowerments laid down in the legislative acts referred to in Article 1(2), and in accordance with Articles 10 to 15, to ensure uniform conditions of application with respect to the provisions regarding the operational functioning of colleges of supervisors. The Authority may issue guidelines and recommendations in accordance with Article 16 to promote convergence in supervisory functioning and best practices that have been adopted by the colleges of supervisors.’;
(19)
Article 22 is amended as follows:
(a)
the title is replaced by the following:
‘General provisions on systemic risk’;
(b)
paragraph 4 is replaced by the following:
‘4. Upon request from one or more competent authorities, the European Parliament, the Council or the Commission, or on its own initiative, the Authority may conduct an inquiry into a particular type of financial activity or type of product or type of conduct in order to assess potential threats to the integrity of the financial markets or the stability of the financial system or to the protection of customers or investors.
Following an inquiry conducted pursuant to the first subparagraph, the Board of Supervisors may make appropriate recommendations for action to the competent authorities concerned.
For those purposes, the Authority may use the powers conferred on it under this Regulation, including Article 35.’;
(20)
in Article 23, paragraph 1 is replaced by the following:
‘1. The Authority shall, in consultation with the ESRB, develop criteria for the identification and measurement of systemic risk and an adequate stress-testing regime which includes an evaluation of the potential for systemic risk posed by, or to, financial market participants to increase in situations of stress, including potential environmental-related systemic risk. The financial market participants that may pose a systemic risk shall be subject to strengthened supervision, and where necessary, the recovery and resolution procedures referred to in Article 25.’;
(21)
in Article 27(2), the second subparagraph is deleted;
(22)
Article 29 is amended as follows:
(a)
paragraph 1 is amended as follows:
(i)
the following points are inserted:
‘(aa)
establishing Union strategic supervisory priorities in accordance with Article 29a;
(ab)
establishing coordination groups in accordance with Article 45b to promote supervisory convergence and identify best practices;’;
(ii)
point (b) is replaced by the following:
‘(b)
promoting an effective bilateral and multilateral exchange of information between competent authorities, pertaining to all relevant issues, including cyber security and cyber-attacks, with full respect for the applicable confidentiality and data protection provisions provided for in the relevant Union legislative acts;’;
(iii)
point (e) is replaced by the following:
‘(e)
establishing sectoral and cross-sectoral training programmes, including with respect to technological innovation, facilitating personnel exchanges and encouraging competent authorities to intensify the use of secondment schemes and other tools;’;
(iv)
the following point is added:
‘(f)
putting in place a monitoring system to assess material environmental, social and governance-related risks, taking into account the Paris Agreement to the United Nations Framework Convention on Climate Change;’;
(b)
paragraph 2 is replaced by the following:
‘2. The Authority may, as appropriate, develop new practical instruments and convergence tools to promote common supervisory approaches and practices.
For the purpose of establishing a common supervisory culture, the Authority shall develop and maintain an up-to-date Union supervisory handbook on the supervision of financial markets participants in the Union, which duly takes into account the nature, scale and complexity of risks, business practices, business models and size of financial institutions and of markets, including changes due to technological innovation, of financial market participants and markets. The Union supervisory handbook shall set out best practices and shall specify high-quality methodologies and processes.
The Authority shall, where appropriate, conduct open public consultations regarding the opinions referred to in point (a) of paragraph 1, and tools and instruments referred to in this paragraph. It shall also, where appropriate, analyse the related potential costs and benefits. Such consultations and analyses shall be proportionate in relation to the scope, nature and impact of the opinions or tools and instruments. The Authority shall, where appropriate, also request advice from the Securities and Markets Stakeholder Group.’;
(23)
the following Article is inserted:
‘Article 29a
Union strategic supervisory priorities
Following a discussion in the Board of Supervisors and taking into account contributions received from competent authorities, existing work by the Union institutions, and analysis, warnings and recommendations published by the ESRB, the Authority shall, at least every three years, by 31 March, identify up to two priorities of Union-wide relevance which shall reflect future developments and trends. Competent authorities shall take those priorities into account when drawing up their work programmes and shall notify the Authority accordingly. The Authority shall discuss the relevant activities by the competent authorities in the following year and draw conclusions. The Authority shall discuss possible follow up which may include guidelines, recommendations to competent authorities, and peer reviews, in the respective area.
The priorities of Union-wide relevance identified by the Authority shall not prevent competent authorities from applying their best practices, acting on their additional priorities and developments, and national specificities shall be considered.’;
(24)
Article 30 is replaced by the following:
‘Article 30
Peer reviews of competent authorities
1. The Authority shall periodically conduct peer reviews of some or all of the activities of competent authorities, to further strengthen consistency and effectiveness in supervisory outcomes. To that end, the Authority shall develop methods to allow for an objective assessment and comparison between the competent authorities reviewed. When planning and conducting peer reviews, existing information and evaluations already made with regard to the competent authority concerned, including any relevant information provided to the Authority in accordance with Article 35, and any relevant information from stakeholders shall be taken into account.
2. For the purposes of this Article, the Authority shall establish ad hoc peer review committees, which shall be composed of staff from the Authority and members of the competent authorities. The peer review committees shall be chaired by a member of the Authority’s staff. The Chairperson, after consulting the Management Board and following an open call for participation, shall propose the chair and the members of a peer review committee which shall be approved by the Board of Supervisors. The proposal shall be deemed to be approved unless, within 10 days of the Chairperson proposing it, the Board of Supervisors adopts a decision to reject it.
3. The peer review shall include an assessment of, but shall not be limited to:
(a)
the adequacy of resources, the degree of independence, and governance arrangements of the competent authority, with particular regard to the effective application of the legislative acts referred to in Article 1(2) and the capacity to respond to market developments;
(b)
the effectiveness and the degree of convergence reached in the application of Union law and in supervisory practice, including regulatory technical standards and implementing technical standards, guidelines and recommendations adopted pursuant to Articles 10 to 16, and the extent to which the supervisory practice achieves the objectives set out in Union law;
(c)
the application of best practices developed by competent authorities whose adoption might be of benefit for other competent authorities;
(d)
the effectiveness and the degree of convergence reached with regard to the enforcement of the provisions adopted in the implementation of Union law, including the administrative sanctions and other administrative measures imposed against persons responsible where those provisions have not been complied with.
4. The Authority shall produce a report setting out the results of the peer review. That peer review report shall be prepared by the peer review committee and adopted by the Board of Supervisors in accordance with Article 44(4). When drafting that report, the peer review committee shall consult the Management Board in order to maintain consistency with other peer review reports and to ensure a level playing field. The Management Board shall assess in particular whether the methodology has been applied in the same manner. The report shall explain and indicate the follow-up measures that are deemed appropriate, proportionate and necessary as a result of the peer review. Those follow-up measures may be adopted in the form of guidelines and recommendations pursuant to Article 16 and opinions pursuant to point (a) of Article 29(1).
