### (19) synthetic excess spread is widely present in certain types of transactions , and it is a helpful mechanism for both investors and originators , in order to reduce the cost of the credit protection and the exposure at risk respectively. in this regard , synthetic excess spread is essential for some specific retail asset classes , such as small and medium-sized enterprises (sme) and consumer lending , that show both higher yield and credit losses than other asset classes , and for which the securitised exposures generate excess spread to cover for those losses. however , where the amount of synthetic excess spread subordinated to the investor position is too high , it is possible that under no realistic scenario the investor in the securitisation positions will experience any losses , resulting in no effective risk transfer. to mitigate supervisory concerns and further standardise this structural feature , it is important to specify strict criteria for sts balance-sheet synthetic securitisations and to ensure full disclosure on the use of synthetic excess spread. ### deleted


### (28) ‘synthetic excess spread’ means the amount committed in the transaction documentation by the originator to cover losses of the referenced portfolio that might occur during the life time of the transaction.; ### deleted


### 6. the transaction documentation shall include appropriate early amortisation triggers for a termination of the revolving period , where a securitisation is a revolving securitisation , including at least the following: ### deleted


### 6. the originator may commit synthetic excess spread , which shall be available as credit enhancement for the investors , where all of the following conditions are met: ### deleted


### — having regard to its resolution of 18 december 2019 on fair taxation in a digitalised and globalised economy: beps 2.01 , ### deleted


### (3) credit institutions have been active in the recovery to support companies that needed financing and are expected to be a fundamental pillar of the recovery. regulation (eu) 2017/1129 entitles credit institutions to an exemption from the obligation to publish a prospectus in case of an offer of certain non-equity securities issued in a continuous or repeated manner up to an aggregated amount of eur 75 million in a 12 month-period. that exemption threshold should be increased for a limited period of time in order to foster fundraising for credit institutions and bring them a breathing space to support their clients in the real economy. as that measure is limited to the recovery phase , it should therefore be available for a limited time period of 18 months. ### (3) credit institutions have been active in the recovery to support companies that needed financing and are expected to be a fundamental pillar of the recovery. regulation (eu) 2017/1129 entitles credit institutions to an exemption from the obligation to publish a prospectus in case of an offer of certain non-equity securities issued in a continuous or repeated manner up to an aggregated amount of eur 75 million in a 12 month-period. that exemption threshold should be increased for a limited period of time in order to foster fundraising for credit institutions and bring them a breathing space to support their clients in the real economy. as that measure is limited to the recovery phase , it should therefore be available for a limited time period ending on 31 december 2022.


### (10) regulation (eu) 2017/1129 requires financial intermediaries to inform investors of the possibility of a supplement and , under certain circumstances , to contact investors on the same day that a supplement is published. the scope of investors to contact as well as the deadline to contact them can raise difficulties. in order to provide relief and free up resources for financial intermediaries while maintaining a high level of investor protection , a more proportionate regime should be laid down. such regime should specify which investors should be contacted by financial intermediaries when a supplement is published and extend the deadline to contact those investors. ### (10) regulation (eu) 2017/1129 requires financial intermediaries to inform investors of the possibility of a supplement and , under certain circumstances , to contact investors on the same day that a supplement is published. the scope of investors to contact as well as the deadline to contact them can raise difficulties for financial intermediaries. in order to provide relief and free up resources for financial intermediaries while maintaining a high level of investor protection , a more proportionate regime should be laid down. such regime should specify which investors should be contacted by financial intermediaries when a supplement is published and should extend the deadline to contact those investors.


### (11) as the eu recovery prospectus is limited to the recovery phase , the regime of this prospectus should expire 18 months after the date of application of this regulation. in order to ensure the continuity of eu recovery prospectuses , the ones approved before the expiration of the regime should benefit from a grandfathering provision. ### (11) as the eu recovery prospectus is limited to the recovery phase , the regime of this prospectus should expire by 31 december 2022. in order to ensure the continuity of eu recovery prospectuses , the ones approved before the expiration of the regime should benefit from a grandfathering provision.


### from [date of application of this regulation] to [18 months from the date of application of this regulation] non-equity securities issued in a continuous or repeated manner by a credit institution , where the total aggregated consideration in the union for the securities offered is less than eur 150 000 000 per credit institution calculated over a period of 12 months , provided that those securities: ### from [date of application of this regulation] to 31 december 2022 non-equity securities issued in a continuous or repeated manner by a credit institution , where the total aggregated consideration in the union for the securities offered is less than eur 150 000 000 per credit institution calculated over a period of 12 months , provided that those securities:


### 2. where the prospectus relates to an offer of securities to the public , investors who have already agreed to purchase or subscribe for the securities before the supplement is published shall have the right , exercisable within three working days after the publication of the supplement , to withdraw their acceptances , provided that the significant new factor , material mistake or material inaccuracy referred to in paragraph 1 arose or was noted before the closing of the offer period or the delivery of the securities , whichever occurs first. that period may be extended by the issuer or the offeror. the final date of the right of withdrawal shall be stated in the supplement.; ### 2. where the prospectus relates to an offer of securities to the public , investors who have already agreed to purchase or subscribe for the securities before the supplement is published shall have the right , exercisable within two working days after the publication of the supplement , to withdraw their acceptances , provided that the significant new factor , material mistake or material inaccuracy referred to in paragraph 1 arose or was noted before the closing of the offer period or the delivery of the securities , whichever occurs first. that period may be extended by the issuer or the offeror. the final date of the right of withdrawal shall be stated in the supplement.;


### the regime set out in article 14a expires on [18 months from the date of application of this regulation]. ### the regime set out in article 14a expires on 31 december 2022.


### eu recovery prospectuses drawn up in accordance with article 14a and approved between [date of application of this regulation] and [18 months after the date of application of this regulation] shall continue to be governed in accordance with that article until the end of their validity or until twelve months have elapsed after [18 months after date of application of this regulation] , whichever occurs first. ### eu recovery prospectuses drawn up in accordance with article 14a and approved between [date of application of this regulation] and 31 december 2022 shall continue to be governed in accordance with that article until the end of their validity or until twelve months have elapsed after 31 december 2022 , whichever occurs first.


### the number of eu recovery prospectuses approved and an analysis of the evolution of such number; ### the number of standard prospectuses , eu growth prospectuses and eu recovery prospectuses approved and an analysis of the evolution of such number and , where appropriate , offer prices of securities offered to the public in relation to all types of prospectuses;


### the cost of preparing and having an eu recovery prospectus approved compared to the current costs for a prospectus , together with an indication of the overall financial savings achieved; ### the cost of preparing and having an eu recovery prospectus approved compared to the current costs for a standard prospectus and an eu growth prospectus , together with an indication of the overall financial savings achieved and total costs of complying with this regulation for issuers , offerors and financial intermediaries together with the information of these costs as a percentage of operational costs;


### a. whereas all actions taken to create a capital markets union (cmu) should have improving the range of financing options offered to companies and citizens , as well as a greater range of more attractive investment offers , as their objective; ### a. whereas bank loan financing is in itself not sufficient to provide the amount of credit needed for the eu economy to recover from the crisis , but should instead be complemented with stronger market-based financing; whereas all actions taken to create a capital markets union (cmu) should therefore have improving the range of financing options offered to companies and citizens , as well as a greater range of more attractive investment offers , as their objective;


### b. whereas the actions taken so far to achieve the cmu are moving in the right direction; whereas much work nevertheless remains to be done in terms of the precision , effectiveness and simplification of the measures adopted; ### b. whereas most actions taken so far to achieve the cmu are moving in the right direction; whereas much work nevertheless remains to be done in terms of the precision , effectiveness and simplification of the measures adopted;


### 1. calls for the removal of barriers , including the simplification of legislation , to diversify funding sources for smes , in order to promote smes’ ability to access equity markets , and to reduce the existing debt bias; points out that the current situation makes smes more fragile and vulnerable; ### 1. calls for the removal of barriers , including the simplification and more proportional application of legislation and the removal of red tape , to diversify funding sources for smes , in order to promote smes’ ability to access equity markets , and to reduce the existing debt bias; points out that the current situation makes smes more fragile and vulnerable;


### 2. takes the view that the efficiency of financial markets should be improved and that the listing of companies should be facilitated; encourages the creation and prioritisation of a large private pan-european fund , an initial public offering (ipo) fund , to support smes; ### 2. notes the declining initial public offering (ipo) markets in the eu , reflecting their limited attractiveness for in particular smaller companies; highlights in this regard that smes face disproportionate administrative burdens and costs of compliance with listing requirements; takes the view that the efficiency of financial markets should be improved and that the listing of companies should be facilitated; encourages the creation and prioritisation of a large private pan-european fund , an ipo fund , to support smes;


