### – ‘ maximum sustainable yield’ means the maximum catch that may be taken from a fish stock indefinitely ; ### – ‘ maximum sustainable yield’ means the maximum catch that may continuously be taken from a fish stock , in the light of relevant environmental , social and economic factors , without affecting the process of fish reproduction ;


### – ‘ maximum sustainable yield’ means the maximum catch that may be taken from a fish stock indefinitely ; ### – ‘ maximum sustainable yield’ means the average maximum equilibrium catch that may be taken from a fish stock or marine biological resource , or from a mixed fishery for the whole of the catches of all species taken together ;


### – ‘ maximum sustainable yield’ means the maximum catch that may be taken from a fish stock indefinitely ; ### – ' maximum sustainable yield ' means the highest theoretical equilibrium yield that can be continuously taken from a stock under existing environmental conditions without affecting significantly the reproduction process ;


### ‘ maximum sustainable yield’ means the maximum catch that may be taken from a fish stock indefinitely ; ### « ‘ maximum sustainable yield’ means the maximum catch that may be taken from a fish stock indefinitely under certain environmental conditions , without substantially affecting reproduction ;


### – ‘ sustainable fisheries agreements’ mean international agreements concluded with another state for the purpose of obtaining access to resources or waters in exchange for financial compensation from the union . ### – ‘ sustainable fisheries agreements’ mean international agreements concluded with another state for the purpose of obtaining access to resources or waters in exchange for a financial contribution from the union .


### measures for the conservation of marine biological resources ### measures for the conservation and sustainable exploitation of marine biological resources


### fishing opportunities ### allocation of fishing opportunities


### technical measures ### procedure for the adoption of technical measures


### fishing mortality rates , and / or ### fishing mortality rates ,


### a multiannual plan shall include : ### a multiannual plan shall be based on scientific evidence and shall take account of the possible social and economic consequences . it shall include :


### fishing opportunities allocated to member states shall ensure each member state relative stability of fishing activities for each fish stock or fishery . the interests of each member state shall be taken into account when new fishing opportunities are allocated . ### the council , acting by qualified majority on a proposal from the commission , shall decide on catch and / or fishing effort limits and on the allocation of fishing opportunities among member states as well as the conditions associated with those limits . fishing opportunities shall be distributed among member states in such a way as to assure each member state relative stability of fishing activities for each stock or fishery . 2 . the interests of each member state shall be taken into account when the union establishes new fishing opportunities , with the council deciding how those opportunities are to be allocated . 3 . each member state shall decide , for vessels flying its flag , on the method of allocating the fishing opportunities assigned to that member state in accordance with community law . it shall inform the commission of the allocation method . 4 . the council shall establish the fishing opportunities available to third countries in community waters and allocate those opportunities to each third country . 5 . member states may , after notifying the commission , exchange all or part of the fishing opportunities allocated to them .


### fishing opportunities shall comply with quantifiable targets , time frames and margins established in accordance with article 9 and 11 , and . ### fishing opportunities shall comply with quantifiable targets , time frames and margins established in accordance with article 9 and 11 and .


### in a multiannual plan established pursuant to articles 9 , 10 and 11 member states may be authorised to adopt measures , in accordance with that multiannual plan , which specify the conservation measures applicable to vessels flying their flag in relation to stocks in union waters for which they have been allocated fishing opportunities . ### in a multiannual plan established pursuant to articles 9 , 10 and 11 , member states which have a direct interest in the fishery concerned shall participate , in close cooperation with the competent advisory councils , in drafting conservation measures suited to the specificities of each fishery which accord with that multiannual plan .


### member states shall ensure that conservation measures adopted pursuant to paragraph 1 : ### member states which have a direct interest in the fishery concerned shall ensure , in close cooperation with the competent advisory councils , that conservation measures adopted pursuant to paragraph 1 :


### are no less stringent than those existing in union legislation . ### do not conflict with and are coherent with those existing in union legislation .


### requirements for fishing vessels to cease operating in an area for a defined minimum period in order to protect a temporary aggregation of a vulnerable marine resource ; ### requirements for fishing vessels to cease operating in an area temporarily and for a defined minimum period in order to protect a temporary aggregation of a vulnerable marine resource ;


### member states adopting conservation measures pursuant to article 17 shall notify the commission , other interested member states and relevant advisory councils of such measures . ### member states adopting conservation measures pursuant to article 17 shall notify the commission , other interested member states and relevant advisory councils , which shall take part in the decision - making process relating to such measures .


### member states adopting technical measures pursuant to article 21 shall notify the commission , other interested member states and relevant advisory councils of such measures . ### member states adopting technical measures pursuant to article 21 shall notify the commission , other interested member states and relevant advisory councils , which shall take part in the decision - making process relating to such measures .


### a member state may take non - discriminatory measures for the conservation and management of fish stocks and to minimise the effect of fishing on the conservation of marine eco - systems within 12 nautical miles of its baselines provided that the union has not adopted measures addressing conservation and management specifically for that area . the member state measures shall be compatible with the objectives set out in articles 2 and 3 and no less stringent than those in existing union legislation . ### a member state may take non - discriminatory measures for the conservation and management of fish stocks and to minimise the effect of fishing on the conservation of marine eco - systems within 12 nautical miles of its baselines provided that the union has not adopted measures addressing conservation and management specifically for that area or specifically addressing the problem identified by the member state in question . the member state measures shall be compatible with the objectives set out in articles 2 and 3 and shall not conflict with and shall be coherent with those in existing union legislation .


### member states shall make available to the commission the information referred to in paragraph 1 . ### member states shall make available to the commission , on request , the information referred to in paragraph 1 .


### member states shall collect biological , technical , environmental and socio - economic data necessary for ecosystem based fisheries management , manage them and make them available to end users of scientific data , including bodies designated by the commission . those data shall in particular enable the assessment of : ### member states shall collect biological , technical , environmental and socio - economic data , paying due account to regionalisation criteria , necessary for ecosystem based fisheries management , manage them and make them available to regional authorities and end users of scientific data , including bodies designated by the commission . those data shall in particular enable the assessment of :


### avoid duplication of data collection for different purposes ; ### set up coordination mechanisms with a view to avoiding duplication of data collection for different purposes ;


### member states shall ensure the national coordination of the collection and management of scientific data for fisheries management . to this end , they shall designate a national correspondent and organize an annual national coordination meeting . the commission shall be informed of the national coordination activities and be invited to the coordination meetings . ### member states shall ensure the national coordination of the collection and management of scientific and socio - economic data for fisheries management . regionalisation criteria will be introduced into national planning for data collection and management , thereby encouraging the involvement of regional authorities . the involvement of both the fisheries sector and local research centres in the collection of scientific data will be encouraged . to this end , they shall designate a national correspondent and organise an annual national coordination meeting . the commission shall be informed of the national coordination activities and be invited to the coordination meetings .


### member states shall coordinate their data collection activities with other member states in the same region , and make every effort to coordinate their actions with third countries having sovereignty or jurisdiction over waters in the same region . ### the commission shall ensure that data collection activities carried out by different member states in the same region are coordinated , and make every effort to coordinate their actions with third countries having sovereignty or jurisdiction over waters in the same region .


### member states shall adopt national fisheries scientific data collection , research and innovation programmes . they shall coordinate their fisheries data collection , research and innovation activities with other member states and union research and innovation frameworks . ### member states , together with the commission shall entrust accredited bodies with the task of drawing up national and cross - border fisheries scientific data collection , research and innovation programmes . they shall coordinate their fisheries data collection , research and innovation activities with other member states and union research and innovation frameworks .


### sustainable fisheries agreements with third countries shall establish a legal , economic and environmental governance framework for fishing activities carried out by union fishing vessels in third country waters . ### sustainable fisheries agreements of an essentially commercial nature with third countries shall establish a legal , economic and environmental governance framework for fishing activities carried out by union fishing vessels in third country waters .