In accordance with Article 16(3), the competent authorities shall make every effort to comply with any guidelines and recommendations issued.
When developing draft regulatory technical standards or draft implementing technical standards in accordance with Articles 10 to 15, or guidelines or recommendations in accordance with Article 16, the Authority shall take into account the outcome of the peer review, along with any other information acquired by the Authority in carrying out its tasks, in order to ensure convergence of the highest quality supervisory practices.
5. The Authority shall submit an opinion to the Commission where, having regard to the outcome of the peer review or to any other information acquired by the Authority in carrying out its tasks, it considers that further harmonisation of Union rules applicable to financial market participants or competent authorities would be necessary from the Union’s perspective.
6. The Authority shall undertake a follow-up report after two years of the publication of the peer review report. The follow-up report shall be prepared by the peer review committee and adopted by the Board of Supervisors in accordance with Article 44(4). When drafting that report, the peer review committee shall consult the Management Board in order to maintain consistency with other follow up reports. The follow-up report shall include an assessment of, but shall not be limited to, the adequacy and effectiveness of the actions undertaken by the competent authorities that are subject to the peer review in response to the follow up measures of the peer review report.
7. The peer review committee shall, after consulting the competent authorities subject to the peer review, identify the reasoned main findings of the peer review. The Authority shall publish the reasoned main findings of the peer review and of the follow-up report referred to in paragraph 6. Where the reasoned main findings of the Authority differ from those identified by the peer review committee, the Authority shall transmit, on a confidential basis, the peer review committee’s findings to the European Parliament, to the Council and to the Commission. Where a competent authority that is subject to the peer review is concerned that the publication of the Authority’s reasoned main findings would pose a risk to the stability of the financial system, it shall have the possibility to refer the matter to the Board of Supervisors. The Board of Supervisors may decide not to publish those extracts.
8. For the purposes of this Article the Management Board shall make a proposal for a peer review work plan for the coming two years, which shall inter alia reflect the lessons learnt from the past peer re-view processes and the discussions of coordination groups referred to in Article 45b. The peer review work plan shall constitute a separate part of the annual and multiannual working programme. It shall be made public. In case of urgency or unforeseen events, the Authority may decide to carry out additional peer reviews.’;
(25)
Article 31 is amended as follows:
(a)
the first paragraph is replaced by the following:
‘1. The Authority shall fulfil a general coordination role between competent authorities, in particular in situations where adverse developments could potentially jeopardise the orderly functioning and integrity of financial markets or the stability of the financial system in the Union.’;
(b)
the second paragraph is amended as follows:
(i)
the introductory part is replaced by the following:
‘2. The Authority shall promote a coordinated Union response, inter alia, by:’;
(ii)
point (e) is replaced by the following:
‘(e)
taking appropriate measures in the event of developments which may jeopardise the functioning of the financial markets with a view to the coordination of actions undertaken by relevant competent authorities;’;
(iii)
the following point is inserted:
‘(ea)
taking appropriate measures to coordinate actions undertaken by relevant competent authorities with a view to facilitating the entry into the market of actors or products relying on technological innovation;’;
(c)
the following paragraph is added:
‘3. In order to contribute to the establishment of a common European approach towards technological innovation, the Authority shall promote supervisory convergence, with the support, where relevant, of the Committee on consumer protection and financial innovation, facilitating entry into the market of actors or products relying on technological innovation, in particular through the exchange of information and best practices. Where appropriate, the Authority may adopt guidelines or recommendations in accordance with Article 16.’;
(26)
the following Articles are inserted:
‘Article 31a
Information exchange on fitness and propriety
The Authority shall, together with the European Supervisory Authority (European Banking Authority) and with the European Supervisory Authority (European Insurance and Occupational Pensions Authority), establish a system for the exchange of information relevant to the assessment of the fitness and propriety of holders of qualifying holdings, directors and key function holders of financial market participant by competent authorities in accordance with the legislative acts referred to in Article 1(2).
Article 31b
Coordination function in relation to orders, transactions and activities with significant cross-border effects
Where a competent authority has evidence or clear indications from several different sources to suspect that orders, transactions or any other activity with significant cross-border effects threaten the orderly functioning and integrity of financial markets or the financial stability in the Union, it shall promptly notify the Authority and provide the relevant information. The Authority may issue an opinion on appropriate follow-up to the competent authorities of the Member States where the suspected activity has occurred.’;
(27)
Article 32 is amended as follows:
(a)
the title is replaced by the following:
‘Assessment of market developments, including stress tests’;
(b)
paragraph 1 is replaced by the following:
‘1. The Authority shall monitor and assess market developments in the area of its competence and, where necessary, inform the European Supervisory Authority (European Banking Authority), and the European Supervisory Authority (European Insurance and Occupational Pensions Authority), the ESRB, and 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 analysis of the markets in which financial market participants operate and an assessment of the impact of potential market developments on such financial market participants.’;
(c)
paragraph 2 is amended as follows:
(i)
the introductory part is replaced by the following:
‘2. The Authority shall initiate and coordinate Union-wide assessments of the resilience of financial market participants to adverse market developments. To that end, it shall develop:’;
(ii)
point (a) is replaced by the following:
‘(a)
common methodologies for assessing the effect of economic scenarios on the financial position of a financial market participant, taking into account inter alia risks stemming from adverse environmental developments;’;
(iii)
the following point is inserted:
‘(aa)
common methodologies for identifying financial market participants to be included in Union-wide assessments;’;
(iv)
the following point is added:
‘(d)
common methodologies for assessing the effect of environmental risks on the financial stability of financial market participants.’;
(v)
the following subparagraph is added:
‘For the purposes of this paragraph, the Authority shall cooperate with the ESRB.’;
(d)
in paragraph 3, the first subparagraph is replaced by the following:
‘3. Without prejudice to the tasks of the ESRB set out in Regulation (EU) No 1092/2010, the Authority shall, once a year, and more frequently where necessary, provide assessments to the European Parliament, to the Council, to the Commission and to the ESRB of trends, potential risks and vulnerabilities in its area of competence, in combination with the indicators referred to in Article 22(2) of this Regulation.’;
(28)
Article 33 is replaced by the following:
‘Article 33
International relations including equivalence
1. Without prejudice to the respective competences of the Member States and the Union institutions, the Authority may develop contacts and enter into administrative arrangements with regulatory and supervisory authorities, international organisations and third-country administrations. Those arrangements shall not create legal obligations in respect of the Union and its Member States nor shall they prevent Member States and their competent authorities from concluding bilateral or multilateral arrangements with those third countries.