### 4. requests the realignment of the treatment of cash and synthetic securitisations , of the treatment of regulatory capital and liquidity with that of covered bonds and loans , as well as with the disclosure and due diligence requirements for covered bonds and simple , transparent and standardised (sts) securitisation; ### 4. requests the realignment of the treatment of cash and synthetic securitisations , of the treatment of regulatory capital and liquidity with that of covered bonds and loans , as well as a review of the disclosure and due diligence requirements for third country securitisation , covered bonds and simple , transparent and standardised (sts) securitisation; requests a clearer role for competent authorities in significant risk transfer assessments , improved credit underwriting standards , and reduction of npls;


### 5. calls for targeted measures within securities market legislation to expedite the recovery after the covid-19 crisis; supports changes in the prospectus regulation , the markets in financial instruments directive (mifid) , the securitisation regulation and the market abuse regulation to facilitate investments in the real economy , in particular in smes , and to allow newcomers and new products to enter the markets , preserving consumer protection and market integrity; ### 5. calls for targeted measures within securities market legislation such as changes in the prospectus regulation , the markets in financial instruments directive (mifid) , the securitisation regulation and the market abuse regulation to facilitate investments in the real economy , in particular in smes , and to allow newcomers and new products to enter the markets , preserving consumer protection and market integrity;


### 6. asks the member states to amend their national tax frameworks , in order to reduce tax obstacles to cross-border investments , including withholding tax procedures , and to increase financing by investors to long-term investment opportunities thereby improving returns on long-term savings for eu citizens; ### 6. asks the member states to consider amending their national tax frameworks , in order to reduce tax obstacles to cross-border investments , including withholding tax procedures , and to increase financing by investors to long-term investment opportunities thereby improving returns on long-term savings for eu citizens;


### 7. highlights the importance of increasing legal certainty for cross-border investments by making national insolvency proceedings more efficient and effective; ### 7. highlights the importance of increasing legal certainty for cross-border investments by making national insolvency proceedings more efficient and effective , thus mitigating home bias , legal risks and costs;


### 9. underlines the need to promote pension provision; welcomes the pan-european personal pension (pepp) product; reminds member states that pepps need to be subject to the same tax treatment as national pension products to become an option for savers; ### 9. underlines the need to promote pension provision; welcomes the pan-european personal pension (pepp) product; reminds member states that pepps need to be subject to the same tax treatment as national pension products to become an option for savers; highlights the importance of a level playing field for pepp product providers including with regard to risk-mitigation techniques in the investment process; calls for a thorough evidence-based evaluation of the launch of the pepp market before the next legislative review of the pepp regulation;


### 10. encourages the member states to promote multi-pillar pension systems , including occupational pension schemes , as a way to improve market dynamics and the incentives to invest; believes that private pensions should be revitalised and made more attractive; encourages the participation of investors in long-term products with tax reduction or exemption policies; ### 10. highlights that demographic developments necessitate supplementing pay-as-you-go pensions with life-long intelligent saving and investing; encourages the member states to promote multi-pillar pension systems , including occupational pension schemes , as a way to improve market dynamics and the incentives to invest; believes that private pensions should be revitalised and made more attractive; encourages the participation of investors in long-term products with tax reduction or exemption policies;


### 12. stresses the need for european and national supervisory authorities to overcome their differences; calls for supervisory convergence to promote a common european model , guided by the european securities and market authority (esma) , to reduce the existing obstacles to cross-border financial operations; ### 12. stresses the need for close cooperation between european and national supervisory authorities; calls for supervisory convergence to promote a common model , guided by the european securities and market authority (esma) , to reduce existing obstacles to cross-border financial operations;


### 15. emphasises that access to financial markets should be possible for all enterprises under the ‘same business , same rules’ principle; ### 15. stresses the need for a level playing field between financial services firms and technology firms; emphasises that access to financial markets should be possible for all enterprises under the ‘same business , same rules’ principle;


### 16. recalls the existence of different shortcomings in the legislation on packaged retail investment and insurance products (priips) that should be addressed in the next review; expects that level 2 priips legislation on the key investor document to respect level 1 , in particular in relation to the performance scenarios; regrets the delays in the adoption of level 2 priips legislation that will overlap with the first review of priips , and which increases legal uncertainty and costs for stakeholders; ### 16. recalls the existence of different shortcomings in the legislation on packaged retail investment and insurance products (priips) that should be addressed in a comprehensive review covering level 1 as well as level 2 ; expects that level 2 priips legislation on the key investor document to respect level 1 , in particular in relation to the performance scenarios; regrets the delays in the adoption of level 2 priips legislation that will overlap with the first review of priips , and which increases legal uncertainty and costs for stakeholders;


### 17. urges the commission to make clear the differentiation between professional and retail investors on all levels of mifid , making it possible to tailor the treatment of clients according to their knowledge and experience on the markets; requests that the commission consider the introduction of a category of semi-professional investors to better respond to the reality of participation on the financial markets; ### 17. urges the commission to make clear the differentiation between professional and retail investors on all levels of mifid , making it possible to tailor the treatment of clients according to their knowledge and experience on the markets;


### 18. is of the opinion that the current reporting framework within mifid ii and the european market infrastructure regulation (emir) is very costly and complex , hindering the effectiveness of the system; believes that a simplification thereof is necessary; ### 18. is of the opinion that the current reporting framework within mifid ii and the european market infrastructure regulation (emir) is very costly and complex , hindering the effectiveness of the system; calls in this regard for a simplification;


### 20. underlines that financial education is needed to overcome low retail investor engagement with financial markets , based on lack of knowledge , mistrust and risk aversion; ### 20. underlines that financial education is needed to accelerate retail investor engagement with financial markets , based on increased knowledge , trust and risk awareness;


### 22. urges the member states to include financial literacy programs in school curricula aimed at developing autonomy in financial matters; suggests the inclusion of this topic in the programme for international student assessment (pisa) study; ### 22. urges member states , as well as , where appropriate , competent regional , local or other public authorities , to consider including or expanding financial literacy programs in school curricula aimed at developing autonomy in financial matters; suggests that such programs should at least include basic financial concepts such as compounding interest , returns and annuities and the distinction between bonds and shares; suggests the inclusion of financial literacy in the programme for international student assessment (pisa) study;


### 23. takes the view that the digitalisation of financial services can be a catalyst for the mobilisation of capital in the eu while reducing barriers and increasing supervisory efficiency; emphasises that an eu framework with high standards of cybersecurity would be conducive to the cmu; ### 23. takes the view that the digitalisation of financial services can be a catalyst for the mobilisation of capital in the eu while reducing barriers and increasing supervisory efficiency; underlines that digitalisation should neither lead to regulatory arbitrage nor to lower customer protection , reduced safety or financial stability risks; emphasises that an eu framework with high standards of cybersecurity would be conducive to the cmu;


### 25. points out that europe competes for capital in a global market , and that , as a result , deeper , more integrated and efficient european capital markets are critical to protecting europe’s economic sovereignty , the use of the euro in third countries , and to attracting foreign investors; ### 25. points out that europe competes for capital in a global market , and that , as a result , deeper , more integrated , efficient and resilient european capital markets are critical to protecting europe’s economic sovereignty , to encouraging the use of the euro in third countries , and to attracting foreign investors;


### (5) from information already held by payment service providers , they are able to identify the location of the payee and the payer in relation to the payment services they execute , based on an identifier of an individual payment account in a member state used by that payer or payee. ### (5) from information already held by payment service providers , they are able to identify the location of the payee and the payer in relation to the payment services they execute , based on an identifier of an individual payment account in a member state used by that payer or payee or other identifier of the payer or payee and their location.


### (7) in accordance with regulation (eu) 2016/679 of the european parliament and of the council46 , it is important that the obligation on a payment service provider , to retain and provide information in relation to a cross-border payment transaction , should be proportionate and should only be what is necessary for member states to fight e-commerce vat fraud. furthermore , the only information relating to the payer that should be retained is where the payer is located. with regard to information relating to the payee and the payment transaction itself , payment service providers should only be required to retain and transmit to tax authorities information which is necessary for tax authorities to detect possible fraudsters and to carry out vat controls. therefore , payment service providers should only be required to retain records on cross-border payment transactions which are likely to indicate economic activities. the introduction of a ceiling based on the number of payments received by a payee over the course of a calendar quarter would give a reliable indication that those payments were received as part of an economic activity , thereby excluding payments for non-commercial reasons. where such a ceiling is reached , the accounting obligation of the payment service provider would be triggered. ### (7) in accordance with regulation (eu) 2016/679 of the european parliament and of the council46 , it is important that the obligation on a payment service provider , to retain and provide information in relation to a cross-border payment transaction , should be proportionate and should only be what is necessary for member states to fight e-commerce vat fraud. furthermore , the only information relating to the payer that should be retained is where the payer is located. with regard to information relating to the payee and the payment transaction itself , payment service providers should only be required to retain and transmit to tax authorities information which is necessary for tax authorities to detect possible fraudsters and to carry out vat controls. therefore , payment service providers should only be required to retain records on cross-border payment transactions which are likely to indicate economic activities. the introduction of a ceiling based on the number of payments received by a payee over the course of a calendar quarter would give a reliable indication that those payments were received as part of an economic activity , thereby excluding payments for non-commercial reasons. where such a ceiling is reached , the accounting obligation of the payment service provider would be triggered. in order to bring a balance between administrative obligations for service providers and better collection of vat by member states , payment service providers shall have a possibility to provide data in a form already easily available to them , i.e. either for each transaction individually or at an aggregate level.