### financial assistance ### financial contribution


### establish the governance framework , including the development and maintenance of the necessary scientific and research institutions , monitoring , control and surveillance capability and other capacity building items pertaining to the development of a sustainable fisheries policy driven by the third country . such financial assistance shall be conditioned upon the achievement of specific results . ### also establish the governance framework , including the development and maintenance of the necessary scientific and research institutions , monitoring , control and surveillance capability and other capacity building items pertaining to the development of a sustainable fisheries policy driven by the third country . such financial assistance shall be conditioned upon the achievement of specific results .


### multiannual national strategic plans shall aim in particular at the following : ### multiannual regional and national strategic plans shall aim in particular at the following :


### the use of modern control technologies for the availability and quality of data on fisheries ; ### more efficient use of systems already on board each fishing vessel and , where necessary , the use of modern control technologies for the availability and quality of data on fisheries ;


### the development of a culture of compliance among operators ; ### the development of a culture of compliance and cooperation among operators


### advisory councils may : ### advisory councils must :


### the commission and , where relevant , the member state concerned , shall reply within a reasonable time period to any recommendation , suggestion or information received pursuant to paragraph 1 . ### the commission and , where relevant , the member state concerned shall reply within not more than 30 days , and in any event before final measures or acts have been adopted , to any recommendation , suggestion or information received pursuant to paragraph 1 .


### advisory councils may apply for union financial assistance as bodies pursuing an aim of general european interest . ### advisory councils may apply for union financial assistance under the emff covering both administrative technical and scientific costs associated with carrying out studies to underpin their recommendations .


### the delegation of power referred to in articles 12 , 15 , 20 and , 24 and , 35 , 36 , 37 , 47 , 52 , 54 shall be conferred for an indeterminate period of time from 1 january 2013 . ### the delegation of power referred to in articles 12 , 36 , 37 , 47 and 52 shall be conferred for an indeterminate period of time from 1 january 2013 .


### the aim of the programme is to support the policy objective of placing the empowered consumer at the centre of the internal market . the programme will do so by contributing to protecting the health , safety and economic interests of consumers , as well as to promoting their right to information , education and to organise themselves in order to safeguard their interests . the programme will complement , support and monitor the policies of member states . ### the aim of the programme is to support the policy objective of placing the empowered consumer at the centre of the internal market . the programme will do so by contributing to protecting the health , safety and economic and legal interests of consumers , as well as to promoting their right to information , education and to organise themselves in order to safeguard their interests . the programme will complement , support and monitor the policies of member states .


### objective 2 - information and education : to improve consumers ' education , information and awareness of their rights , to develop the evidence base for consumer policy and to provide support to consumer organisations . ### objective 2 - information and education : to improve consumers ' as well as smes ' education , information and awareness of their rights , to develop the evidence base for consumer policy and to provide support to consumer organisations .


### objective 3 - rights and redress : to consolidate consumer rights in particular through regulatory action and improving access to redress including alternative dispute resolution . ### objective 3 - rights and redress : to strengthen consumer rights in particular through regulatory action and improving access to redress especially by alternative dispute resolution .


### according to the commission report and to the commission communication , the administrative burden associated with obligations linked to admission to trading on regulated markets should be reduced for small and medium - sized issuers in order to improve their access to capital . the obligations to publish interim management statements or quarterly financial reports represent an important burden for issuers whose securities are admitted to trading on regulated markets , without being necessary for investor protection . they also encourage short - term performance and discourage long - term investment . in order to encourage sustainable value creation and long - term oriented investment strategy it is essential to reduce short - term pressure on issuers and to give investors incentive to adopt a longer term vision . the requirement to publish interim management statements should therefore be abolished . ### according to the commission report and to the commission communication , the administrative burden associated with obligations linked to admission to trading on regulated markets should be reduced for small and medium - sized issuers in order to improve their access to capital . the obligations to publish interim management statements or quarterly financial reports represent an important burden for small and medium - sized issuers whose securities are admitted to trading on regulated markets , without being necessary for investor protection . they also encourage short - term performance and discourage long - term investment . in order to encourage sustainable value creation and long - term oriented investment strategy it is essential to reduce short - term pressure on issuers and to give investors incentive to adopt a longer term vision . the requirement to publish interim management statements should therefore be abolished for small and medium - sized issuers .


### in order to provide for enhanced transparency of payments made to governments , issuers whose securities are admitted to trading on a regulated market and which have activities in the extractive or logging of primary forest industries should disclose in a separate report on an annual basis payments made to governments in the countries in which they operate . the report should include types of payments comparable to those disclosed under the extractive industries transparency initiative and provide civil society with information to hold governments of resource - rich countries to account for their receipts from the exploitation of natural resources . the initiative is also complementary to the eu flegt action plan and the timber regulationwhich require traders of timber products to exercise due diligence in order to prevent illegal wood from entering into the eu market . the detailed requirements are defined in chapter 9 of directive 2011 / . . . / eu of the european parliament and of the council . ### in order to provide for enhanced transparency of payments made to governments , large issuers whose securities are admitted to trading on a regulated market should disclose activities in each country in which they operate , including annual payments made to governments in the countries in which they operate . the threshold for considering issuers to be large should be based on double the threshold for smes in the standard eu definition . the disclosure of these data aims at enabling investors to make better - informed decisions , improving corporate governance and accountability , contributing to containing tax evasion and providing civil society with information to hold governments of resource - rich countries to account for their receipts from the exploitation of natural resources . disclosures should be incorporated on a country - by - country basis . disclosures should be part of the annual financial statement and include types of payments comparable to those disclosed under the extractive industries transparency initiative and should be on a country - by - country and in the case of issuers engaged in activities related to extractive or forest industries on a project - by - project basis , where a project means a contract , licence , lease or other legal agreement under which an issuer operates , and which gives rise to specific revenue liabilities . for all issuers , disclosures should include turnover of the constituent entities of the undertaking that might give rise to payments and , on a per - country basis , quantities produced , purchases and sales , profit before tax , actual tax payments , effective tax rates , deferred taxation liabilities for the country at the start and close of each accounting period , total number of people employed and their aggregate remuneration and expenditure on fixed asset investment during the course of the reporting period . the detailed requirements are defined in chapter 9 of directive 2011 / . . . / eu of the european parliament and of the council .


### a harmonised regime for notification of major holdings of voting rights , especially regarding aggregation of holdings of shares with holdings of financial instruments , should improve legal certainty , enhance transparency and reduce administrative burden for cross - border investors . member states should therefore not be allowed to adopt stricter or divergent rules in that area than those provided in directive 2004 / 109 / ec . however , taking into account the existing differences in ownership concentration in the union , member states should continue to be allowed to set lower thresholds for notification of holdings of voting rights . ### a harmonised regime for notification of major holdings of voting rights , especially regarding aggregation of holdings of shares with holdings of financial instruments , should improve legal certainty , enhance transparency and reduce administrative burden for cross - border investors . member states should therefore not be allowed to adopt stricter rules in that area than those provided in directive 2004 / 109 / ec . however , taking into account the existing differences in ownership concentration in the union , member states should continue to be allowed to set lower thresholds for notification of holdings of voting rights . member states should also be able to continue to apply laws , regulations or administrative provisions adopted in relation to take - over bids , merger transactions and other transactions affecting the ownership or control of companies regulated by the supervisory authorities appointed by member states pursuant to article 4 of directive 2004 / 25 / ec of the european parliament and of the council of 21 april 2004 on takeover bids1 that impose disclosure requirements more stringent than those in directive 2004 / 109 / ec . _______________ 1 oj l 142 , 30 . 4 . 2004 , p . 12 .


### in order to take account of technical developments , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission to modify the method to calculate the number of voting rights relating to financial instruments , to specify the types of financial instruments subject to notification requirements and to specify the contents of notification of major holdings of financial instruments . it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level . the commission , when preparing and drafting up of delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the european parliament and the council . ### in order to take account of technical developments , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission to specify the contents of notification of major holdings of financial instruments . it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level . the commission , when preparing and drafting up of delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the european parliament and the council .