Where a third country, in accordance with a delegated act, which is in force, adopted by the Commission pursuant to Article 9 of Directive (EU) 2015/849, is on the list of jurisdictions which have strategic deficiencies in their national anti-money laundering and countering the financing of terrorism regimes that pose significant threats to the financial system of the Union, the Authority shall not conclude administrative arrangements with the regulatory and supervisory authorities of that third country. This shall not preclude other forms of cooperation between the Authority and the respective third-country authorities with a view to reduce threats to the financial system of the Union.
2. The Authority shall assist the Commission in preparing equivalence decisions pertaining to regulatory and supervisory regimes in third countries following a specific request for advice from the Commission or where required to do so by the legislative acts referred to in Article 1(2).
3. The Authority shall monitor, with a particular focus on their implications for financial stability, market integrity, investor protection and the functioning of the internal market, relevant regulatory and supervisory developments and enforcement practices and market developments in third countries, to the extent they are relevant to risk-based equivalence assessments, for which equivalence decisions have been adopted by the Commission pursuant to the legislative acts referred to in Article 1(2).
Furthermore, it shall verify whether the criteria, on the basis of which those equivalence decisions have been taken, and any conditions set out therein, are still fulfilled.
The Authority may liaise with relevant authorities in third countries. The Authority shall submit a confidential report to the European Parliament, to the Council, to the Commission and to the European Supervisory Authority (European Banking Authority) and to the European Supervisory Authority (European Insurance and Occupational Pensions Authority) summarising the findings of its monitoring of all equivalent third countries. The report shall focus in particular on implications for financial stability, market integrity, investor protection or the functioning of the internal market.
Where the Authority identifies relevant developments in relation to the regulation and supervision or the enforcement practices in the third countries referred to in this paragraph that may affect the financial stability of the Union or of one or more of its Member States, market integrity, investor protection or the functioning of the internal market, it shall inform the European Parliament, the Council and the Commission on a confidential basis and without undue delay.
4. Without prejudice to specific requirements set out in the legislative acts referred to in Article 1(2) and subject to the conditions set out in the second sentence of paragraph 1 of this Article, the Authority shall cooperate where possible with the relevant competent authorities, of third countries whose regulatory and supervisory regimes have been recognised as equivalent. In principle, that cooperation shall be pursued on the basis of administrative arrangements concluded with the relevant authorities of those third countries. When negotiating such administrative arrangements, the Authority shall include provisions on the following:
(a)
the mechanisms which allow the Authority to obtain relevant information, including information on the regulatory regime, the supervisory approach, relevant market developments and any changes that may affect the equivalence decision;
(b)
to the extent necessary for the follow-up of such equivalence decisions, the procedures concerning the coordination of supervisory activities including, where necessary, on-site inspections
The Authority shall inform the Commission where a third-country competent authority refuses to conclude such administrative arrangements or when it refuses to effectively cooperate.
5. The Authority may develop model administrative arrangements, with a view to establishing consistent, efficient and effective supervisory practices within the Union and to strengthening international supervisory coordination. The competent authorities shall make every effort to follow such model arrangements.
In the report referred to in Article 43(5), the Authority shall include information on the administrative arrangements agreed upon with supervisory authorities, international organisations or administrations in third countries, the assistance provided by the Authority to the Commission in preparing equivalence decisions and the monitoring by the Authority in accordance with paragraph 3 of this Article.
6. The Authority shall, within its powers pursuant to this Regulation and to the legislative acts referred to in Article 1(2), contribute to the united, common, consistent and effective representation of the Union’s interests in international fora.’;
(29)
Article 34 is deleted;
(30)
Article 36 is amended as follows:
(a)
paragraph 3 is deleted;
(b)
paragraphs 4 and 5 are replaced by the following:
‘4. On receipt of a warning or recommendation from the ESRB addressed to the Authority, the Authority shall discuss that warning or recommendation at the next meeting of the Board of Supervisors or, where appropriate, earlier, in order to assess the implications of, and possible follow-up to, such a warning or recommendation for the fulfilment of its tasks.
It shall decide, by the relevant decision-making procedure, on any actions to be taken in accordance with the powers conferred upon it by this Regulation for addressing the issues identified in the warnings and recommendations.
If the Authority does not act on a warning or recommendation, it shall explain to the ESRB its reasons for not doing so. The ESRB shall inform the European Parliament thereof in accordance with Article 19(5) of Regulation (EU) No 1092/2010. The ESRB shall also inform the Council thereof.
5. On receipt of a warning or recommendation from the ESRB addressed to a competent authority, the Authority shall, where relevant, use the powers conferred upon it by this Regulation to ensure a timely follow-up.
Where the addressee intends not to follow the recommendation of the ESRB, it shall inform and discuss with the Board of Supervisors its reasons for not acting.
Where the competent authority, in accordance with Article 17(1) of Regulation (EU) No 1092/2010, informs the European Parliament, the Council, the Commission and the ESRB of the actions it has undertaken in response to a recommendation of the ESRB, it shall take due account of the views of the Board of Supervisors.’;
(c)
paragraph 6 is deleted;
(31)
Article 37 is amended as follows:
(a)
paragraphs 2 and 3 are replaced by the following:
‘2. The Securities and Markets Stakeholder Group shall be composed of 30 members. Those members shall comprise of:
(a)
13 members representing, in balanced proportions, financial market participants operating in the Union;
(b)
13 members representing employees’ representatives of financial market participants operating in the Union, consumers, users of financial services and representatives of SMEs; and
(c)
four members who are independent top-ranking academics.
3. The members of the Securities and Markets Stakeholder Group shall be appointed by the Board of Supervisors, following an open and transparent selection procedure. In making its decision, the Board of Supervisors shall, to the extent possible, ensure an appropriate reflection of diversity of the securities and markets sector, geographical and gender balance and representation of stakeholders across the Union. Members of the Securities and Markets Stakeholder Group shall be selected according to their qualifications, skills, relevant knowledge and proven expertise.’;
(b)
the following paragraph is inserted:
‘3a. Members of the Securities and Markets Stakeholder Group shall elect a Chair from among its members. The position of Chair shall be held for a period of two years.
The European Parliament may invite the Chair of the Securities and Markets Stakeholder Group to make a statement before it and answer any questions from its members whenever so requested.’;
(c)
in paragraph 4, the first subparagraph is replaced by the following:
‘4. The Authority shall provide all necessary information, subject to professional secrecy, as set out in Article 70 of this Regulation, and ensure adequate secretarial support for the Securities and Markets Stakeholder Group. Adequate compensation shall be provided to members of the Securities and Markets Stakeholder Group representing non-profit organisations, excluding industry representatives. This compensation shall take into account the members’ preparatory and follow-up work and shall be at least equivalent to the reimbursement rates of officials pursuant to Title V, Chapter 1, Section 2 of the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union, laid down in Council Regulation (EEC, Euratom, ECSC) No 259/68 (*46) (the Staff Regulations). The Securities and Markets Stakeholder Group may establish working groups on technical issues. Members of the Securities and Markets Stakeholder Group shall serve for a period of four years, following which a new selection procedure shall take place.