### 1. member states shall ensure that payment service providers keep sufficiently detailed records of the payees and of the payment transactions in relation to payment services they execute for each calendar quarter to enable the competent authorities of the member states to carry out controls of the supplies of goods and services which in accordance with the provisions of title v are deemed to take place in a member state. ### 1. member states shall ensure that payment service providers keep sufficiently detailed records of the payees and of the payment transactions in relation to cross-border payment they execute for each calendar quarter to enable the competent authorities of the member states to carry out controls of the supplies of goods and services which in accordance with the provisions of title v are deemed to take place in a member state.


### the iban of the payer’s payment account; ### the iban of the payer’s payment account or any other identifier which unambiguously identifies the payer and his location;


### 1. the records kept by the payment service providers , in accordance with article 243b , shall contain the following information: ### 1. the records kept by the payment service providers related to cross-border payment transaction , in accordance with article 243b , shall contain any of the following information available to payment service provider:


### – having regard to the statute of the european system of central banks (escb) and of the ecb , in particular article 15 thereof , ### – having regard to the statute of the european system of central banks (escb) and of the ecb , in particular article 15 and article 21 thereof ,


### – having regard to the statute of the european system of central banks (escb) and of the ecb , in particular article 15 thereof , ### – having regard to the statute of the european system of central banks (escb) and of the ecb , in particular articles 15 and 21 thereof ,


### – having regard to article 284(3) of the treaty on the functioning of the european union , ### – having regard to articles 123 , 127(1) and 284(3) of the treaty on the functioning of the european union ,


### c. whereas according to the eurosystem staff macroeconomic projections of september 2019 , annual inflation for the euro area in the harmonised index of consumer prices (hicp) looks set to reach 1.2 % , 1.0 % and 1.5 % in 2019 , 2020 and 2021 , thus still falling short of the medium-term objective of 2 %; ### c. whereas according to the eurosystem staff macroeconomic projections of september 2019 , annual inflation for the euro area in the harmonised index of consumer prices (hicp) looks set to reach 1.2 % , 1.0 % and 1.5 % in 2019 , 2020 and 2021 , thus still falling short of the medium-term objective of 2 %; whereas inflation projections show substantial variance across the euro area;


### c. whereas according to the eurosystem staff macroeconomic projections of september 2019 , annual inflation for the euro area in the harmonised index of consumer prices (hicp) looks set to reach 1.2 % , 1.0 % and 1.5 % in 2019 , 2020 and 2021 , thus still falling short of the medium-term objective of 2 %; ### c. whereas according to the eurosystem staff macroeconomic projections of september 2019 , annual inflation for the euro area in the harmonised index of consumer prices (hicp) looks set to reach 1.2 % , 1.0 % and 1.5 % in 2019 , 2020 and 2021 , thus still falling short of the medium-term objective of 2 %; recalls however the large variance in inflation rates across the euro area;


### d. whereas at the end of 2018 the size of the eurosystem balance sheet had reached an all-time high of eur 4.7 trillion , an increase of 0.2 trillion compared with the end of 2017; ### d. whereas at the end of 2018 the size of the eurosystem balance sheet had reached an all-time high of eur 4.7 trillion , over 40% of euro area gdp , an increase of 0.2 trillion compared with the end of 2017; whereas concerns continue to exist that the balance sheet of the ecb contains rising levels of risk;


### d. whereas at the end of 2018 the size of the eurosystem balance sheet had reached an all-time high of eur 4.7 trillion , an increase of 0.2 trillion compared with the end of 2017; ### d. whereas at the end of 2018 the size of the eurosystem balance sheet had reached an all-time high of eur 4.7 trillion , thus exceeding 40% of the euro area gdp , an increase of 0.2 trillion compared with the end of 2017;


### f. whereas a stronger role of the euro , and its increased use as a reserve currency , would increase the eu’s ability to frame its policy stance independently vis-à-vis the us and the federal reserve and would ultimately provide protection from the risk of an uncooperative us approach; ### deleted


### f. whereas a stronger role of the euro , and its increased use as a reserve currency , would increase the eu’s ability to frame its policy stance independently vis-à-vis the us and the federal reserve and would ultimately provide protection from the risk of an uncooperative us approach; ### f. whereas a stronger role of the euro , and its increased use as a reserve currency , could in the long term increase the eu’s ability to frame its policy stance independently vis-à-vis the us and the federal reserve;


### f. whereas a stronger role of the euro , and its increased use as a reserve currency , would increase the eu’s ability to frame its policy stance independently vis-à-vis the us and the federal reserve and would ultimately provide protection from the risk of an uncooperative us approach; ### f. whereas a stronger role of the euro , and its increased use as a reserve currency , could in the long term increase the eu’s ability to frame its policy stance independently vis-à-vis other global powers and would ultimately provide protection from the risk of an uncooperative approach by other global powers;


### h. whereas despite this positive trend , green bonds still account for only 1 % of the overall supply of euro-denominated bonds; ### h. whereas despite this trend , green bonds account for 1 % of the overall supply of euro-denominated bonds;


### h. whereas despite this positive trend , green bonds still account for only 1 % of the overall supply of euro-denominated bonds; ### h. whereas despite this trend , green bonds still account for only 1 % of the overall supply of euro-denominated bonds;


### 1. welcomes the role of the ecb in safeguarding euro stability and stresses that the ecb’s independence is a requisite for fulfilling its mandate; ### 1. welcomes the role of the ecb in safeguarding euro stability and stresses that the ecb’s independence is a requisite for fulfilling its mandate; notes that such independence requires that the ecb shall not seek or take instructions from union institutions or bodies , from any government of a member state or from any other body; considers that the independence of the ecb cannot in any way be reconciled with political campaigning;


### 2. is concerned that after a short economic recovery , euro area growth momentum has slowed markedly to 1.2 % of gdp in the euro area and to 1.4 % of gdp for the eu-27; underlines , therefore , the need for monetary policy to remain accommodative for the foreseeable future; ### 2. regrets that the heavy reliance on monetary policy to support the post-crisis recovery has also had unintended negative consequences


### 2. is concerned that after a short economic recovery , euro area growth momentum has slowed markedly to 1.2 % of gdp in the euro area and to 1.4 % of gdp for the eu-27; underlines , therefore , the need for monetary policy to remain accommodative for the foreseeable future; ### 2. is concerned that after a short economic recovery , euro area growth momentum has slowed markedly to 1.2 % of gdp in the euro area and to 1.4 % of gdp for the eu-27; believes that the structural contribution that monetary policy makes to sustainable growth is limited; underlines , therefore , the need for policy makers to undertake productivity-enhancing structural reforms and pursue sound fiscal policies;


### 3. stresses that fiscal policy is a necessary component for enhancing the impact of monetary policy and reducing possible side effects; ### 3. warns that the ecb's monetary policy is currently dominated by the lack of sound fiscal policies in some member states;


### 3. stresses that fiscal policy is a necessary component for enhancing the impact of monetary policy and reducing possible side effects; ### 3. stresses that it is not the role of fiscal policy is to enhance the impact of monetary policy or to reduce its possible side effects; considers instead that fiscal policy and monetary policy need to compensate for each other: an expansive monetary policy should go hand in hand with a restrictive fiscal policy and the other way around , only in crisis situations they should strengthen each other; emphasises that the euro area is currently not in a situation which requires such policy convergence;


### 4. underlines the findings of the escb expert group on low wage growth1 , which analysed the disconnect between wage growth and labour market recovery , namely that low wage growth over recent years can be explained mainly by technology and wage bargaining shocks , the latter being impacted by changes in wage bargaining structure – reducing the bargaining power of employees – and labour market regulations – mainly in countries most affected by the global economic and financial crisis and the combination of labour underutilisation , low inflation readings and subdued productivity growth; ### 4. takes note of the findings of the escb expert group on low wage growth1 , namely that a combination of slack in the labour market , low inflation readings and subdued productivity growth has been holding back wage growth in the euro area; emphasises that innovation and flexibility are prerequisites for competitive labour markets; considers moreover that the ecb's very accommodative monetary policy itself is an important determinant of the subdued productivity growth , as highly indebted corporations survive thanks to low interest rates , thus compressing productivity;


### 5. underlines that strengthening the role of the euro requires the right structural conditions , among which: ### deleted


### 5. underlines that strengthening the role of the euro requires the right structural conditions , among which: ### 5. underlines that , especially in light of brexit , focus ought to be on consolidation and reflection rather than expansion and deepening of the european monetary union;