### in order to improve compliance with the requirements of directive 2004 / 109 / ec and following the communication from the commission of 9 december 2010 entitled ‘ reinforcing sanctioning regimes in the financial sector’ , the sanctioning powers of competent authorities should be enhanced and should satisfy certain essential requirements . in particular , competent authorities should be able to suspend the exercise of voting rights for holders of shares and financial instruments who do not comply with the notification requirements and to impose pecuniary sanctions which are sufficiently high to be dissuasive . to ensure sanctions have a dissuasive effect on the public at large , sanctions should normally be published , except in certain well - defined circumstances . ### in order to improve compliance with the requirements of directive 2004 / 109 / ec and following the communication from the commission of 9 december 2010 entitled ‘ reinforcing sanctioning regimes in the financial sector’ , the sanctioning powers of competent authorities should be enhanced and should satisfy certain essential requirements . in particular , competent authorities should be able to suspend in case of most serious and non - negligent breaches the exercise of voting rights for holders of shares and financial instruments who do not comply with the notification requirements insofar as those voting rights exceed the notification thresholds and to impose pecuniary sanctions which are sufficiently high to be dissuasive . to ensure sanctions have a dissuasive effect on the public at large , sanctions may be published , except in certain well - defined circumstances .


### in case of depository receipts admitted to trading on a regulated market , the issuer means the issuer of the securities represented , whether those securities are admitted to trading on a regulated market or not ; ### in case of depository receipts admitted to trading on a regulated market , the issuer means the issuer of the securities represented , whether those securities are admitted to trading on a regulated market or not . by 31 december 2012 , the commission shall submit a report to the european parliament and the council analysing different options for a definition of european small and medium - sized issuers ;


### ' article 6 report on payments to governments member states shall require issuers active in the extractive or logging of primary forest industries , as defined in [ … ] to prepare , in accordance with chapter 9 of directive 2011 / . . . / eu of the european parliament and of the council , a report on payments made to governments on an annual basis . the report shall be made public at the latest six months after the end of each financial year and shall remain publicly available for at least five years . payments to governments shall be reported at consolidated level . ### ' article 6 country by country reporting member states shall require issuers to prepare , in accordance with chapter 9 of directive 2011 / . . / eu of the european parliament and of the council , a report on activities in each country in which they operate , including of payments exceeding eur 30 000 in total made to governments , on an annual basis where those issuers meet or exceed two of the following criteria : balance sheet total : eur 100 000 000 ; b ) net turnover : eur 100 000 000 ; c ) employment on balance sheet date of 500 people or more . for issuers active in the extractive or logging of primary forest industries , the report shall include the reporting of all projects specified in [ article 38 of the accounting directive ] , where a project means a contract , licence , lease or other legal agreement under which an issuer operates , and from which its specific revenue liabilities arise . the report shall be subject to statutory audit . the report shall be made public at the latest six months after the end of each financial year and shall remain publicly available for at least five years . the report shall be prepared at consolidated level . for all issuers , disclosures should include turnover of the constituent entities of the undertaking that might give rise to payments and , on a per - country basis , quantities produced , purchases and sales , profit before tax , actual tax payments , effective tax rates , deferred taxation liabilities for the country at the start and close of each accounting period , total number of people employed and their aggregate remuneration and expenditure on fixed asset investment during the course of the reporting period .


### esma shall develop draft regulatory technical standards to specify the method to calculate the number of voting rights referred to in the first subparagraph in case of financial instruments referenced to a basket of shares or an index . ### esma shall develop draft regulatory technical standards to specify the method to calculate the number of voting rights referred to in the first subparagraph .


### power is delegated to the commission to adopt the regulatory technical standards referred to in the third subparagraph of this paragraph in accordance with articles 10 to 14 of regulation no 1095 / 2010 . ### the commission shall be empowered to adopt , by means of delegated acts in accordance with article 27 , and , and subject to the conditions of articles 27a and 27b , measures to specify the method of calculation of the 5 % threshold referred to in point of that subparagraph in case of a group of companies , taking into account article 12 and .


### rules concerning the interoperability of the information and communication technologies used by the national officially appointed mechanisms and the access to regulated information at the union level , as referred to in paragraph 2 . ### rules to ensure the interoperability of the information and communication technologies used by the national officially appointed mechanisms and the access to regulated information at the union level , as referred to in paragraph 2 .


### without prejudice to the supervisory powers of competent authorities in accordance with article 24 , member states shall ensure that in the cases referred to in paragraph 1 of this article , the administrative sanctions and measures that can be applied include at least the following : ### without prejudice to the powers of competent authorities in accordance with article 24 and the right of the member states to impose administrative and criminal sanctions , member states shall ensure that in the cases referred to in paragraph 1 of this article , the administrative sanctions and measures that can be applied include at least the following :


### noise assessments should build on existing information available and ensure that such information is reliable and accessible to competent authorities and stakeholders . competent authorities should put in place the necessary monitoring and enforcement tools . ### in accordance with directive 2002 / 49 / ec , noise assessments should be based on objective and measurable criteria common to all the member states . this information must be reliable , obtained in a transparent manner , comparable and accessible to all stakeholders . assessments should include monitoring of the latest technological developments and exchanges of the latest findings concerning the procedures to be employed . competent authorities should put in place the necessary monitoring and enforcement tools . noise assessments should be carried out or supervised by outside agencies independent of the airport operator .


### identify measures available to reduce the noise impact ; ### identify measures available to reduce the noise impact , including the more effective use of existing time slots through the introduction of larger aircraft , a reduction in the number of uneconomic feeder flights which take up time slots and a greater focus on point - to - point routes in order to reduce the number of feeder flights operated with small aircraft ;


### measures or a combination of measures taken in accordance with this regulation for a given airport shall not be more restrictive than necessary to achieve the environmental noise abatement objectives set for that airport . operating restrictions shall be non - discriminatory , in particular on grounds of nationality , identity or activity of aircraft operators . ### measures or a combination of measures taken in accordance with this regulation for a given airport shall not be more restrictive than necessary to achieve the health - related and environmental noise abatement objectives set for that airport . operating restrictions shall be non - discriminatory , in particular on grounds of nationality , identity or activity of aircraft operators .


### the competent authorities shall ensure that , at the appropriate level , a forum for technical cooperation is established between the airport operator , aircraft operator and air navigation service provider , for actions which these operators are responsible for , and taking due account of the interdependency between measures to mitigate noise and to reduce emissions . the members of this forum for technical cooperation shall regularly consult local residents or their representatives , and provide technical information and advice on noise mitigating measures to the competent authorities . ### the competent authorities shall ensure that , at the appropriate level , a forum for technical cooperation is established between the airport operator , aircraft operator and air navigation service provider , for actions which these operators are responsible for , and taking due account of the interdependency between measures to mitigate noise and to reduce emissions . the members of this forum for technical cooperation shall regularly consult interest groups , and provide technical information and advice on noise mitigating measures to the competent authorities . no decision shall be taken to implement a measure until interest groups have been consulted .


### having regard to the treaty on the functioning of the european union , and in particular article 43 and article 168 thereof , ### having regard to the treaty on the functioning of the european union , and in particular article 43 , article 168 and article 349 thereof ,


### by decision 2012 / 419 / eu3 , the european council amended the status of mayotte with regard to the union with effect from 1 january 2014 . therefore , from that date mayotte will cease to be an overseas territory to become an outermost region within the meaning of articles 349 and 355 tfeu . union law will apply to mayotte from 1 january 2014 . it is appropriate to provide for certain specific measures justified by the particular situation of mayotte in a number of areas . __________________ 3 oj l 204 , 31 . 7 . 2012 , p . 131 . ### by decision 2012 / 419 / eu3 , the european council amended the status of mayotte with regard to the union with effect from 1 january 2014 . therefore , from that date mayotte will cease to be an overseas country or territory within the meaning of article 198 of the treaty on the functioning of the european union and become an outermost region within the meaning of articles 349 and 355 of that treaty . union law will apply to mayotte from 1 january 2014 . it is appropriate to provide for certain specific measures , justified by the particular situation of mayotte and its new status as an outermost region , in a number of areas . __________________ 4 oj l 204 , 31 . 7 . 2012 , p . 131 .