(*46)
OJ L 56, 4.3.1968, p. 1.’;"
(d)
paragraph 5 is replaced by the following:
‘5. The Securities and Markets Stakeholder Group may submit advice to the Authority on any issue related to the tasks of the Authority with particular focus on the tasks set out in Articles 10 to 16, 29, 30 and 32.
Where members of the Securities and Markets Stakeholder Group cannot agree on advice, one third of its members or the members representing one group of stakeholders shall be permitted to issue separate advice.
The Securities and Markets Stakeholder Group, the Banking Stakeholder Group, the Insurance and Reinsurance Stakeholder Group, and the Occupational Pensions Stakeholder Group may issue a joint advice on issues related to the work of the ESAs under Article 56 on joint positions and common acts.’;
(e)
paragraph 7 is replaced by the following:
‘7. The Authority shall make public the advice of the Securities and Markets Stakeholder Group, the separate advice of its members, and the results of its consultations as well as information on how advice and results of consultations have been taken into account.’;
(32)
Article 39 is replaced by the following:
‘Article 39
Decision-making procedures
1. The Authority shall act in accordance with paragraphs 2 to 6 of this Article when adopting decisions pursuant to Articles 17, 18 and 19.
2. The Authority shall inform any addressee of a decision of its intention to adopt the decision, in the official language of the addressee, setting a time limit within which the addressee may express its views on the subject-matter of the decision, taking full account of the urgency, complexity and potential consequences of the matter. The addressee may express its views in its official language. The provision laid down in the first sentence shall apply mutatis mutandis to recommendations as referred to in Article 17(3).
3. The decisions of the Authority shall state the reasons on which they are based.
4. The addressees of decisions of the Authority shall be informed of the legal remedies available under this Regulation.
5. Where the Authority has taken a decision pursuant to Article 18(3) or 18(4), it shall review that decision at appropriate intervals.
6. The decisions which the Authority takes pursuant to Article 17, 18 or 19 shall be made public. The publication shall disclose the identity of the competent authority or financial market participant concerned and the main content of the decision, unless such publication is in conflict with the legitimate interest of those financial market participants, or with 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 Union.’;
(33)
Article 40 is amended as follows
(a)
in paragraph 1, point (a) is replaced by the following:
‘(a)
the Chairperson;’;
(b)
the following paragraph is added:
‘7. Where the national public authority referred to in point (b) of paragraph 1 is not responsible for the enforcement of consumer protection rules, the member of the Board of Supervisors referred to in that point may decide to invite a representative from the Member State’s consumer protection authority, who shall be non-voting. In the case where the responsibility for consumer protection is shared by several authorities in a Member State, those authorities shall agree on a common representative.’;
(34)
Articles 41 and 42 are replaced by the following:
‘Article 41
Internal committees
1. The Board of Supervisors on its own initiative or at the request of the Chairperson may establish internal committees for specific tasks attributed to it. Upon request from the Management Board or from the Chairperson, the Board of Supervisors may establish internal committees for specific tasks attributed to the Management Board. The Board of Supervisors may provide for the delegation of certain clearly defined tasks and decisions to internal committees, to the Management Board or to the Chairperson.
2. For the purposes of Article 17, the Chairperson shall propose a decision to convene an independent panel, to be adopted by the Board of Supervisors. The independent panel shall consist of the Chairperson and six other members, to be proposed by the Chairperson after consulting the Management Board and following an open call for participation. The six other members shall not be representatives of the competent authority alleged to have breached Union law and shall not have any interest in the matter or direct links to the competent authority concerned.
Each member of the panel shall have one vote.
Decisions of the panel shall be taken where at least four members vote in favour.
3. For the purposes of Article 19 the Chairperson shall propose a decision to convene an independent panel, to be adopted by the Board of Supervisors. The independent panel shall consist of the Chairperson and six other members, to be proposed by the Chairperson after consulting the Management Board and following an open call for participation. The six other members shall not be representatives of the competent authorities party to the disagreement and shall not have any interest in the conflict or direct links to the competent authorities concerned.
Each member of the panel shall have one vote.
Decisions of the panel shall be taken where at least four members vote in favour.
4. For the purposes of conducting the inquiry provided for in the first subparagraph of Article 22(4), the Chairperson may propose a decision to launch the inquiry and a decision to convene an independent panel, to be adopted by the Board of Supervisor. The independent panel shall consist of the Chairperson and six other members, to be proposed by the Chairperson after consulting the Management Board and following an open call for participation.
Each member of the panel shall have one vote.
Decisions of the panel shall be taken where at least four members vote in favour.
5. The panels referred to in paragraphs 2 and 3 of this Article or the Chairperson shall propose decisions under Article 17, or Article 19, for final adoption by the Board of Supervisors. A panel referred to in paragraph 4 of this Article shall present the outcome of the inquiry conducted pursuant to the first subparagraph of Article 22(4) to the Board of Supervisors.
6. The Board of Supervisors shall adopt rules of procedure for the panels referred to in this Article.
Article 42
Independence of the Board of Supervisors
1. When carrying out the tasks conferred upon them by this Regulation, the members of the Board of Supervisors shall act independently and objectively in the sole interest of the Union as a whole and shall neither seek nor take instructions from Union institutions or bodies, from any government or from any other public or private body.
2. Member States, Union institutions or bodies 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.
3. Members of the Board of Supervisors, the Chairperson as well as non-voting representatives and observers participating in the meetings of the Board of Supervisors shall, before such meetings, accurately and completely declare the absence or existence of any interest which might be considered prejudicial to their independence in relation to any items on the agenda, and shall abstain from participating in the discussion of, and voting upon, such points.