### 5. underlines that strengthening the role of the euro requires the right structural conditions , among which: ### 5. underlines that strengthening the role of the euro , increasing the resilience of the euro area economy , reducing structural unemployment and boosting euro area growth potential and productivity requires the right structural conditions , among which:


### - the deepening of the european monetary union , including a fiscal capacity for the euro area able to providing a counter-cyclical stabilisation function; ### deleted


### - the deepening of the european monetary union , including a fiscal capacity for the euro area able to providing a counter-cyclical stabilisation function; ### - the deepening of the european monetary union which requires first and foremost sound fiscal policies and the implementation of structural reforms at national level aimed at better functioning product and factor markets , however which does not require a fiscal capacity for the euro area able to providing a counter-cyclical stabilisation function since member states with access to financial markets can play such a shock-absorbing role themselves;


### - the completion of the banking union , including a fully mutualised european deposit insurance scheme that would reduce risks , promote fair competition , facilitate the expansion of pan-european banking and reinforce the stability of the euro area as a whole; ### deleted


### - the completion of the banking union , including a fully mutualised european deposit insurance scheme that would reduce risks , promote fair competition , facilitate the expansion of pan-european banking and reinforce the stability of the euro area as a whole; ### - warns that there is no legal base for a european deposit insurance scheme. mutualisation does not create additional security , but rather stimulates risk-taking behaviour of banks;


### - the completion of the banking union , including a fully mutualised european deposit insurance scheme that would reduce risks , promote fair competition , facilitate the expansion of pan-european banking and reinforce the stability of the euro area as a whole; ### - the reinforcement of the banking union , including accelerated efforts by various member states to reduce their high levels of non-performing loans (npls) and , following a proper clean-up of bank balance sheets , a european deposit insurance scheme that remains a fundamental objective for the euro area's financial stability;


### - the completion of the capital markets union; ### deleted


### - the creation of a safe asset guaranteed by euro-area member states to foster the integration of bond markets; ### deleted


### 6. underlines that the asset purchase programme (app) has provided a substantial contribution to economic recovery and the formation of households’ inflation expectations , has led to a substantial improvement in financing conditions via several transmission channels , and has compressed yields across a wide range of asset classes; stresses , in particular , that the app has directly improved credit conditions for the private non-financial sector with the asset-backed securities purchase programme (abspp) and the third covered bond purchase programme (cbpp3); ### 6. is concerned that certain european countries have profited in a disproportionate way from the pspp , since national central banks and the ecb have purchased certain government bonds whose volume exceeds these member states’ share in gdp , in two cases even by respectively 43 billion and 51 billion euros , well above the average of 14.4% of gdp for the entire eurozone; stresses that this strengthens the suspicion that the main goal of the pspp is fiscal stabilisation of over-indebted member states of the euro area , which falls outside the scope of the mandate of the ecb.


### 6. underlines that the asset purchase programme (app) has provided a substantial contribution to economic recovery and the formation of households’ inflation expectations , has led to a substantial improvement in financing conditions via several transmission channels , and has compressed yields across a wide range of asset classes; stresses , in particular , that the app has directly improved credit conditions for the private non-financial sector with the asset-backed securities purchase programme (abspp) and the third covered bond purchase programme (cbpp3); ### 6. underlines that while the asset purchase programme (app) has provided a short-term contribution to economic recovery , quantitative easing cannot be considered a permanent source of growth nor should it ever be part of any long-term strategy to create growth;


### 6. underlines that the asset purchase programme (app) has provided a substantial contribution to economic recovery and the formation of households’ inflation expectations , has led to a substantial improvement in financing conditions via several transmission channels , and has compressed yields across a wide range of asset classes; stresses , in particular , that the app has directly improved credit conditions for the private non-financial sector with the asset-backed securities purchase programme (abspp) and the third covered bond purchase programme (cbpp3); ### 6. notes that the asset purchase programme (app) has provided in the short term a contribution to a cyclical economic recovery and the formation of households’ inflation expectations , has led to an improvement in financing conditions via several transmission channels at the cost of potential and actual misallocation of real resources , and has compressed yields across a wide range of asset classes; notes further that the app has improved credit conditions for the private non-financial sector with the asset-backed securities purchase programme (abspp) and the third covered bond purchase programme (cbpp3);


### 7. notes that on 12 september 2019 the ecb announced a broad stimulus package including an open-ended quantitative easing programme that will run at a monthly pace of eur 20 billion per month , a cut of 10 basis points in the deposit rate , a two-tier system for reserve remuneration , and easier terms for targeted longer-term refinancing operations (tltro-iii); ### 7. deplores that on 12 september 2019 the ecb announced a broad stimulus package including an open-ended quantitative easing programme that will run at a monthly pace of eur 20 billion per month , a cut of 10 basis points in the deposit rate , a two-tier system for reserve remuneration , and easier terms for targeted longer-term refinancing operations (tltro-iii); calls on the ecb to end its stimulus package as soon as possible , including phasing out tltro;


### 7. notes that on 12 september 2019 the ecb announced a broad stimulus package including an open-ended quantitative easing programme that will run at a monthly pace of eur 20 billion per month , a cut of 10 basis points in the deposit rate , a two-tier system for reserve remuneration , and easier terms for targeted longer-term refinancing operations (tltro-iii); ### 7. regrets that on 12 september 2019 the ecb announced a broad stimulus package including an open-ended quantitative easing programme that will run at a monthly pace of eur 20 billion per month , a cut of 10 basis points in the deposit rate , a two-tier system for reserve remuneration , and easier terms for targeted longer-term refinancing operations (tltro-iii); points out that the ecb has few instruments left to fend off adverse macroeconomic shocks; urges the ecb to normalise monetary policy as soon as possible;


### 8. notes that the negative effects on banks’ net interest income have been counterbalanced so far by the benefits from more bank lending and lower costs for provisions and losses; ### deleted


### 8. notes that the negative effects on banks’ net interest income have been counterbalanced so far by the benefits from more bank lending and lower costs for provisions and losses; ### 8. warns that the negative effects on banks’ net interest income and the increase in banks' lending capacity and lower costs for provisions and losses , which rewards risky behaviour and spurs speculation , poses significant systemic threats in the banking sector and the real economy;


### 9. underlines that very low or negative interest rates offer opportunities to consumers , workers and borrowers , who can benefit from stronger economic momentum , lower unemployment and lower borrowing costs; ### deleted


### 9. underlines that very low or negative interest rates offer opportunities to consumers , workers and borrowers , who can benefit from stronger economic momentum , lower unemployment and lower borrowing costs; ### 9. emphasises that low interest rates have made issuing new debt cheaper; reiterates that debt levels in certain member state are still unsustainable; stresses that in 4 euro area member states debt levels are still well above 100% of gdp; reiterates that low interest rates are instrumental in the emergence of market bubbles , primarily , but certainly not only , in the real estate market;


### 10. supports the intention of the governing council of the ecb to continue reinvesting the principal payments from maturing securities for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation; ### 10. deplores the intention of the governing council of the ecb to continue reinvesting the principal payments from maturing securities for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation , since this policy falls outside the scope of the mandate of the ecb as enshrined in article 127 tfeu;


### 10. supports the intention of the governing council of the ecb to continue reinvesting the principal payments from maturing securities for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation; ### 10. regrets the intention of the governing council of the ecb to continue reinvesting the principal payments from maturing securities;


### 10. supports the intention of the governing council of the ecb to continue reinvesting the principal payments from maturing securities for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation; ### 10. regrets the ecb governing council's intention to continue reinvesting the principal payments from maturing securities to maintain favourable liquidity conditions and an ample degree of monetary accommodation;


### 11. recalls that , as an eu institution , the ecb is bound by the paris agreement on climate change and that this should be reflected in its policies , with full respect for its mandate and its independence; ### 11. recalls that the ecb is an independent body with a strict and limited mandate enshrined in article 127 tfeu , namely to ensure price stability , which means the eu´s obligations under the paris agreement on climate change fall outside the scope of the ecb's mandate;


### 11. recalls that , as an eu institution , the ecb is bound by the paris agreement on climate change and that this should be reflected in its policies , with full respect for its mandate and its independence; ### 11. recalls that , as an eu institution , the ecb has a narrowly defined mandate enshrined in article 127 tfeu that should be reflected in its policies;


### 12. takes good note of christine lagarde’s declaration of 4 september , in which she welcomed the ecb’s collaboration in the network for greening the financial system (ngfs) and commitment to contribute to facing the challenges which climate change poses by implementing the ngfs’s recommendations and acting on them substantively wherever possible without undermining the ecb’s price stability mandate and other objectives; ### 12. regrets christine lagarde’s declaration of 4 september , in which she welcomed the ecb’s collaboration in the network for greening the financial system (ngfs) and commitment to contribute to facing the challenges which climate change poses by implementing the ngfs’s recommendations and acting on them substantively wherever possible , which undermines the ecb’s price stability mandate and its subservient objectives;