### member states shall respect the principles of sound financial management , transparency and non - discrimination and ensure the visibility of union action when they manage union funds . to this end , member states shall fulfil the control and audit obligations and assume the resulting responsibilities laid down in this regulation . complementary provisions may be laid down in sector - specific rules . ### where the commission implements the budget by shared management , implementation tasks shall be delegated to member states .


### member states shall prevent , detect and correct irregularities and fraud when executing tasks related to the implementation of the budget . to this end they shall carry out ex ante and ex post controls including , where appropriate , on the spot checks , to ensure that the actions financed from the budget are effectively carried out and implemented correctly , recover funds unduly paid and bring legal proceedings as necessary . member states shall impose effective , dissuasive and proportionate penalties on recipients as provided for in sector - specific rules and in national legislation . ### without prejudice to complementary provisions included in relevant sector - specific regulations , and in order to ensure in shared management that the funds are used in accordance with the applicable rules and principles , the member states shall take all the legislative , regulatory and administrative or other measures necessary for protecting the union ' s financial interests . to this effect they shall in particular : satisfy themselves that actions financed from the budget are actually carried out and ensure that they are implemented correctly ; prevent , detect and correct irregularities and fraud ; recover funds wrongly paid or incorrectly used or funds lost as a result of irregularities or errors ; the commission shall appraise the systems set up in the member states on application by a member state or on its own risk assessment or in application of sector specific rules .


### in accordance with the sector - specific rules , member states shall accredit one or more public sector bodies which shall be solely responsible for the proper management and control of the funds , for which accreditation has been granted . this shall be without prejudice to the possibility for these bodies to carry out tasks not related to the management of union funds or to entrust certain of their tasks to other bodies . ### the sector - specific rules shall set out the roles of the commission and the member states in the management and control of union funds .


### the accrediting authority shall be responsible for supervising the body and for taking all necessary measures to remedy any deficiency in its operation , including the suspension and withdrawal of the accreditation . ### the accrediting authority shall be responsible for monitoring compliance of the accredited bodies with the accreditation criteria , on the basis of available audits and control results . the accrediting authority shall take all necessary measures to remedy any deficiency in the implementation of the tasks entrusted to the bodies it has accredited , including the suspension and withdrawal of the accreditation . the accredited bodies in the member states shall : conduct checks and put in place an effective and efficient internal control system ; provide the commission by 1 march of the following financial year with : their annual accounts drawn up for the expenditure made in the execution of the tasks entrusted and presented to the commission for reimbursement including the sums disbursed to the beneficiaries for which recovery procedures are underway ; a summary of the results of available audits and checks carried out , including an analysis of systemic or recurrent weaknesses as well as corrective actions taken or planned and their results ; a management declaration providing reasonable assurance that : - the information contained in the accounts presents a true and fair view ; - the expenditure referred in the accounts has been used for its intended purpose and in accordance with the principle of sound financial management ; - the control procedures put in place give the necessary guarantees concerning the legality and regularity of the underlying transactions . these documents shall be accompanied by an opinion of an independent audit body , drawn up in accordance with the internationally accepted audit standards , on the contents of the management declaration . the audit body shall report if the examination puts in doubt the assertions made in the management declaration . an annex to the opinion shall present the error rate per funds and an analysis of the errors as well as reservations ; ensure in conformity with article 31 , annual ex post publication of recipients of union funds ; and ensure a protection of personal data which satisfies the principles laid down in directive 95 / 46 / ec . if a member state has accredited more than one body per policy area , it shall by 15 march of the following financial year provide the commission with a synthesis report consisting of an overview at national level of all management declarations of assurance and the independent audit opinions thereon , prepared for the policy area concerned . the member states shall bring legal proceedings as necessary and appropriate . as far as member states disclose errors and / or irregularities they discover immediately to the commission and remedy these , they shall be exempt from financial corrections concerning such errors and / or irregularities .


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


### ensuring the correct and full application of community law is a core prerequisite for the integrity , efficiency and orderly functioning of financial markets , the stability of the financial system , and for neutral conditions of competition for financial market participants in the community . a mechanism should therefore be established whereby the authority addresses instances of incorrect or insufficient application of community law . this mechanism should apply in areas where community legislation defines clear and unconditional obligations . ### ensuring the correct and full application of community law is a core prerequisite for the integrity , efficiency and orderly functioning of financial markets , the stability of the financial system , and for neutral conditions of competition for financial market participants in the community . a mechanism should therefore be established whereby the authority addresses instances of non - application of community law . this mechanism should apply in areas where community legislation defines clear and unconditional obligations .


### the authority should actively foster supervisory convergence across the community with the aim of establishing a common supervisory culture . ### the authority should actively foster supervisory convergence across the community with the aim of establishing a common supervisory culture whilst fully respecting member states ' fiscal responsibilities .


### in order to safeguard financial stability it is necessary to identify , at an early stage , trends , potential risks and vulnerabilities stemming from the micro - prudential level , across borders and across sectors . the authority should monitor and assess such developments in the area of its competence and , where necessary , inform the european parliament , the council , the commission , the other european supervisory authorities and the european systemic risk board on a regular and , as necessary , ad hoc basis . the authority should also coordinate community - wide stress tests to assess the resilience of financial market participants to adverse market developments , ensuring an as consistent as possible methodology is applied at the national level to such tests . ### in order to safeguard financial stability it is necessary to identify , at an early stage , trends , potential risks and vulnerabilities stemming from the micro - prudential level , across borders and across sectors . the authority should monitor and assess such developments in the area of its competence and , on a regular basis , inform the european parliament , the council , the commission , the other european supervisory authorities and the european systemic risk board as well as the competent national authorities . the authority should also coordinate community - wide stress tests to assess the resilience of financial market participants to adverse market developments , ensuring an as consistent as possible methodology is applied at the national level to such tests .


### given the globalisation of financial services and the increased importance of international standards , the authority should foster the dialogue and cooperation with supervisors outside the community . it shall fully respect the existing roles and competences of the european institutions in relations with authorities outside the community and in international forums . ### given the globalisation of financial services and the increased importance of international standards , the authority should foster dialogue and cooperation with supervisors outside the community . it shall fully respect the existing roles and competences of the european institutions in relations with authorities outside the community and in international forums . the agency should also be able to benefit from the cooperation the commission already enjoys with international forums .


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


### close cooperation between the authority and the european systemic risk board is essential to give full effectiveness to the functioning of the european systemic risk board and the follow - up to its warnings and recommendations . the authority should share any relevant information with the european systemic risk board . data related to individual undertakings should be provided only upon reasoned request . upon receipt of warnings or recommendations addressed by the european systemic risk board to the authority or a national supervisory authority , the authority should take immediate action and ensure follow - up . ### close cooperation between the authority and the european systemic risk board is essential to give full effectiveness to the functioning of the european systemic risk board and the follow - up to its warnings and recommendations . the authority should share any relevant information with the european systemic risk board . data related to individual undertakings should be provided only upon reasoned request and should be protected on a consistent basis and in accordance with eu law . upon receipt of warnings or recommendations addressed by the european systemic risk board to the authority or a national supervisory authority , the authority should take immediate action and ensure follow - up .


### the authority shall act within the scope of directive 97 / 9 / ec , directive 98 / 26 / ec , directive 2001 / 34 / ec , directive 2002 / 47 / ec , directive 2002 / 87 / ec , directive 2003 / 6 / ec , directive 2003 / 71 / ec , directive 2004 / 25 / ec , directive 2004 / 39 / ec , directive 2004 / 109 / ec , directive 2005 / 60 / ec , directive 2009 / 65 / ec , directive 2002 / 65 / ec , directive 2006 / 49 / ec , directive … [ future aifm directive ] , and regulation … [ future cra regulation ] , including all directives , regulations , and decisions based on these acts , and of any further community act which confers tasks on the authority . ### the authority shall act within the scope of directive 97 / 9 / ec , directive 98 / 26 / ec , directive 2001 / 34 / ec , directive 2002 / 47 / ec , directive 2002 / 87 / ec , directive 2003 / 6 / ec , directive 2003 / 71 / ec , directive 2004 / 39 / ec , directive 2004 / 109 / ec , directive 2005 / 60 / ec , directive 2009 / 65 / ec , directive 2002 / 65 / ec , directive 2006 / 49 / ec , directive … [ future aifm directive ] , and regulation … [ future cra regulation ] , including all directives , regulations , and decisions based on these acts , and of any further community act which confers tasks on the authority .