4. The Board of Supervisors shall lay down, in its rules of procedure, the practical arrangements for the rule on declaration of interest referred to in paragraph 3 and for the prevention and the management of conflict of interest.’;
(35)
Article 43 is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. The Board of Supervisors shall give guidance to the work of the Authority and shall be in charge of taking the decisions referred to in Chapter II. The Board of Supervisors shall adopt the opinions, recommendations, guidelines and decisions of the Authority, and issue the advice referred to in Chapter II, based on a proposal of the relevant internal committee or panel, the Chairperson, or of the Management Board, as applicable.’;
(b)
paragraphs 2 and 3 are deleted;
(c)
paragraph 5 is replaced by the following
‘5. The Board of Supervisors shall adopt, on the basis of a proposal by the Management Board, the annual report on the activities of the Authority, including on the performance of the Chairperson’s duties, and shall transmit that report to the European Parliament, to the Council, to the Commission, to the Court of Auditors and to the European Economic and Social Committee by 15 June each year. The report shall be made public.’;
(d)
paragraph 8 is replaced by the following:
‘8. The Board of Supervisors shall exercise disciplinary authority over the Chairperson and the Executive Director. It may remove the Executive Director from office in accordance with Article 51(5).’;
(36)
the following article is inserted:
‘Article 43a
Transparency of decisions adopted by the Board of Supervisors
Notwithstanding Article 70, within six weeks of each meeting of the Board of Supervisors, the Authority shall, at least, provide the European Parliament with a comprehensive and meaningful record of the proceedings of that meeting that enables a full understanding of the discussions, including an annotated list of decisions. Such record shall not reflect discussions within the Board of Supervisors relating to individual financial market participants, unless otherwise provided for in Article 75(3) or in the legislative acts referred to in Article 1(2).’;
(37)
Article 44 is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. Decisions of the Board of Supervisors shall be taken by a simple majority of its members. Each voting member shall have one vote.
With regard to the acts specified in Articles 10 to 16 of this Regulation and measures and decisions adopted under the third subparagraph of Article 9(5) of this Regulation, and Chapter VI of this Regulation and, by way of derogation from the first subparagraph of this paragraph, the Board of Supervisors shall take decisions on the basis of a qualified majority of its members, as defined in Article 16(4) TEU and in Article 3 of the Protocol No 36 on transitional provisions
The Chairperson shall not vote on the decisions referred to in the second subparagraph.
With regard to the composition of the panels in accordance with Article 41(2), (3) and (4), and the members of the peer review committee referred to in Article 30(2), the Board of Supervisors, when considering the proposals by the Chairperson, shall strive for consensus. In the absence of consensus, decisions of the Board of Supervisors shall be taken by a majority of three quarters of its voting members. Each voting member shall have one vote.
With regard to decisions adopted under Article 18(3) and (4), and by way of derogation from the first subparagraph of this paragraph, the Board of Supervisors shall take decisions on the basis of a simple majority of its voting members.’;
(b)
paragraph 4 is replaced by the following:
‘4. With regard to the decisions in accordance with Articles 17, 19 and 30, the Board of Supervisors shall vote on the proposed decisions using a written procedure. The voting members of the Board of Supervisors shall have eight working days to vote. Each voting member shall have one vote. The proposed decision shall be considered adopted unless a simple majority of voting members of the Board of Supervisors objects. Abstentions shall not be counted as approvals or as objections, and shall not be considered when calculating the number of votes cast. If three voting members of the Board of Supervisors object to the written procedure, the draft decision shall be discussed and decided on by the Board of Supervisors in accordance with the procedure set out in paragraph 1 of this Article.
The non-voting members and the observers, with the exception of 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 75(3) or in the legislative acts referred to in Article 1(2).’;
(c)
the following paragraph is added:
‘5. The Authority’s Chairperson shall have the prerogative to call a vote at any time. Without prejudice to that power and to the effectiveness of the Authority’s decision-making procedures, the Board of Supervisors of the Authority shall strive for consensus when taking its decisions.’;
(38)
Article 45 is replaced by the following:
‘Article 45
Composition
1. The Management Board shall be composed of the Chairperson and six members of the Board of Supervisors, elected by and from the voting members of the Board of Supervisors.
Other than the Chairperson, each member of the Management Board shall have an alternate, who may replace him or her if he or she is prevented from attending.
2. The term of office of the members elected by the Board of Supervisors shall be two-and-a-half years. That term may be extended once. The composition of the Management Board shall be gender balanced and proportionate and shall reflect the Union as a whole. Mandates shall be overlapping and an appropriate rotating arrangement shall apply
3. Meetings of the Management Board shall be convened by the Chairperson at his or her own initiative or at the request of at least a third of its members, and shall be chaired by the Chairperson. The Management Board shall meet prior to every meeting of the Board of Supervisors and as often as the Management Board deems necessary. It shall meet at least five times a year.
4. The members of the Management Board may, subject to the rules of procedure, be assisted by advisers or experts. The non-voting members, with the exception of the Executive Director, shall not attend any discussions within the Management Board relating to individual financial market participants.’;
(39)
the following articles are inserted:
‘Article 45a
Decision-making
1. Decisions by the Management Board shall be adopted by simple majority of its members whilst striving for consensus. Each member shall have one vote. The Chairperson shall be a voting member.
2. The Executive Director and a representative of the Commission shall participate in meetings of the Management Board without the right to vote. The representative of the Commission shall have the right to vote on matters referred to in Article 63.
3. The Management Board shall adopt and make public its rules of procedure.
Article 45b
Coordination Groups
1. The Management Board may set up coordination groups on its own initiative or upon the request of a competent authority on defined topics for which there may be a need to coordinate having regard to specific market developments. The Management Board shall set up coordination groups on defined topics at the request of five members of the Board of Supervisors.
2. All competent authorities shall participate in the coordination groups and shall provide, in accordance with Article 35, to the coordination groups the information necessary in order to allow the coordination groups to conduct their coordinating tasks in accordance with their mandate. The work of the coordination groups shall be based on information provided by the competent authorities and any findings identified by the Authority.
3. The groups shall be chaired by a member of the Management Board. Each year, the respective member of the Management Board in charge of the coordination group shall report to the Board of Supervisors on the main elements of the discussions and findings and, where relevant, make a suggestion for a regulatory follow-up or a peer review in the respective area. Competent authorities shall notify the Authority as to how they have taken into account the work of coordination groups in their activities.
4. When monitoring market developments that may be the focus of coordination groups, the Authority may request competent authorities in accordance with Article 35 to provide information necessary to allow the Authority to perform its monitoring role.’;
(40)
Article 46 is replaced by the following:
‘Article 46
Independence of the Management Board
The members of the Management Board shall act independently and objectively in the sole interest of the Union as a whole and shall neither seek nor take instructions from the Union institutions or bodies, from any government or from any other public or private body.