### 12. takes good note of christine lagarde’s declaration of 4 september , in which she welcomed the ecb’s collaboration in the network for greening the financial system (ngfs) and commitment to contribute to facing the challenges which climate change poses by implementing the ngfs’s recommendations and acting on them substantively wherever possible without undermining the ecb’s price stability mandate and other objectives; ### 12. regrets christine lagarde’s declaration of 4 september , in which she welcomed the ecb’s collaboration in the network for greening the financial system (ngfs) and commitment to contribute to facing the challenges which climate change poses by implementing the ngfs’s recommendations , something that would risk undermining the ecb’s price stability mandate and other objectives;


### 12. takes good note of christine lagarde’s declaration of 4 september , in which she welcomed the ecb’s collaboration in the network for greening the financial system (ngfs) and commitment to contribute to facing the challenges which climate change poses by implementing the ngfs’s recommendations and acting on them substantively wherever possible without undermining the ecb’s price stability mandate and other objectives; ### 12. notes the incoming ecb president's declaration of 4 september , in which she welcomed the ecb’s collaboration in the network for greening the financial system (ngfs) and of her commitment to contribute to facing the challenges which climate change poses by implementing the ngfs’s recommendations and acting on them substantively wherever possible , thus risking to jeopardise the ecb's primary price stability mandate and secondary other objectives;


### 13. calls on the ecb to continue its preparatory efforts to ensure the stability of eu financial markets for all possible contingencies relating to brexit; ### 13. calls on the ecb to continue its preparatory efforts to ensure the stability of eu financial markets for all possible contingencies , especially those related to brexit;


### 14. is extremely worried about the risks due to the delay in setting up the banking union , and calls for the swift completion of the banking union with a fully mutualised european deposit guarantee scheme; ### deleted


### 14. is extremely worried about the risks due to the delay in setting up the banking union , and calls for the swift completion of the banking union with a fully mutualised european deposit guarantee scheme; ### 14. takes note of the delay in setting up the banking union , and concludes that there is no political will for the swift completion of the banking union , including a fully mutualised european deposit guarantee scheme , which would only be in the interest of those member states at the receiving end of the benevolent solidarity of other member states; underlines that the lack of structural reforms , risk-reduction and debt-levels in aforementioned member states has created substantial distrust within the eu and between member states;


### 15. calls for the capital markets union (cmu) project to be accelerated in order to deepen financial integration , with a view to improving resilience to shocks and making the transmission of monetary policy across the monetary union more effective; ### deleted


### 15. calls for the capital markets union (cmu) project to be accelerated in order to deepen financial integration , with a view to improving resilience to shocks and making the transmission of monetary policy across the monetary union more effective; ### 15. calls for the capital markets union (cmu) project to be accelerated in order to deepen financial integration , with a view to improving resilience to shocks and making the transmission of monetary policy across the monetary union more effective; believes that the fastest way to achieve a well-functioning cmu is to reduce the burden of regulations hindering well-functioning capital markets to have a broader impact all over the union;


### 16. calls on the ecb to increase its monitoring of the development of crypto-currencies and the increased risks in cyber-security; ### 16. calls on all supervisory authorities to increase monitoring of the development of crypto-assets and crypto-currencies , with a special focus on the facebook-backed crypto-currency libra , and the increased risks in cyber-security;


### 16. calls on the ecb to increase its monitoring of the development of crypto-currencies and the increased risks in cyber-security; ### 16. calls on all supervisory authorities to increase monitoring of the development of crypto-currencies , crypto-assets and the increased risks in cyber-security;


### 18. agrees with christine lagarde that a review of the ecb’s monetary policy framework is timely and warranted in order to ensure that the ecb has the right tools to deliver on its price stability mandate in the future; calls on the ecb to organise a public consultation as part of this process in order to ensure that the review is open to input and feedback from a broad range of diverse civil society stakeholders; ### 18. disagrees with christine lagarde that a review of the ecb’s monetary policy framework is timely and warranted in order to ensure that the ecb has the "right tools" to deliver on its price stability mandate in the future; believes that the ecb has to radically moderate its ambitions and apply a strict reading of its own mandate;


### 18. agrees with christine lagarde that a review of the ecb’s monetary policy framework is timely and warranted in order to ensure that the ecb has the right tools to deliver on its price stability mandate in the future; calls on the ecb to organise a public consultation as part of this process in order to ensure that the review is open to input and feedback from a broad range of diverse civil society stakeholders; ### 18. agrees with the incoming ecb president that a review of the ecb’s monetary policy framework is timely and warranted in order to ensure that the ecb has the right tools to deliver on its price stability mandate in the future; calls on the ecb to organise a public consultation as part of this process in order to ensure that the review is open to input and feedback from a broad range of diverse stakeholders;


### 19. welcomes the increase in accountability under the presidency of mario draghi , and looks forward to even greater accountability , dialogue and openness with the incoming president; ### 19. looks forward to greater accountability , dialogue and openness with the incoming president , and takes note of her promises made regarding accountability and transparency issues during her hearing before the econ committee on the 4th of september 2019;


### 19. welcomes the increase in accountability under the presidency of mario draghi , and looks forward to even greater accountability , dialogue and openness with the incoming president; ### 19. expects the incoming ecb president to deliver on greater accountability , dialogue and openness in line with the commitments she made during her hearing before the european parliament's economic and monetary affairs committee on 4 september 2019;


### 20. recalls that the nominations of executive board members should be prepared carefully , with full transparency and together with parliament in line with the treaties; calls on the council to draw up a gender-balanced shortlist for all current and upcoming vacancies and to share it with parliament , thus allowing it to play a more meaningful advisory role in the appointment process; regrets that to date no satisfactory progress has been made; ### 20. recalls that the nominations of executive board members should be prepared carefully , with full transparency and together with parliament in line with the treaties;


### 5. deplores that eu member states were not able to agree on a joint approach regarding dst; ### 5. notes that eu member states were not able to agree on a joint approach regarding dst;


### 9. highlights the specificities of the single market which provides for the free movement of goods and services and therefore considers that any international corporate tax reform should ensure a smooth running of the single market , notably by safeguarding a level playing field for all firms , including paying a fair share of where the actual substantive and genuine economic activity and value creation take place; ### 9. highlights the specificities of the single market which provides for the free movement of goods and services and therefore considers that any international corporate tax reform should ensure a smooth running of the single market , notably by safeguarding a level playing field for smes and mnes , including paying a fair share of where the actual substantive and genuine economic activity and value creation take place;


### a. whereas the process of deepening the economic and monetary union requires a solid banking union as an indispensable building block to the euro area’s financial stability , as well as the creation of a mechanism of fiscal stabilisation for the euro area as a whole; ### a. whereas sound monetary policy which adheres strictly to its mandate of price stability as enshrined in article 127 (1) tfeu is an indispensable building block to the euro area’s financial stability;


### a. whereas the process of deepening the economic and monetary union requires a solid banking union as an indispensable building block to the euro area’s financial stability , as well as the creation of a mechanism of fiscal stabilisation for the euro area as a whole; ### a. whereas the process of deepening the economic and monetary union requires a solid banking union designed to be an indispensable building block to the euro area’s financial stability; whereas it does however not require the creation of a mechanism of fiscal stabilisation for the euro area as a whole as member states with access to financial markets can play such a shock-absorbing role themselves;


### b. whereas the banking union remains incomplete as long as it lacks a backstop for the single resolution fund (srf) and a european deposit insurance scheme (edis); ### b. whereas the banking union will further disintegrate due to moral hazard and lead to a permanent transfer union if mechanisms such as the backstop for the single resolution fund (srf) and a european deposit insurance scheme (edis) are implemented; regrets that insufficient progress in risk reduction in some member states serves as an argument for mutualisation of deposit insurance schemes , creating incentives for some member states not to reduce risk , or even engage in even more excessive risk-taking; points out that the absence of a proper impact assessment of the edis proposal is fundamentally at odds with the principles of sound governance;


### b. whereas the banking union remains incomplete as long as it lacks a backstop for the single resolution fund (srf) and a european deposit insurance scheme (edis); ### b. whereas , at least as long as risks differ greatly between national banking systems , the banking union risks being turned into a transfer union if complemented with a backstop for the single resolution fund (srf) and a european deposit insurance scheme (edis);


### c. whereas entrusting the ecb with the supervision of systemically important financial institutions has proven to be successful; ### c. whereas entrusting the ecb with the supervision of systemically important financial institutions has proven to be unsuccessful , according to the eba's risk dashboards , which clearly show that the 50% weakest banks in the euro area did not increase their solvency ratios since 2016 , and that the biggest banks are substantially worse of than smaller banks;


### c. whereas entrusting the ecb with the supervision of systemically important financial institutions has proven to be successful; ### c. whereas entrusting the ecb with the supervision of systemically important financial institutions led to continuing concerns regarding potential conflicts of interest between pursuing an independent monetary policy and prudential supervision;


### d. whereas the development of the single resolution mechanism (srm) was efficient; ### d. whereas the single resolution mechanism (srm) has to be terminated;


### d. whereas the development of the single resolution mechanism (srm) was efficient; ### d. whereas the single resolution mechanism (srm) aims at ensuring uniform rules and procedures and a common decision-making process for orderly resolution of failing banks with minimum impact on the real economy in order to fully safeguard public finances from the cost of bailing out banks;


### 1. recalls the progress made regarding the implementation of the banking union , namely on risk reduction; stresses , however , that further progress has to be made , particularly on risk sharing; ### 1. recalls the progress made regarding the implementation of the banking union , namely on risk reduction; stresses , however , that risk has only been marginally reduced , despite the favorable interest rate climate;


### 4. market data contributors shall not receive any remuneration for the market data provided other than the revenue sharing as referred to in article 27da(2) , point (c). ### 4. market data contributors shall receive remuneration for the market data provided to the ctp.