### the objective of the authority shall be to contribute to : improving the functioning of the internal market , including in particular a high , effective and consistent level of regulation and supervision , protecting protect investors , ensuring the integrity , efficiency and orderly functioning of financial markets , safeguarding the stability of the financial system , and strengthening international supervisory coordination . for this purpose , the authority shall contribute to ensuring the consistent , efficient and effective application of the community law referred to in article 1 above , fostering supervisory convergence and providing opinions to the european parliament , the council , and the commission . ### the objective of the authority shall be to contribute to : improving the functioning of the internal market , including in particular a high , effective and consistent level of regulation and supervision , protecting protect investors , ensuring the integrity , efficiency and orderly functioning of financial markets , safeguarding the stability of the financial system , and strengthening international supervisory coordination whilst taking into account of the need to enhance competition and innovation within the internal market and to ensure global competitiveness . for this purpose , the authority shall contribute to ensuring the consistent , efficient and effective application of the community law referred to in article 1 above , fostering supervisory convergence and providing opinions to the european parliament , the council , and the commission .


### issue guidelines and recommendations , as laid down in article 8 ; ### issue non - binding guidelines and recommendations , as laid down in article 8 ;


### technical standards ### technical standards – delegated acts


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


### the standards shall be adopted by the commission by means of regulations or decisions and published in the official journal of the european union . ### the standards shall be adopted by the commission by means of regulations or decisions as delegated acts in accordance with article 290 of the treaty on the functioning of the european union . the word ' delegated ' shall be inserted in the title of those acts . the standards adopted pursuant to this article shall enter into force only if no objection has been expressed by the european parliament or the council within a period of three months .


### the authority shall , with a view to establishing consistent , efficient and effective supervisory practices within the esfs , and to ensuring the common , uniform and consistent application of community legislation , issue guidelines and recommendations addressed to competent authorities or financial market participants . the competent authorities shall make every effort to comply with those guidelines and recommendations . where the competent authority does not apply those guidelines or recommendations it shall inform the authority of its reasons . ### the authority shall , with a view to establishing consistent , efficient and effective supervisory practices with the esfs , and to ensuring the common , uniform and consistent application of community legislation , issue guidelines and recommendations addressed to competent authorities or financial market participants . the authority shall conduct open public consultations on guidelines and recommendations and shall analyse the potential related costs and benefits . the guidelines shall be published on the authority ' s website . the competent authorities shall make every effort to comply with those guidelines and recommendations . where a competent authority does not apply those guidelines or recommendations it shall inform the authority of its reasons . the authority shall publish those reasons , giving the competent authority due notice in advance of its intention so to do .


### consistent application of community rules ### non - application of european union law


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


### upon request from one or more competent authorities , from the commission or on its own initiative and after having informed the competent authority concerned , the authority may investigate the alleged incorrect application of community law . ### upon request from one or more competent authorities , from the commission , the european parliament or the council or on its own initiative and after having informed the competent authority concerned , the authority may investigate the alleged non - application of community law .


### settlement of disagreements between competent authorities ### settlement of disagreements between competent authorities in cross - border situations


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


### without prejudice to article 11 , acting as mediator on the request of competent authorities or on its own initiative ; ### without prejudice to article 11 , carrying out non - binding mediation at the request of competent authorities ;


### without prejudice to the competences of the community institutions , the authority may develop contacts with supervisory authorities from third countries . it may enter into administrative arrangements with international organisations and the administrations of third countries . ### without prejudice to the competences of the community institutions , the authority may develop contacts with supervisory authorities from third countries . it may enter into administrative arrangements with international organisations and the administrations of third countries . these arrangements shall not create legal obligations on the part of the european union and its member states .


### at the request of the authority , competent authorities and other public authorities of the member states shall provide the authority with all the necessary information to carry out the duties assigned to it by this regulation . ### at the request of the authority , competent authorities and other public authorities of the member states shall provide the authority with all the necessary information to carry out the duties assigned to it by this regulation , fully respecting the applicable confidentiality and data protection provisions laid down in the relevant european union legislation .


### the authority may also request information to be provided at recurring intervals . ### the authority may also request information to be provided at recurring intervals . any such request shall , where applicable , use common reporting formats .


### securities and markets stakeholder group ### establishment of a securities and markets stakeholder group


### for the purpose of consultation with stakeholders in areas relevant to the tasks of the authority , a securities and markets stakeholder group shall be established . ### the authority shall establish a securities and markets stakeholder group for the purpose of consultation with stakeholders in areas relevant to the tasks of the authority .


### in making its decision , the board of supervisors shall , to the extent possible , ensure an appropriate geographical balance and representation of stakeholders across the community . ### in making its decision , the board of supervisors shall ensure an appropriate geographical balance and representation of stakeholders across the community .


### within a period of one month from the notification by the member state , the authority shall inform the member state as to whether it maintains its decision or whether it amends or revokes it . ### within a period of one month from the notification by the member state , the authority shall inform the member state as to whether it maintains its decision or whether it amends or revokes it . if the decision is maintained or amended , the authority shall state that fiscal responsibilities are not affected .


### regulation no 1060 / 2009 of the european parliament and of the council of 16&#160 ; september 2009 on credit rating agencies15 requires credit rating agencies to comply with rules of conduct in order to mitigate possible conflicts of interest , ensure high quality and sufficient transparency of ratings and the rating process . following the amendments introduced by regulation no 513 / 2011 of the european parliament and of the council , the european securities and markets authority has been empowered to register and supervise credit rating agencies . this amendment complements the current regulatory framework for credit rating agencies . some of the issues addressed had been identified , but not fully resolved by the existing rules . the need to review transparency and procedural requirements specifically for sovereign ratings was highlighted by the current sovereign debt crisis . ### regulation no 1060 / 2009 of the european parliament and of the council of 16&#160 ; september 2009 on credit rating agencies15 requires credit rating agencies to comply with rules of conduct in order to mitigate possible conflicts of interest , ensure high quality and sufficient transparency of ratings and the rating process . following the amendments introduced by regulation no 513 / 2011 of the european parliament and of the council , the european securities and markets authority has been empowered to register and supervise credit rating agencies . this amendment complements the current regulatory framework for credit rating agencies . some of the most important issues have been addressed and the framework will need to be reviewed after having been in place for a reasonable period of time to assess whether it fully resolves these issues . meanwhile the need to review transparency and procedural requirements specifically for sovereign ratings was highlighted by the current sovereign debt crisis .


### regulation no 1060 / 2009 of the european parliament and of the council of 16&#160 ; september 2009 on credit rating agencies requires credit rating agencies to comply with rules of conduct in order to mitigate possible conflicts of interest , ensure high quality and sufficient transparency of ratings and the rating process . following the amendments introduced by regulation no 513 / 2011 of the european parliament and of the council , the european securities and markets authority has been empowered to register and supervise credit rating agencies . this amendment complements the current regulatory framework for credit rating agencies . some of the issues addressed had been identified , but not fully resolved by the existing rules . the need to review transparency and procedural requirements specifically for sovereign ratings was highlighted by the current sovereign debt crisis . ### regulation no 1060 / 2009 of the european parliament and of the council of 16&#160 ; september 2009 on credit rating agencies requires credit rating agencies to comply with rules of conduct in order to mitigate possible conflicts of interest , ensure high quality and sufficient transparency of ratings and the rating process . following the amendments introduced by regulation no 513 / 2011 of the european parliament and of the council , the european securities and markets authority has been empowered to register and supervise credit rating agencies . this amendment complements the current regulatory framework for credit rating agencies . some of the issues addressed had been identified , but not fully resolved by the existing rules . the need to review transparency , procedural requirements and the timing of the publication specifically for sovereign ratings was highlighted by the current sovereign debt crisis .