Member States, Union institutions or bodies and any other public or private body shall not seek to influence the members of the Management Board in the performance of their tasks.’;
(41)
Article 47 is amended as follows:
(a)
the following paragraph is inserted:
‘3a. The Management Board may examine, give an opinion on, and make proposals on all matters to be decided by the Board of Supervisors after discussion at the relevant internal committee, save for peer reviews according to Article 30.’;
(b)
paragraph 6 is replaced by the following:
‘6. The Management Board shall propose an annual report on the activities of the Authority, including on the Chairperson’s duties, to the Board of Supervisors for approval.’;
(c)
paragraph 8 is replaced by the following:
‘8. The Management Board shall appoint and remove the members of the Board of Appeal in accordance with Article 58(3) and (5), taking duly into account a proposal by the Board of Supervisors.’;
(d)
the following paragraph is added:
‘9. The members of the Management Board shall make public all meetings held and any hospitality received. Expenses shall be recorded publicly in accordance with the Staff Regulations.’;
(42)
Article 48 is amended as follows:
(a)
in paragraph 1, the second subparagraph is replaced by the following:
‘The Chairperson shall be responsible for preparing the work of the Board of Supervisors, including setting the agenda to be adopted by the Board of Supervisors, convening the meetings and tabling items for decision, and shall chair the meetings of the Board of Supervisors.
The Chairperson shall be responsible for setting the agenda of the Management Board, to be adopted by the Management Board, and shall chair the meetings of the Management Board.
The Chairperson may invite the Management Board to consider setting up a coordination group in accordance with Article 45b.’;
(b)
paragraph 2 is replaced by the following:
‘2. The Chairperson shall be selected on the basis of merit, skills, knowledge of financial market participants and of markets, and of experience relevant to financial supervision and regulation, following an open selection procedure which shall respect the principle of gender balance and shall be published in the Official Journal of the European Union. The Board of Supervisors shall draw up a shortlist of qualified candidates for the position of the Chairperson, with the assistance of the Commission. Based on the shortlist the Council shall adopt a decision to appoint the Chairperson, after confirmation by the European Parliament.
Where the Chairperson no longer fulfils the conditions referred to in Article 49 or has been found guilty of serious misconduct, the Council may, acting on a proposal from the Commission which has been approved by the European Parliament, adopt a decision to remove him or her from office.
The Board of Supervisors shall also elect, from among its members, a Vice-Chairperson who shall carry out the functions of the Chairperson in the absence of the Chairperson. That Vice-Chairperson shall not be elected from among the members of the Management Board.’;
(c)
in paragraph 4, the second subparagraph is replaced by the following:
‘For the purpose of the evaluation referred to in the first subparagraph, the tasks of the Chairperson shall be carried out by the Vice-Chairperson.
The Council, acting on a proposal from the Board of Supervisors and with the assistance of the Commission, and taking into account the evaluation referred to in the first subparagraph, may extend the term of office of the Chairperson once.’;
(d)
paragraph 5 is replaced by the following:
‘5. The Chairperson may be removed from office only on serious grounds. He or she may only be removed by the European Parliament following a decision of the Council, adopted after consulting the Board of Supervisors.’;
(43)
Article 49 is amended as follows:
(a)
the title is replaced by the following:
‘Independence of the Chairperson’;
(b)
the first paragraph is replaced by the following:
‘Without prejudice to the role of the Board of Supervisors in relation to the tasks of the Chairperson, the Chairperson shall neither seek nor take instructions from the Union institutions or bodies, from any government or from any other public or private body.’;
(44)
the following article is inserted:
‘Article 49a
Expenses
The Chairperson shall make public all meetings held with external stakeholders within a period of two weeks following the meeting and any hospitality received. Expenses shall be recorded publicly in accordance with the Staff Regulations.’;
(45)
Article 50 is deleted;
(46)
Article 54 is amended as follows:
(a)
paragraph 2 is amended as follows:
(i)
the introductory part is replaced by the following:
‘2. The Joint Committee shall serve as a forum in which the Authority shall cooperate regularly and closely to ensure cross-sectoral consistency, while considering sectoral specificities, with the European Supervisory Authority (European Banking Authority) and the European Supervisory Authority (European Insurance and Occupational Pensions Authority), in particular regarding:’;
(ii)
the first indent is replaced by the following:
‘—
financial conglomerates and, where required by Union law, prudential consolidation,’;
(iii)
the fifth indent is replaced by the following:
‘—
cybersecurity,’;
(iv)
the sixth indent is replaced by the following:
‘—
information and best practice exchange with the ESRB and the other ESAs,’;
(v)
the following indents are added:
‘—
retail financial services and consumer and investor protection issues;
—
advice by the Committee established in accordance with Article 1(6).’;
(b)
the following paragraph is inserted:
‘2a. The Joint Committee may assist the Commission in assessing the conditions and the technical specifications and procedures for ensuring secure and efficient inter-connection of the centralised automated mechanisms pursuant to the report referred in Article 32a(5) of Directive (EU) 2015/849 as well as in the effective interconnection of the national registers under that Directive.’;
(c)
paragraph 3 is replaced by the following:
‘3. The Joint Committee shall have a dedicated staff provided by the ESAs that shall act as a permanent secretariat. The Authority shall contribute adequate resources to administrative, infrastructure and operational expenses.’;
(47)
Article 55 is amended as follows:
(a)
paragraph 3 is replaced by the following:
‘3. The Chairperson of the Joint Committee shall be appointed on an annual rotational basis from among the Chairpersons of the ESAs. The Chairperson of the Joint Committee shall be the second Vice-Chair of the ESRB.’;
(b)
in paragraph 4, the second subparagraph is replaced by the following:
‘The Joint Committee shall meet at least once every three months.’;
(c)
the following paragraph is added:
‘5. The Chairperson of the Authority shall regularly inform the Board of Supervisors on positions taken in the meetings of the Joint Committee.’;
(48)
Articles 56 and 57 are replaced by the following:
‘Article 56
Joint positions and common acts
Within the scope of its tasks set out in Chapter II of this Regulation, and, in particular with respect to the implementation of Directive 2002/87/EC, where relevant, the Authority shall reach joint positions by consensus with, as appropriate, the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and with the European Supervisory Authority (European Banking Authority).
Where required by Union law, measures pursuant to Articles 10 to 16, and decisions pursuant to Articles 17, 18 and 19, of this Regulation in relation to the application of Directive 2002/87/EC and of any other legislative acts referred to in Article 1(2) of this Regulation that also fall within the area of competence of the European Supervisory Authority (European Banking Authority) or the European Supervisory Authority (European Insurance and Occupational Pensions Authority) shall be adopted, in parallel, by, as appropriate, the Authority, the European Supervisory Authority (European Banking Authority) and the European Supervisory Authority (European Insurance and Occupational Pensions Authority),.
Article 57
Sub-Committees
1. The Joint Committee may establish sub-committees for the purposes of preparing draft joint positions and common acts for the Joint Committee.
2. Each sub-committee shall be composed of the individuals referred to in Article 55(1), and one high-level representative from the current staff of the relevant competent authority from each Member State.