### the level of the fees that the applicant intends to charge to the different types of users of the core market data; ### the level of the fees that the applicant intends to charge to the different types of users of the core market data. such level of fees should be determined on the basis of a principle of reasonable commercial basis , specified by esma ;


### 4. the selection of the ctp for shares shall , in addition to the criteria in paragraph 2 , consider the revenue participation scheme , and in particular the formula , applicable to regulated markets that are market data contributors. esma shall , when considering the competing tenders , select the ctp for shares that offers the revenue participation scheme that provides regulated markets , in particular smaller regulated markets , with the highest amount of revenue that remains for distribution once deducted operating costs and a reasonable margin. this revenue shall be distributed in accordance with article 27h(1)(c) , and in a manner commensurate to the market data contributed according to article 22a. ### 4. the selection of the ctp for shares shall , in addition to the criteria in paragraph 2 , consider the revenue participation scheme , and in particular the formula , applicable to every execution venue. esma shall , when considering the competing tenders , select the ctp for shares that offers the revenue participation scheme that provides every execution venue , with the highest amount of revenue that remains for distribution once deducted operating costs and a reasonable margin. this revenue shall be distributed in accordance with article 27h(1)(c) , and in a manner commensurate to the market data contributed according to article 22a.


### 5. esma shall adopt a fully reasoned decision selecting and authorising the entities operating the consolidated tapes within 3 months as of initiation of the selection procedure referred to in paragraph 2. such reasoned decision shall specify the conditions under which the ctps shall operate , and in particular the level of fees referred to in paragraph 2 , point (g) and for shares the level of the participation referred to in paragraph 3 , in particular for smaller regulated markets. ### 5. esma shall adopt a fully reasoned decision selecting entities deemed suitable for operating the consolidated tapes , taking into account the revenue participation scheme applicable to every execution venue and inviting them to submit an application for authorization within six months from the initiation of the selection procedure referred to in paragraph 1.


### for the purpose of establishing the participation in point (c) , the revenue of the ctp shall be allocated among regulated markets according to a formula that reflects the proportion of pre-trade transparent liquidity in shares displayed by a regulated market relative to the average daily turnover in these shares in the union. ### for the purpose of establishing the revenue distribution in point (c) , of this paragraph , execution venues shall be allocated a higher share of the revenue of the ctp regulated markets according to a formula that reflects the proportion of pre-trade transparent liquidity in shares displayed by that execution venue relative to the average daily turnover in these shares in the union.


### 4. after 12 months of full operation of the ctp for shares , esma shall provide the commission with a motivated opinion on the effectiveness and fairness of the level of participation of regulated markets in the revenues generated by the ctp as set out in accordance with the second subparagraph of paragraph 1. the commission may request esma to provide further opinions , where necessary or appropriate. the commission shall be empowered to adopt a delegated act in accordance with article 50 to revise the allocation key for the revenue redistribution , where appropriate.; ### 4. after 12 months of full operation of the ctp for shares , esma shall provide the commission with an evidence-based motivated opinion on the effectiveness and fairness of the level of participation of market data contributors in the revenues generated by the ctp as set out in accordance with the second subparagraph of paragraph 1. the commission may request esma to provide further opinions , where necessary or appropriate. the commission shall be empowered to adopt a delegated act in accordance with article 50 to revise the allocation key for the revenue redistribution , where appropriate.;


### 4. after 12 months of full operation of the ctp for shares , esma shall provide the commission with a motivated opinion on the effectiveness and fairness of the level of participation of regulated markets in the revenues generated by the ctp as set out in accordance with the second subparagraph of paragraph 1. the commission may request esma to provide further opinions , where necessary or appropriate. the commission shall be empowered to adopt a delegated act in accordance with article 50 to revise the allocation key for the revenue redistribution , where appropriate.; ### 4. after 12 months of full operation of the ctp for shares , esma shall provide the commission with a motivated opinion on the effectiveness and fairness of the level of participation of each type of execution venue in the revenues generated by the ctp as set out in accordance with the second subparagraph of paragraph 1. the commission may request esma to provide further opinions , where necessary or appropriate. the commission shall be empowered to adopt a delegated act in accordance with article 50 to revise the allocation key for the revenue redistribution , where appropriate.;


### article 39a ### article 39a


### investment firms acting on behalf of clients shall not receive any fee or commission or non-monetary benefits from any third party for forwarding client orders to such third party for their execution.; ### investment firms executing orders on behalf of a retail client shall take all necessary steps to obtain the best possible price for their clients , net of costs relating to execution , which shall include all expenses directly related to the execution of the order , including execution venue fees , clearing and settlement fees and any other fees paid to third parties involved in the execution of the order.


### proposal for a ### proposal for a


### (32) financial intermediaries should strive to achieve the best possible price and the highest possible likelihood of execution for trades that they execute on behalf of their clients. to that end , financial intermediaries should select the trading venue or counterparty for executing their client trades solely on the basis of achieving best execution for their clients. it should be incompatible with that principle of best execution that a financial intermediary receives a payment from a trading counterpart in exchange for ensuring the execution of client trades. investment firms should be therefore be prohibited from receiving such payment. ### (32) financial intermediaries should strive to achieve the best possible price and the highest possible likelihood of execution for trades that they execute on behalf of their clients. to that end , financial intermediaries should select the trading venue or counterparty for executing their client trades solely on the basis of achieving best execution for their clients. it should be incompatible with that principle of best execution that a financial intermediary , when acting on behalf of its clients , receives a fee , a commission or any non-monetary benefit from a third party for routing client orders for execution by that third party as execution venue. investment firms should be therefore be prohibited from receiving such payment or other non-monetary benefit.


### the best bids and offers with corresponding volumes; ### for lit continuous trading mechanisms , the five best bids and offers prices with corresponding volumes available at those prices;


### (ii) the transaction price and volume executed at the stated price; ### (ii) for price-forming trades across all trading mechanisms , the transaction price and volume executed at the stated price , the transaction time , the trading protocol , applicable waivers and deferrals in accordance with the industry standard market model typology;


### — the time of execution of the trade; ### — the venue's time of execution of the trade or of amendment to the best bid or offer price or volume , amendment to the indicative price or volume , and amendment to the trading status of an instrument;


### — the time of publication of the trade; ### — the venue's time of publication of the trade , updated bid or offer price or volume , updated indicative price or volume , and amendment to the trading status of an instrument;


### — the receipt of market data from the market data contributors; ### — the consolidated tape provider's receipt of market data from the market data contributors;


### — the dissemination of consolidated market data to subscribers; ### — the dissemination by the consolidated tape provider of consolidated market data to subscribers;


### (7) in the context of the indirect subscription of internal mrel eligible instruments by resolution entities pursuant to the revised union bank resolution framework , intermediate parents should be required to deduct from their own internal mrel eligible resources the full holding of own funds and eligible liabilities issued by their subsidiaries belonging to the same resolution group. this ensures the proper functioning of the internal loss-absorbing and recapitalisation mechanisms within a group and avoids the double-counting of the internal mrel eligible resources of the subsidiary for the purposes of compliance by the intermediate parent with its own internal mrel. additionally , without those deductions , the individual solvency ratios of intermediate parents would not reflect appropriately and prudently their actual loss-absorbing capacity , as those ratios would also include the loss-absorbing capacity of their subsidiaries. this could compromise the proper implementation of the chosen resolution strategy , as the intermediate parent could use up not only its own loss absorption capacity but also that of its subsidiary , before the intermediate parent or the subsidiary are no longer viable. the deductions should first be applied to the eligible liabilities items of the intermediate parents. in case the amount to be deducted would exceed the amount of the eligible liabilities items of the intermediate parents , the remaining amount should be deducted from their tier 2 items. to ensure that the deduction regime remains proportionate , that regime should not be applicable in the exceptional cases where internal mrel is applied on a consolidated basis only. ### (7) in the context of the indirect subscription of internal mrel eligible resources by resolution entities pursuant to the revised union bank resolution framework , intermediate entities should be required to deduct their holding of internal mrel eligible resources issued by entities that are not themselves resolutions entities and which belong to the same resolution group up to an amount equivalent to the internal mrel requirements of such entities. this ensures the proper functioning of the internal loss-absorbing and recapitalisation mechanisms within a group and avoids the double-counting of the internal mrel eligible resources of those entities for the purposes of compliance by the intermediate entity with its own internal mrel. without those deductions , the proper implementation of the chosen resolution strategy could be compromised , as the intermediate entity could use up not only its own loss absorption and recapitalisation capacity but also that of other entities that are not themselves resolutions entities and which belong to the same resolution group , before the intermediate entity or those other entities are no longer viable. to ensure that the obligation to deduct is aligned with the scope of entities that may be used by the resolution entity for the indirect subscription of internal mrel eligible resources , and to avoid regulatory arbitrage , intermediate entities should deduct their holdings of internal mrel eligible resources issued by all entities belonging to the same resolution group and that may be subject to compliance with internal mrel , and not just the holdings of resources issued by their subsidiaries. the same obligations should apply in the case of indirect issuance of resources eligible for compliance with the requirement for own funds and eligible liabilities for material subsidiaries of non-eu g-siis laid down in article 92b of regulation (eu) no 575/2013 , where relevant.