### credit rating agencies are important participants in the financial markets . as a consequence , the independence and integrity of credit rating agencies and their credit rating activities are of particular importance to guarantee their credibility vis - à - vis market participants , in particular investors and other users of ratings . regulation 1060 / 2009 provides that credit rating agencies have to be registered and supervised as their services have considerable impact on the public interest . credit ratings , unlike investment research , are not mere opinions about a value or a price for a financial instrument or a financial obligation . credit rating agencies are not mere financial analysts or investment advisors . credit ratings have regulatory value for regulated investors , such as credit institutions , insurance companies and other institutional investors . although the incentives to excessively rely on credit ratings are being reduced , credit ratings still drive investment choices , notably because of information asymmetries and for efficiency purposes . in this context , credit rating agencies must be independent and perceived as such by market participants . ### credit rating agencies are important participants in the financial markets . as a consequence , the independence and integrity of credit rating agencies and their credit rating activities are of particular importance to guarantee their credibility vis - à - vis market participants , in particular investors and other users of ratings . regulation 1060 / 2009 provides that credit rating agencies have to be registered and supervised as their services have considerable impact on the public interest . credit ratings have regulatory value for regulated investors , such as credit institutions , insurance companies and other institutional investors . although the incentives to excessively rely on credit ratings are being reduced , credit ratings still drive investment choices , notably because of information asymmetries and for efficiency purposes . in this context , credit rating agencies must be independent and perceived as such by market participants .


### credit rating agencies are important participants in the financial markets . as a consequence , the independence and integrity of credit rating agencies and their credit rating activities are of particular importance to guarantee their credibility vis - à - vis market participants , in particular investors and other users of ratings . regulation 1060 / 2009 provides that credit rating agencies have to be registered and supervised as their services have considerable impact on the public interest . credit ratings , unlike investment research , are not mere opinions about a value or a price for a financial instrument or a financial obligation . credit rating agencies are not mere financial analysts or investment advisors . credit ratings have regulatory value for regulated investors , such as credit institutions , insurance companies and other institutional investors . although the incentives to excessively rely on credit ratings are being reduced , credit ratings still drive investment choices , notably because of information asymmetries and for efficiency purposes . in this context , credit rating agencies must be independent and perceived as such by market participants . ### credit rating agencies are important participants in the financial markets . as a consequence , the independence and integrity of credit rating agencies and their credit rating activities are of particular importance to guarantee their credibility vis - à - vis market participants , in particular investors and other users of ratings . regulation 1060 / 2009 provides that credit rating agencies have to be registered and supervised as their services have considerable impact on the public interest . credit ratings , unlike investment research , are not mere opinions about a value or a price for a financial instrument or a financial obligation . credit rating agencies are not mere financial analysts or investment advisors . credit ratings have regulatory value for regulated investors , such as credit institutions , insurance companies and other institutional investors . although the incentives to excessively rely on credit ratings are being reduced , credit ratings still drive investment choices , notably because of information asymmetries and for efficiency purposes . in this context , credit rating agencies must be independent and their rating methods transparent and perceived as such by market participants .


### the perception of independence of credit rating agencies would be particularly affected should the same shareholders or members be investing in different credit rating agencies not belonging to the same group of credit rating agencies , at least if this investment reaches a certain size that could allow these shareholders or members to exercise a certain influence on the agency ' s business . therefore , in order to ensure the independence of credit rating agencies , it is appropriate to provide for stricter rules regarding the relations between the credit rating agencies and their shareholders . for this reason , no person should simultaneously hold a participation of 5% or more in more than one credit rating agency , unless the agencies concerned belong to the same group . ### the perception of independence of credit rating agencies could be particularly damaged should the same shareholders or members be investing in different credit rating agencies not belonging to the same group of credit rating agencies , at least if this investment reaches a certain size that could allow these shareholders or members to exercise a certain influence on the agency ' s business . therefore , in order to ensure the perception of independence of credit rating agencies , it is appropriate to provide for more transparent rules regarding the relations between the credit rating agencies and their shareholders . for this reason , all 10 % or more shareholders should be publicly and periodically disclosed .


### the perception of independence of credit rating agencies would be particularly affected should the same shareholders or members be investing in different credit rating agencies not belonging to the same group of credit rating agencies , at least if this investment reaches a certain size that could allow these shareholders or members to exercise a certain influence on the agency ' s business . therefore , in order to ensure the independence of credit rating agencies , it is appropriate to provide for stricter rules regarding the relations between the credit rating agencies and their shareholders . for this reason , no person should simultaneously hold a participation of 5% or more in more than one credit rating agency , unless the agencies concerned belong to the same group . ### the perception of independence of credit rating agencies would be particularly affected should the same shareholders or members be investing in different credit rating agencies not belonging to the same group of credit rating agencies . therefore , in order to ensure the independence of credit rating agencies , it is appropriate to provide for stricter rules regarding the relations between the credit rating agencies and their shareholders . for this reason , a shareholder or member holding a participation of 5% or more in one credit rating agency should not be allowed to hold any participation in another credit rating agency , unless the agencies concerned belong to the same group .


### the perception of independence of credit rating agencies would be particularly affected should the same shareholders or members be investing in different credit rating agencies not belonging to the same group of credit rating agencies , at least if this investment reaches a certain size that could allow these shareholders or members to exercise a certain influence on the agency ' s business . therefore , in order to ensure the independence of credit rating agencies , it is appropriate to provide for stricter rules regarding the relations between the credit rating agencies and their shareholders . for this reason , no person should simultaneously hold a participation of 5% or more in more than one credit rating agency , unless the agencies concerned belong to the same group . ### the perception of independence of credit rating agencies would be particularly affected should the same shareholders or members be investing in different credit rating agencies not belonging to the same group of credit rating agencies , at least if this investment reaches a certain size that could allow these shareholders or members to exercise a certain influence on the agency ' s business . therefore , in order to ensure the independence of credit rating agencies and a healthy investment environment , it is appropriate to provide for stricter rules regarding the relations between the credit rating agencies and their shareholders . for this reason , no person should simultaneously hold a participation of 5% or more in more than one credit rating agency , unless the agencies concerned belong to the same group .


### it is important to ensure that modifications to the rating methodologies do not result in less rigorous methodologies . for that purpose , issuers , investors and other interested parties should have the opportunity to comment on any intended change of rating methodologies . this will help them to understand the reasons behind new methodologies and for the change in question . comments provided by issuers and investors on the draft methodologies may provide valuable input for the credit rating agencies in defining the methodologies . moreover , esma should verify and confirm the compliance of new rating methodologies with article 8 of regulation no 1060 / 2009 and the relevant regulatory technical standard before methodologies are applied in practice . esma should verify that the proposed methodologies are rigorous , systematic , continuous and subject to validation based on historical experience , including back - testing . however , this verification process should not grant esma any power to judge the appropriateness of the proposed methodology or the content of the credit ratings issued following the application of the methodologies . ### it is important to ensure that relevant modifications to the rating methodologies do not result in less rigorous methodologies . for that purpose , issuers , investors and other interested parties should have the opportunity to comment on any intended relevant change of rating methodologies . this will help them to understand the reasons behind new methodologies and for the change in question . comments provided by issuers and investors on the draft methodologies may provide valuable input for the credit rating agencies in defining the methodologies . moreover , esma should be notified when new methodologies are applied in practice . however , this notification should not grant esma any power to judge the appropriateness of the proposed methodology or the content of the credit ratings issued following the application of the methodologies or to certify or pre - approve methodologies used by credit rating agencies .


### due to the complexity of structured finance instruments , credit rating agencies have not always succeeded in ensuring a sufficiently high quality of credit ratings issued on such instruments . this has led to a loss of market confidence in this type of credit ratings . in order to regain confidence it would be appropriate to require issuers or their related third parties to engage two different credit rating agencies for the provision of credit ratings on structured finance instruments , which could lead to different and competing assessments . this could also reduce the over - reliance on a single credit rating . ### due to the complexity of structured finance instruments it would be appropriate to require issuers or their related third parties to engage two different credit rating agencies for the provision of credit ratings on structured finance instruments , which could lead to different and competing assessments . this could also reduce the over - reliance on a single credit rating and enhance competition .