3. Each sub-committee shall elect a chairperson from among the representatives of the relevant competent authorities, who shall also be an observer in the Joint Committee.
4. For the purposes of Article 56, a sub-committee on financial conglomerates to the Joint Committee shall be established.
5. The Joint Committee shall make public on its website all established sub-committees including their mandates and a list of their members with their respective functions in the sub-committee.’;
(49)
Article 58 is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. The Board of Appeal of the European Supervisory Authorities is hereby established.’;
(b)
in paragraph 2, the first subparagraph is replaced by the following:
‘2. The Board of Appeal shall be composed of six members and six alternates, who shall be individuals of high repute with a proven record of relevant knowledge of Union law and of having international professional experience, to a sufficiently high level in the fields of banking, insurance, occupational pensions, securities markets or other financial services, excluding current staff of the competent authorities or other national or Union institutions or bodies involved in the activities of the Authority and members of the Securities and Markets Stakeholder Group. Members and alternates shall be nationals of a Member State and shall have a thorough knowledge of at least two official languages of the Union. The Board of Appeal shall have sufficient legal expertise to provide expert legal advice on the legality, including proportionality, of the Authority’s exercise of its powers.’;
(c)
paragraph 3 is replaced by the following:
‘3. Two members of the Board of Appeal and two alternates shall be appointed by the Management Board of the Authority from a shortlist proposed by the Commission, following a public call for expressions of interest published in the Official Journal of the European Union, and after consultation of the Board of Supervisors.
After having received the shortlist, the European Parliament may invite candidates for members and alternates to make a statement before it and answer any questions from its Members.
The European Parliament may invite the members of the Board of Appeal to make a statement before it and answer any questions from its Members whenever so requested, to the exclusion of statements, questions or answers pertaining to individual cases decided by, or pending before, the Board of Appeal.’;
(50)
in Article 59, paragraph 2 is replaced by the following:
‘2. Members of the Board of Appeal, and staff of the Authority providing operational and secretariat support, shall not take part in any appeal proceedings in which they have any personal interest, 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.’;
(51)
in Article 60, paragraph 2 is replaced by the following:
‘2. The appeal, together with a statement of grounds, shall be filed in writing at the Authority within three months of the date of notification of the decision to the person concerned, or, in the absence of a notification, of the day on which the Authority published its decision.
The Board of Appeal shall decide upon the appeal within three months after the appeal has been lodged.’;
(52)
the following article is inserted:
‘Article 60a
Exceeding of competence by the Authority
Any natural or legal person may send reasoned advice to the Commission if that person is of the opinion that the Authority has exceeded its competence, including by failing to respect the principle of proportionality referred to in Article 1(5), when acting under Articles 16 and 16b, and that is of direct and individual concern to that person.’;
(53)
in Article 62, paragraph 1 is amended as follows:
(a)
the introductory part is replaced by the following:
‘1. The revenues of the Authority, a European body in accordance with Article 70 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (*47) (“the Financial Regulation”), shall consist, in particular, of any combination of the following:
(*47) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).’;"
(b)
the following points are added:
‘(d)
any voluntary contribution from Member States or observers;
(e)
agreed charges for publications, training and for any other services provided by the Authority where they have been specifically requested by one or more competent authorities.’;
(c)
the following sub-paragraph is added:
‘Any voluntary contribution from Member States or observers referred to in point d of the first sub-paragraph shall not be accepted if such acceptance would cast doubt on the independence and impartiality of the Authority. Voluntary contributions that constitute compensation for the cost of tasks delegated by a competent authority to the Authority shall not be considered to cast doubt on the independence of the latter.’;
(54)
Articles 63, 64 and 65 are replaced by the following:
‘Article 63
Establishment of the budget
1. Each year, the Executive Director shall draw up a provisional draft single programming document of the Authority for the three following financial years setting out the estimated revenue and expenditure, as well as information on staff, from its annual and multi-annual programming and shall forward it to the Management Board and the Board of Supervisors, together with the establishment plan.
2. The Board of Supervisors shall, on the basis of the draft which has been approved by the Management Board, adopt the draft single programming document for the three following financial years.
3. The single programming document shall be transmitted by the Management Board to the Commission, the European Parliament and the Council and to the European Court of Auditors by 31 January.
4. Taking account of the single programming document, the Commission shall enter in the draft budget of the Union the estimates it deems necessary in respect of the establishment plan and the amount of the balancing contribution to be charged to the general budget of the Union in accordance with Articles 313 and 314 TFEU.
5. The European Parliament and the Council shall adopt the establishment plan for the Authority. The European Parliament and the Council shall authorise the appropriations for the balancing contribution to the Authority.
6. The budget of the Authority shall be adopted by the Board of Supervisors. It shall become final after the final adoption of the general budget of the Union. Where necessary, it shall be adjusted accordingly.
7. The Management Board shall, without undue delay, notify the European Parliament and the Council of its intention to implement any project which may have significant financial implications for the funding of its budget, in particular any project relating to property, such as the rental or purchase of buildings.
8. Without prejudice to Articles 266 and 267 of the Financial Regulation, authorisation from the European Parliament and the Council shall be required for any project which may have significant financial or long- term implications for the funding of the Authority’s budget, in particular any project relating to property, such as the rental or purchase of buildings, including break clauses.
Article 64
Implementation and control of the budget
1. The Executive Director shall act as authorising officer and shall implement the Authority’s annual budget.
2. The Authority’s accounting officer shall send the provisional accounts to the Commission’s accounting officer and to the Court of Auditors by 1 March of the following year. Article 70 shall not preclude the Authority from providing to the Court of Auditors any information requested by the Court that is within its competence.
3. The Authority’s accounting officer shall send, by 1 March of the following year, the required accounting information for consolidation purposes to the accounting officer of the Commission, in the manner and format laid down by that accounting officer.
4. The Authority’s accounting officer shall also send, by 31 March of the following year, the report on budgetary and financial management to the members of the Board of Supervisors, to the European Parliament, to the Council and to the Court of Auditors.
5. After receiving the observations of the Court of Auditors on the provisional accounts of the Authority in accordance with Article 246 of the Financial Regulation, the Authority’s accounting officer shall draw up the Authority’s final accounts. The Executive Director shall send them to the Board of Supervisors, which shall deliver an opinion on those accounts.
6. The Authority’s accounting officer shall, by 1 July of the following year, send the final accounts, accompanied by the opinion of the Board of Supervisors, to the accounting officer of the Commission, the European Parliament, the Council and the Court of Auditors.
The Authority’s accounting officer shall also send, by 15 June each year, a reporting package to the Commission’s accounting officer, in a standardised format as laid down by the Commission’s accounting officer for consolidation purposes.