### 5. institutions and entities required to comply with article 45c of directive 2014/59/eu that are not themselves resolution entities shall deduct from eligible liabilities items their holdings of own funds and eligible liabilities that meet the conditions of article 45f(2) of that directive of their subsidiaries that belong to the same resolution group. ### 5. institutions and entities shall deduct from eligible liabilities items their holdings of own funds instruments and eligible liabilities instruments where all of the following conditions are met:


### the deduction shall not apply to institutions and entities that are not themselves resolution entities where they are required to comply with the requirement referred to in articles 45c and 45d of directive 2014/59/eu on a consolidated basis. ### the deduction established in the first subparagraph shall be equal to the amount of own funds instruments and eligible liabilities instruments held by the institution or entity referred to in point (a) of the first subparagraph that have been issued by the institution or entity referred to in point (c) of the first subparagraph to comply with the requirement indicated by article 45c(7).


### for the purposes of this paragraph , the reference to eligible liabilities items shall also be understood as a reference to eligible liabilities referred to in article 45f(2) , point (a) , of directive 2014/59/eu.; ### for the purposes of this paragraph , the reference to eligible liabilities items shall be understood as a reference to any of the following:


### (2) it is acknowledged that undertakings with no minimal substance may be set up in a member state with the main objective of obtaining a tax advantage , notably by eroding the tax base of another member state. while some member states have developed a legislative or administrative framework to protect their tax base from such schemes , the relevant rules often have a limited effect , as they only apply in the territory of a single member state and do not effectively capture situations that involve more than one member state. furthermore , the national rules that apply in this field significantly differ across the union while some member states have no rules at all , to tackle the misuse of undertakings with no or minimal substance for tax purposes. ### (2) it is acknowledged that undertakings with no minimal substance may be set up in a member state with the main objective of obtaining a tax advantage , notably by eroding the tax base of another member state. while some member states have developed a legislative or administrative framework to protect their tax base from such schemes , the relevant rules often have a limited effect , as they only apply in the territory of a single member state and do not effectively capture situations that involve more than one member state. furthermore , the national rules that apply in this field significantly differ across the union while some member states have no rules at all , to tackle the misuse of undertakings with no or minimal substance for tax purposes. it is therefore important to create a union-wide legal approach to ensure a framework for loyal and fair tax competition and safeguard the integrity of the internal market.


### (5) to ensure the proper functioning of the internal market , the proportionality and effectiveness of potential rules , it would be desirable to limit their scope to undertakings which are at risk of being found to lack minimal substance and used with the main objective of obtaining a tax advantage. it would therefore be important to establish a gateway criterion , in the form of a set of three cumulative , indicative conditions , in order to conclude which undertakings are sufficiently at risk as aforementioned to justify that they be subjected to reporting requirements. a first condition should enable the identification of undertakings presumably engaged mainly in geographically mobile economic activities , as the place where such activities are actually carried out is usually more challenging to identify. such activities normally give rise to important passive income flows. hence , undertakings , which income consists predominantly of passive income flows would meet this condition. it should also be taken into account that entities holding assets for private use , such as real estate , yachts , jets , artworks , or equity alone , may have no income for longer periods of time , but still enable significant tax benefits by way of owning those assets. as purely domestic situations would not pose a risk for the good functioning of the internal market and would be best addressed at domestic level , a second condition should focus on undertakings engaged in cross-border activities. engagement in cross-border activities should be established having regard , on the one hand , to the nature of the transactions of the undertaking , domestic or foreign , and on the other , to its property , given that entities that only hold assets for private , non-business , use may not engage in transactions for a considerable time. additionally , a third condition should point out to those undertakings which have no or inadequate own resources to perform core management activities. in this regard , undertakings that do not have adequate own resources tend to engage third party providers of administration , management , correspondence and legal compliance services or enter into relevant agreements with associated enterprises for the supply of such services in order to set up and maintain a legal and tax presence. outsourcing of certain ancillary services only , such as bookkeeping services alone , while core activities remain with the undertaking , would not suffice in itself for an undertaking to meet this condition. while such service providers might be regulated for other , non-tax purposes , their obligations for such other purposes cannot always mitigate the risk that they enable the set up and maintenance of undertakings misused for tax avoidance and evasion practices. ### (5) to ensure the proper functioning of the internal market , the proportionality and effectiveness of potential rules , it would be desirable to limit their scope to undertakings which are at risk of being found to lack minimal substance and used mainly to obtain a tax advantage. it would therefore be important to establish a gateway criterion , in the form of a set of three cumulative , indicative conditions , in order to conclude which undertakings are sufficiently at risk as aforementioned to justify that they be subjected to reporting requirements. undertakings should do the gateway test themselves in the form of a self-assessment. a first condition should enable the identification of undertakings presumably engaged mainly in geographically mobile economic activities , as the place where such activities are actually carried out is usually more challenging to identify. such activities normally give rise to important passive income flows. hence , undertakings , which income consists predominantly of passive income flows would meet this condition. it should also be taken into account that entities holding assets for private use , such as real estate , yachts , jets , art , or equity alone , may have no income for longer periods of time , but still enable significant tax benefits by way of owning those assets. as purely domestic situations would not pose a risk for the good functioning of the internal market and would be addressed at domestic level , a second condition should focus on undertakings engaged in cross-border activities. engagement in cross-border activities should be established as having regard , on the one hand , to the nature of the transactions of the undertaking , domestic or foreign , and on the other , to its property , given that entities that only hold assets for private use may not engage in transactions for a considerable time. additionally , a third condition should point out to those undertakings which have no or inadequate own resources to perform core management activities. in this regard , undertakings that do not have adequate own resources tend to engage third party providers of administration , management , correspondence and legal compliance services or enter into relevant agreements with associated enterprises for the supply of such services in order to set up and maintain a legal and tax presence. outsourcing of certain ancillary services only , such as bookkeeping services , while core activities remain with the undertaking , would not suffice in itself for an undertaking to meet this condition. while such service providers might be regulated for other , non-tax purposes , their obligations for such other purposes cannot always mitigate the risk that they enable the set up and maintenance of undertakings misused for tax avoidance and evasion practices.


### (13) to ensure effectiveness of the proposed framework , it is necessary to establish appropriate tax consequences for undertakings that do not have minimal substance for tax purposes. undertakings that have crossed the gateway criterion and are presumed to be lacking substance for tax purposes while , additionally , have not provided evidence to the contrary or evidence that they do not serve the objective of obtaining a tax advantage , should not be allowed to benefit from the provisions of agreements and conventions that provide for the elimination of double taxation of income , and where applicable , capital , to which the member state of their tax residence is a party and from any other agreements , including provisions in international agreements for the promotion and protection of investments , with equivalent purpose or effect. such undertakings should not be allowed to benefit from council directive 2011/96/eu14 and council directive 2003/49/ec15. to this effect , those undertakings should not be entitled to a certificate of tax residence to the extent that this serves to obtain those benefits. the member state where the undertaking is resident for tax purposes should therefore deny to issue a certificate of tax residence. alternatively , that member state should be able to issue such certificate while indicating , by means of a warning , that it should not be used by the undertaking to obtain tax benefits as above. this denial of a certificate of tax residence , or alternatively the issue of a special certificate of tax residence , should not set aside the national rules of the member state of the undertaking with regard to the tax residence and relevant obligations linked thereto. it would rather serve to communicate to other member states , and third countries , that no relief or refund should be granted with regard to transactions involving this undertaking based on any treaty with the member state of the undertaking or union directives , if applicable. ### (13) to ensure effectiveness of the proposed framework , it is necessary to establish appropriate tax consequences for undertakings that do not have minimal substance for tax purposes . undertakings that have crossed the gateway criterion and are presumed to be lacking substance for tax purposes while also not having disproven that they are attempting to obtain a tax advantage should not be allowed to benefit from the elimination of double taxation of income and , where applicable , capital. these undertakings may neither benefit from provisions stipulated by relevant international agreements for the promotion and protection of investments , nor may they benefit from any other agreements , including provisions in international agreements for the promotion and protection of investments , with equivalent purpose or effect. such undertakings should not be allowed to benefit from council directive 2011/96/eu14and council directive 2003/49/ec15. to this effect , those undertakings should not be entitled to a certificate of tax residence to the extent that this serves to obtain those benefits. the member state where the undertaking is resident for tax purposes should therefore refuse to issue a certificate of tax residence and issue a warning statement detailing the grounds on which the decision was based. this denial of a certificate of tax residence should not set aside the national rules of the member state of the undertaking with regard to the tax residence and relevant obligations linked thereto. it would rather serve to communicate to other member states , and third countries , that no relief or refund should be granted with regard to transactions involving this undertaking based on any treaty with the member state of the undertaking or union directives , if applicable.