### due to the complexity of structured finance instruments , credit rating agencies have not always succeeded in ensuring a sufficiently high quality of credit ratings issued on such instruments . this has led to a loss of market confidence in this type of credit ratings . in order to regain confidence it would be appropriate to require issuers or their related third parties to engage two different credit rating agencies for the provision of credit ratings on structured finance instruments , which could lead to different and competing assessments . this could also reduce the over - reliance on a single credit rating . ### due to the complexity of structured finance instruments , credit rating agencies have not always succeeded in ensuring a sufficiently high quality of credit ratings issued on such instruments . this has led to a loss of market confidence in this type of credit ratings . in order to regain confidence it would be appropriate to require issuers or their related third parties to engage two different credit rating agencies for the provision of credit ratings on structured finance instruments , which could lead to different and competing assessments . this could also reduce the over - reliance on a single credit rating . since it is particularly important to have quality standards for credit ratings , the introduction of a general , periodic quality review of rating agencies should be discussed in order to avoid in future the errors in credit ratings referred to above , which can be attributed to a lack of competence .


### due to the complexity of structured finance instruments , credit rating agencies have not always succeeded in ensuring a sufficiently high quality of credit ratings issued on such instruments . this has led to a loss of market confidence in this type of credit ratings . in order to regain confidence it would be appropriate to require issuers or their related third parties to engage two different credit rating agencies for the provision of credit ratings on structured finance instruments , which could lead to different and competing assessments . this could also reduce the over - reliance on a single credit rating . ### due to the complexity of structured finance instruments , credit rating agencies have not always succeeded in ensuring a sufficiently high quality of credit ratings issued on such instruments . this has led to a loss of market confidence in this type of credit ratings . in order to regain confidence it would be appropriate to require issuers or their related third parties to engage at least two different credit rating agencies for the provision of credit ratings on structured finance instruments , which could lead to different and competing assessments . this could also reduce the over - reliance on a single credit rating .


### investors , issuers and other interested parties should have access to up to date rating information on a central webpage . a european rating index established by esma should allow investors to easily compare all ratings that exist with regard to a specific rated entity and provide them with average ratings . in order to enable investors to compare ratings on the same entity issued by different credit rating agencies it is necessary that credit rating agencies use a harmonised rating scale , to be developed by esma and adopted by the commission as a regulatory technical standard . the use of the harmonised rating scale should only be mandatory for the publication of the ratings on the eurix webpage while credit rating agencies should be free to use their own rating scales when publishing the ratings on their own websites . the mandatory use of a harmonised rating scale should not have a harmonising effect on methodologies and processes of credit rating agencies , but should be limited to making the rating outcome comparable . it is important that the eurix webpage shows , in addition to an aggregate rating index , all available ratings per instrument in order to allow investors to consider the whole variety of opinions before taking their own investment decision . the aggregate rating index may help investors to get a first indication of the creditworthiness of an entity . the eurix should help smaller and new credit rating agencies to gain visibility . the european rating index would complement the information on historical performance data to be published by credit rating agencies in esma ' s central repository . the european parliament supported the establishment of such european rating index in its resolution on credit rating agencies of 8 june 2011 . ### investors , issuers and other interested parties should have access to up to date rating information on a central webpage . a european rating index should allow investors to easily compare all ratings that exist with regard to a specific rated entity and provide them with average ratings . in order to enable investors to compare ratings on the same entity issued by different credit rating agencies , eurix shall create an equivalence chart between all different rating scales used by credit rating agencies . the equivalence chart may help investors to get a first indication of the creditworthiness of an entity rated by several different agencies . historical performance data on credit rating agencies shall be periodically published by esma .


### credit ratings , whether issued for regulatory purposes or not , have a significant impact on investment decisions . hence , credit rating agencies have an important responsibility towards investors in ensuring that they comply with the rules of regulation no 1060 / 2009 so that their ratings are independent , objective and of adequate quality . however , in the absence of a contractual relationship between the credit rating agency and the investor , investors are not always in a position to enforce the agency ' s responsibility towards them . therefore , it is important to provide for an adequate right of redress for investors who relied on a credit rating issued in breach of the rules of regulation no 1060 / 2009 . the investor should be able to hold the credit rating agency liable for any damage caused by an infringement of that regulation which had an impact on the rating outcome . infringements which do not impact the rating outcome , such as breaches of transparency obligations , should not trigger civil liability claims . ### credit ratings , whether issued for regulatory purposes or not , have a significant impact on investment decisions . hence , credit rating agencies have an important responsibility in ensuring that they comply with the rules of regulation no 1060 / 2009 so that their ratings are independent , objective and of adequate quality . however , in the absence of a contractual relationship between the credit rating agency and the investor , investors are not always in a position to enforce the agency ' s responsibility towards them . therefore , it is important to provide for an adequate right of redress for investors who relied on a credit rating issued in breach of the rules of regulation no 1060 / 2009 . the investor should be able to hold the credit rating agency liable , when acting intentionally or with gross negligence , for any damage caused by an infringement of that regulation which had an impact on the rating outcome . infringements which do not impact the rating outcome , such as breaches of transparency obligations , should not trigger civil liability claims .


### regarding matters concerning the civil liability of a credit rating agency and which are not covered by this regulation , such matters should be governed by the applicable national law determined by the relevant rules of international private law . the competent court to decide on a claim for civil liability brought by an investor should be determined by the relevant rules on international jurisdiction . ### regarding matters concerning the civil liability of a credit rating agency and which are not covered by this regulation , such matters should be governed by the applicable national law determined by the relevant rules of international private law . the competent court to decide on a claim for civil liability brought by a third party should be determined by the relevant rules on international jurisdiction .


### in order to further mitigate conflicts of interest and facilitate fair competition in the credit rating market , it is important to ensure that the fees charged by credit rating agencies to customers are not discriminatory . differences in fees charged for the same type of service should only be justifiable by a difference in the actual costs in providing this service to different customers . moreover , the fees charged for rating services to a given issuer should not depend on the results or outcome of the work performed or on the provision of related services . furthermore , in order to allow for the effective supervision of those rules , credit rating agencies should disclose to esma the fees received from each of their clients and their general pricing policy . ### in order to further mitigate conflicts of interest and facilitate fair competition in the credit rating market , it is important to ensure that the fees charged by credit rating agencies to customers are not discriminatory . differences in fees charged for the same type of service should only be justifiable by a difference in the actual costs in providing this service to different customers . moreover , the fees charged for rating services to a given issuer should not depend on the results or outcome of the work performed or on the provision of related services . furthermore , in order to allow for the effective supervision of those rules , credit rating agencies should in every case disclose to esma the fees received from each of their clients and their general pricing policy .


### in order to contribute to the issuance of up to date and credible sovereign ratings and to facilitate users ' understanding , it is important to regularly review ratings . it is also important to increase the transparency about the research work carried out , the staff allocated to the preparation of ratings and the underlying assumptions behind the credit ratings made by credit rating agencies in relation to sovereign debt . ### in order to contribute to the issuance of up to date and credible sovereign ratings and to facilitate users ' understanding , it is important to regularly review ratings . in order to make ratings easier to understand , an overview should be provided - in addition to regular controls - enabling users to understand how ratings are made . it is also important to increase the transparency about the research work carried out , the staff allocated to the preparation of ratings and the underlying assumptions behind the credit ratings made by credit rating agencies in relation to sovereign debt .


### in order to contribute to the issuance of up to date and credible sovereign ratings and to facilitate users ' understanding , it is important to regularly review ratings . it is also important to increase the transparency about the research work carried out , the staff allocated to the preparation of ratings and the underlying assumptions behind the credit ratings made by credit rating agencies in relation to sovereign debt . ### in order to contribute to the issuance of up to date and credible sovereign ratings and to facilitate users ' understanding , it is important to regularly review ratings . in view of the extreme importance of ratings , it is also essential to increase the transparency about the research work carried out , the staff allocated to the preparation of ratings , the underlying assumptions behind the credit ratings made by credit rating agencies in relation to sovereign debt and the inter - relationships on which their statements are based .