7. The final accounts shall be published in the Official Journal of the European Union by 15 November of the following year.
8. The Executive Director shall send the Court of Auditors a reply to the latter’s observations by 30 September and shall also send a copy of that reply to the Management Board and to the Commission.
9. The Executive Director shall submit to the European Parliament, at the latter’s request and as provided for in Article 261(3) of the Financial Regulation, any information necessary for the smooth application of the discharge procedure for the financial year in question.
10. 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.
11. The Authority shall provide a reasoned opinion on the position of the European Parliament and on any other observations made by the European Parliament provided in the discharge procedure.
Article 65
Financial rules
The financial rules applicable to the Authority shall be adopted by the Management Board after consulting the Commission. Those rules may not depart from Commission Delegated Regulation (EU) 2019/715 (*48) unless the specific operational needs for the functioning of the Authority so require and only with the prior agreement of the Commission.
(*48) Commission Delegated Regulation (EU) 2019/715 of 18 December 2018 on the framework financial regulation for the bodies set up under the TFEU and Euratom Treaty and referred to in Article 70 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (OJ L 122, 10.5.2019, p. 1).’;"
(55)
in Article 66, paragraph 1 is replaced by the following:
‘1. For the purposes of combating fraud, corruption and any other illegal activity, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (*49) shall apply to the Authority without any restriction.
(*49) Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1).’;"
(56)
Article 70 is amended as follows:
(a)
paragraph 1 is replaced by the following:
‘1. Members of the Board of Supervisors, and all members of the staff of the Authority, including officials seconded by Member States on a temporary basis, and all other persons carrying out tasks for the Authority on a contractual basis, shall be subject to the requirements of professional secrecy pursuant to Article 339 TFEU and the relevant provisions in Union legislation, even after their duties have ceased.’;
(b)
in paragraph 2, the second subparagraph is replaced by the following:
‘The obligation under paragraph 1 of this Article and the first subparagraph of this paragraph shall not prevent the Authority and the competent authorities from using the information for the enforcement of the legislative acts referred to in Article 1(2), and in particular for legal procedures for the adoption of decisions.’;
(c)
the following paragraph is inserted:
‘2a. The Management Board and the Board of Supervisors shall ensure that individuals who provide any service, directly or indirectly, permanently or occasionally, relating to the tasks of the Authority, including officials and other persons authorised by the Management Board and the Board of Supervisors or appointed by the competent authorities for that purpose, are subject to the requirements of professional secrecy equivalent to those in paragraphs 1 and 2.
The same requirements for professional secrecy shall also apply to observers who attend the meetings of the Management Board, and the Board of Supervisors and who take part in the activities of the Authority.’;
(d)
paragraphs 3 and 4 are replaced by the following:
‘3. Paragraphs 1 and 2 shall not prevent the Authority from exchanging information with competent authorities in accordance with this Regulation and with other Union legislation applicable to financial market participants.
That information shall be subject to the conditions of professional secrecy referred to in paragraphs 1 and 2. The Authority shall lay down in its internal rules of procedure the practical arrangements for implementing the confidentiality rules referred to in paragraphs 1 and 2.
4. The Authority shall apply Commission Decision (EU, Euratom) 2015/444 (*50).
(*50) Commission Decision (EU, Euratom) 2015/444 of 13 March 2015 on the security rules for protecting EU classified information (OJ L 72, 17.3.2015, p. 53).’;"
(57)
Article 71 is replaced by the following:
‘Article 71
Data protection
This Regulation shall be without prejudice to the obligations of Member States relating to their processing of personal data under Regulation (EU) 2016/679 or the obligations of the Authority relating to its processing of personal data under Regulation (EU) 2018/1725 of the European Parliament and of the Council (*51) when fulfilling its responsibilities.
(*51) Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39).’;"
(58)
in Article 72, paragraph 2 is replaced by the following:
‘2. The Management Board shall adopt practical measures for applying Regulation (EC) No 1049/2001.’;
(59)
in Article 74, the first paragraph is replaced by the following:
‘The necessary arrangements concerning the accommodation to be provided for the Authority in the Member State where its seat is located and the facilities to be made available by that Member State, as well as the specific rules applicable in that Member State to the staff of the Authority and members of their families, shall be laid down in a Headquarters Agreement between the Authority and that Member State which they concluded after obtaining the approval of the Management Board.’;
(60)
Article 76 is replaced by the following:
‘Article 76
Relationship with the Committee of European Securities Regulators
The Authority shall be considered the legal successor of the Committee of European Securities Regulators (CESR). By the date of establishment of the Authority, all assets and liabilities and all pending operations of CESR shall be automatically transferred to the Authority. CESR shall establish a statement showing its closing asset and liability situation as of the date of that transfer. That statement shall be audited and approved by CESR and by the Commission.’;
(61)
Article 81 is amended as follows:
(a)
paragraph 1 is amended as follows:
(i)
the introductory sentence is replaced by the following:
‘1. By 31 December 2021, and every three years thereafter, the Commission shall publish a general report on the experience acquired as a result of the operation of the Authority and the procedures laid down in this Regulation. That report shall evaluate, inter alia:’;
(ii)
in point (a), the introductory sentence, and point (i)are replaced by the following:
‘(a)
the effectiveness and convergence in supervisory practices reached by competent authorities:
(i)
the independence of the competent authorities and convergence in standards equivalent to corporate governance;’;
(iii)
the following point is added:
‘(g)
the functioning of the Joint Committee.’;
(b)
the following paragraphs are inserted:
‘2a. As part of the general report referred to in paragraph 1 of this Article, the Commission shall, after consulting all relevant authorities and stakeholders, conduct a comprehensive assessment of the application of Article 9a.
2b. As part of the general report referred to in paragraph 1, the Commission shall, after consulting all relevant authorities and stakeholders, conduct a comprehensive assessment of the potential supervision of third-country trading venues by the Authority exploring aspects such as recognition based on systemic importance, organisational requirements, ongoing compliance, fines and periodic penalty payments as well as staff and resources. In its assessment, the Commission shall take into account the effects on liquidity, including the availability of best price for investors, best execution for EU clients, access barriers and economic benefits for EU counterparties to trade globally as well as the development of the capital markets union.
2c. As part of the general report referred to in paragraph 1, the Commission shall, after consulting all relevant authorities and stakeholders, conduct a comprehensive assessment of the potential supervision of third-country central securities depositories (CSDs) by the Authority exploring aspects such as recognition based on systemic importance, organisational requirements, ongoing compliance, fines and periodic penalty payments as well as staff and resources.
2d. The Commission shall submit the assessments referred to in paragraphs 2b and 2c, together with any legislative proposal, if appropriate, to the European Parliament and to the Council by 30 June 2021.’.