### (16) in order to improve effectiveness , member states should lay down penalties against the violation of the national rules that transpose this directive. such penalties should be effective , proportionate and dissuasive. to ensure tax certainty and a minimum level of coordination across all member states , it is necessary to fix a minimum monetary penalty , also taking into account the situation of each specific undertaking. the envisaged rules rely on self-assessment by the undertakings as regards whether or not they meet the gateway criteria. to achieve effectiveness of the provisions , incentivising adequate compliance across the union , and taking into account that a shell undertaking in one member state may be used to erode the tax base of another member state , it is important that any member state has the right to request another member state to conduct tax audits of undertakings at risk for not fulfilling minimum substance as defined in this directive. accordingly , to reinforce effectiveness , it is essential that the requested member state has an obligation to carry out such audit and to share information on the outcome , even where there is no finding of ‘shell’ entity. ### (16) in order to improve effectiveness , member states should lay down penalties against the violation of the national rules that transpose this directive. such penalties should be effective , proportionate and dissuasive. to ensure tax certainty and a minimum level of coordination across all member states , it is necessary to fix a minimum monetary penalty , also taking into account the situation of each specific undertaking. the envisaged rules rely on a self-assessment performed by the undertakings to determine whether or not they meet the gateway criteria. to achieve effectiveness of the provisions , incentivising adequate compliance across the union , and taking into account that a shell undertaking in one member state may be used to erode the tax base of another member state , it is important that any member state has the right to request another member state to conduct tax audits of undertakings at risk of not fulfilling minimum substance as defined in this directive. accordingly , to reinforce effectiveness , it is essential that the requested member state has an obligation to carry out such an audit and to share information on the outcome , even where there is no finding of a ‘shell’ entity. joint audits allow for the pooling of expertise , thereby ensuring a complete picture of the facts and promoting acceptance of the audit results. council directive (eu) 2021/5141a created a uniform framework for joint audits and where appropriate , this is the metric that may be used.


### in the preceding two tax years , the undertaking outsourced the administration of day-to-day operations and the decision-making on significant functions. ### in the preceding two tax years , the undertaking outsourced the administration of day-to-day operations and the decision-making on significant functions to an entity that is not an associated enterprise within the same jurisdiction as the undertaking in question.


### undertakings with at least five own full-time equivalent employees or members of staff exclusively carrying out the activities generating the relevant income; ### undertakings working in the jurisdiction where the undertaking is resident for tax purposes;


### c. whereas the problems of the banking sector may worsen after the temporary support measures introduced during the covid-19 crisis are lifted; ### c. whereas the banking sector has so far been highly resilient to the covid-19 crisis , but there is a risk that its situation , especially with regard to npls , may worsen after the temporary support and business protection measures introduced during the covid-19 crisis by the governments of individual member states are lifted;


### f. whereas there are numerous challenges to the digitalisation of finance; ### f. whereas there are numerous challenges to the digitalisation of finance , in particular the need to combat cybercrime , which threatens the security of customers;


### 1. recalls that one goal of the bu is the security of the banking system and the prevention of bank bailouts by taxpayers; supports efforts to strengthen the bu; stresses that a solid bu will result in increased confidence in the banking sector; ### 1. recalls that the goal of the bu is the security of the banking system and the prevention of bank bailouts by taxpayers; stresses that increased confidence in the banking sector requires accelerated efforts by various member states to reduce their high levels of non-performing loans and to prevent their increase in the future;


### 1. recalls that one goal of the bu is the security of the banking system and the prevention of bank bailouts by taxpayers; supports efforts to strengthen the bu; stresses that a solid bu will result in increased confidence in the banking sector; ### 1. recalls that the core goal of the bu is the security and stability of the banking system and the prevention of bank bailouts by taxpayers; supports efforts to strengthen the bu; stresses that a solid bu will result in increased confidence in the banking sector and contribute to improving its health;


### 2. considers that the bu should be built in a friendly and attractive way , including for member states outside the euro area; ### 2. considers that the bu should be built in a friendly and attractive way , including for member states outside the euro area; points out that member states not belonging to the bu are also bound by the rules of the so-called single rulebook , which arose as a result of the process of harmonisation and integration of the european banking system , and that their banking systems are de facto strongly linked to the bu;


### 3. stresses that the relatively good performance of banks during the covid-19 crisis is related to the policies implemented by the member states during the pandemic , as well as to temporary measures under regulation (eu) 575/2013 (capital requirements regulation); ### 3. stresses that the banking sector has shown a relatively high degree of resilience to the covid-19 crisis and has played an important role in minimising its negative impact on the economy , including through loan repayment moratoria; points out , however , that emergency measures implemented by the member states during the pandemic , as well as temporary measures under regulation (eu) 575/2013 (capital requirements regulation) , have also had an indirect impact on the health of the banking sector;


### 4. recalls the key role of the eu banking sector in financing the recovery of the european economy; ### 4. recalls that the main challenge for the eu banking sector will be to ensure access to credit and to support the real economy during the recovery of the european economy , in the context of the phasing out of emergency support measures and a return to tighter capital requirements;


### 5. notes that the eba , the ecb and the srb still see many problems in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these problems are likely to increase after the withdrawal of the emergency measures; ### 5. notes that the eba , the ecb and the srb still see many challenges facing the banking system , such as relatively high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , shortcomings in credit risk management and the governance capabilities of governing bodies , shortcomings in cyber resilience and in digital transition strategies , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these problems may increase after the withdrawal of the emergency measures;


### 6. supports ongoing work on the implementation of the basel iii rules; ### 6. supports ongoing work on the legislation finalising the implementation of the basel iii rules; stresses , in this context , that the solutions laid down in basel iii rules , including as regards output floors , should be implemented as strictly as possible;


### 7. notes that the banking sector is adapting to the challenges of digitalisation; stresses the need for further investments , research and adequate regulations; appreciates the work on the digital finance package; considers that the priority should be customer safety , inclusiveness and technological neutrality; observes with interest the work on the digital euro; ### 7. notes that the banking sector is adapting to the challenges of digitalisation; stresses the need for further investments , research and adequate regulations; appreciates the work on the digital finance package; considers that the priority should be customer safety and the protection of their funds and data , greater eu involvement in the development of a legal framework that facilitates the banking sector’s fight against cybercrime and the exchange of information in this regard , inclusiveness and technological neutrality; observes with interest the work on the digital euro;


### 9. notes that there is a prospect of gradually phasing out emergency measures and returning to pre-covid-19 capital requirements; ### deleted


### 10. considers the reduction of npls should remain a priority; warns that their number is likely to increase rapidly after the withdrawal of emergency support measures; draws attention to the importance of prudential compliance , early identification and proactive management of npls; ### 10. considers the reduction of npls should remain a priority; warns that , although the situation is stable for the time being , their number is likely to increase rapidly after the withdrawal of emergency support measures , especially for smes; draws attention to the importance of prudential compliance , early identification and proactive management of npls; stresses the need for cooperation with vulnerable debtors , while acknowledging the solutions put in place by the banking sector in this regard during the pandemic (such as a moratorium on loan repayments); welcomes the adoption of the directive on credit servicers and credit purchasers , which will help banks to reduce the number of npls on their balance sheets;


### 11. is concerned about the rising level of sovereign debt on the balance sheets of banks in the bu; notes that government bonds are not risk-free assets and that risks are differentiated; emphasises that the issue of regulatory treatment of sovereign exposures requires an in-depth examination of the consequences of different approaches; ### 11. is concerned about the rising level of sovereign debt on the balance sheets of banks in the bu; notes that government bonds are not risk-free assets and that risks are differentiated; emphasises that the issue of regulatory treatment of sovereign exposures (rtse) , given the complexity of the issue , requires an in-depth examination of the consequences of different approaches , both from the perspective of the banking sector and in terms of the assessment of sovereign bond market liquidity; believes that any potential solution should be balanced and treat all eu member states fairly (in particular , without penalising non-euro area government issuers);