### the commission should adopt the draft regulatory technical standards developed by esma regarding the content of the handover file when a credit rating agency is replaced by another credit rating agency , the content , frequency and presentation of the information to be provided by issuers on structured finance instruments , harmonisation of the standard rating scale to be used by credit rating agencies , the presentation of the information , including structure , format , method and timing of reporting , that credit rating agencies should disclose to esma in relation to eurix and the content and format of the periodic reporting on fees charged by credit rating agencies for the purposes of ongoing supervision by esma . the commission should adopt those standards by means of delegated acts pursuant to article 290 of the treaty and in accordance with articles 10 to 14 of regulation no 1095 / 2010 . ### the commission should adopt the draft regulatory technical standards developed by esma regarding the content , frequency and presentation of the information to be provided by issuers on structured finance instruments , the presentation of the information , including structure , format , method and timing of reporting , that credit rating agencies , eba and national central banks of member states should disclose to esma in relation to eurix and the content and format of the periodic reporting on fees charged by credit rating agencies for the purposes of ongoing supervision by esma . the commission should adopt those standards by means of delegated acts pursuant to article 290 of the treaty and in accordance with articles 10 to 14 of regulation no 1095 / 2010 .


### the commission should adopt the draft regulatory technical standards developed by esma regarding the content of the handover file when a credit rating agency is replaced by another credit rating agency , the content , frequency and presentation of the information to be provided by issuers on structured finance instruments , harmonisation of the standard rating scale to be used by credit rating agencies , the presentation of the information , including structure , format , method and timing of reporting , that credit rating agencies should disclose to esma in relation to eurix and the content and format of the periodic reporting on fees charged by credit rating agencies for the purposes of ongoing supervision by esma . the commission should adopt those standards by means of delegated acts pursuant to article 290 of the treaty and in accordance with articles 10 to 14 of regulation no 1095 / 2010 . ### the commission should adopt the draft regulatory technical standards developed by esma regarding the content , frequency and presentation of the information to be provided by issuers on structured finance instruments , harmonisation of the standard rating scale to be used by credit rating agencies , the presentation of the information , including structure , format , method and timing of reporting , that credit rating agencies should disclose to esma in relation to eurix and the content and format of the periodic reporting on fees charged by credit rating agencies for the purposes of ongoing supervision by esma . the commission should adopt those standards by means of delegated acts pursuant to article 290 of the treaty and in accordance with articles 10 to 14 of regulation no 1095 / 2010 .


### this regulation introduces a common regulatory approach in order to enhance the integrity , transparency , responsibility , good governance and reliability of credit rating activities , contributing to the quality of credit ratings issued in the union , thereby contributing to the smooth functioning of the internal market while achieving a high level of consumer and investor protection . it lays down conditions for the issuing of credit ratings and rules on the organisation and conduct of credit rating agencies , including their shareholders and members , to promote credit rating agencies ' independence , the avoidance of conflicts of interest and the enhancement of consumer and investor protection . ### this regulation introduces a common regulatory approach in order to enhance the integrity , transparency , responsibility , good governance and independence of credit rating activities , contributing to the quality of credit ratings issued in the union , thereby contributing to the smooth functioning of the internal market while achieving a high level of consumer and investor protection . it lays down conditions for the issuing of credit ratings and rules on the organisation and conduct of credit rating agencies , including their shareholders and members , to promote credit rating agencies ' independence , the avoidance of conflicts of interest and the enhancement of investor protection .


### a shareholder or a member of a credit rating agency holding at least 5% of the capital or the voting rights in that agency shall not hold 5% or more of the capital of any other credit rating agency . this prohibition does not apply to holdings in diversified collective investment schemes , including managed funds such as pension funds or life insurance , provided that the holdings in diversified collective investment schemes do not put him or her in a position to exercise significant influence on the business activities of those schemes ; have the right or the power to exercise 5% or more of the voting rights in any other credit rating agency ; have the right or the power to appoint or remove members of the administrative , management or supervisory body of any other credit rating agency ; be member of the administrative , management or supervisory body of any other credit rating agency ; have the power to exercise , or actually exercise , dominant influence or control over any other credit rating agency . ### all shareholders or members of a credit rating agency holding at least 10&#160 ; % of the capital or of the voting rights should be publicly disclosed .


### where following the end of the maximum duration period of the contractual relationship , pursuant to the rules in paragraphs 1 and 2 , a credit rating agency is replaced by another credit rating agency , the exiting credit rating agency shall provide the incoming credit rating agency with a handover file . such file shall include relevant information concerning the rated entity and the rated debt instruments as may reasonably be necessary to ensure the comparability with the ratings carried out by the exiting credit rating agency . ### where following the end of the maximum duration period of the contractual relationship , pursuant to the rules in paragraphs 1 and 2 , a credit rating agency is replaced by another credit rating agency , the exiting credit rating agency shall provide the incoming credit rating agency with a handover file . such file shall include relevant information concerning the rated entity and the rated debt instruments as may reasonably be necessary to ensure the comparability with the ratings carried out by the exiting credit rating agency . the exiting agency shall have the right to retain copyrighted information . this right should be evaluated in the context of provisions concerning intellectual property rights . the incoming agency shall have the right to demand that a client ' s documentation be made available without undue delay and without charge . furthermore , the incoming agency shall have the right to demand that the documentation be completed without charge and to report its concerns regarding the quality or completeness of such information within a period of one year from its transfer .


### a credit rating agency shall adopt , implement and enforce adequate measures to ensure that the credit ratings and the rating outlooks it issues are based on a thorough analysis of all the information that is available to it and that is relevant to its analysis according to the applicable rating methodologies . it shall adopt all necessary measures so that the information it uses in assigning credit ratings and rating outlooks is of sufficient quality and from reliable sources . ### a credit rating agency shall adopt , implement and enforce adequate measures to ensure that the credit ratings and the rating outlooks it issues are based on a thorough analysis of all the information that is available to it and that is relevant to its analysis according to the applicable rating methodologies . it shall adopt all necessary measures so that the information it uses in assigning credit ratings and rating outlooks is of sufficient quality and from reliable sources . the credit rating agency shall issue credit ratings and rating outlooks while adhering to standards of objectivity and stipulating that the rating is the agency’s opinion and should be relied upon to a limited degree .


### a credit rating agency that intends to change or use any new rating methodologies , models or key rating assumptions shall publish the proposed changes or proposed new methodologies on its website inviting stakeholders to submit comments for a period not shorter than one month , together with a detailed explanation of the reasons for and the implications of the proposed changes or proposed new methodologies . ### a credit rating agency that intends to introduce significant changes or use new rating methodologies , models or key rating assumptions shall without undue delay inform esma and publish the proposed relevant changes or proposed new methodologies on its website inviting stakeholders to submit comments for a period not shorter than one month , together with a detailed explanation of the reasons for and the implications of the proposed changes or proposed new methodologies .


### a credit rating agency that intends to change or use any new rating methodologies , models or key rating assumptions shall publish the proposed changes or proposed new methodologies on its website inviting stakeholders to submit comments for a period not shorter than one month , together with a detailed explanation of the reasons for and the implications of the proposed changes or proposed new methodologies . ### a credit rating agency that intends to materially change or use any new rating methodologies , models or key rating assumptions shall publish the proposed changes or proposed new methodologies on its website inviting stakeholders to submit comments for a period of one month , together with a detailed explanation of the reasons for and the implications of the proposed material changes or proposed new methodologies .


### credit rating agencies shall ensure that credit ratings and rating outlooks are presented and processed in accordance with the requirements set out in section d of annex i . ### credit rating agencies shall ensure that credit ratings and rating outlooks are presented and processed in accordance with the requirements set out in section d of annex i and that credit ratings which are not intended by a credit rating agency to be used for regulatory purposes are clearly and prominently identified as such .