### 1. regrets that passerelle clauses have never been used in the field of the cfsp , even though the russian war against ukraine has clearly called for more efficient and swift decision-making; ### 1. regrets that passerelle clauses have never been used in the field of the cfsp , even though russia’s war of aggression against ukraine has clearly called for more efficient and swift decision-making;


### 2. regrets the fact that the current situation often leads to delays and a lack of progress in the harmonisation and coordination of tax rules across the union , even though such harmonisation and coordination would benefit everyone; notes that some legislative proposals , such as the debt-equity bias reduction allowance (debra) or the business in europe: framework for income taxation (befit) , will be key to supporting the competitiveness of european companies; ### 2. regrets the fact that the current situation could in some cases lead to delays and a lack of progress in the harmonisation and coordination of tax rules across the union , even though such harmonisation and coordination could benefit everyone; notes that some legislative proposals , such as the business in europe: framework for income taxation (befit) , will be key to supporting the competitiveness of european companies;


### 2. urges the council presidency to follow up on the czech initiative in an effective way by putting the use of the passerelle clauses in the field of the cfsp on the agenda; ### 2. urges the swedish and upcoming spanish and belgian council presidencies to follow up on the czech initiative in an effective way by putting the use of the passerelle clauses in the field of the cfsp on the agenda and decide on its activation without delay and certainly by the end of this parliamentary term;


### 3. recalls that article 48(7) of the treaty on european union provides for two general passerelle clauses that allow the decision-making procedures to be changed in order to adopt measures in council through qualified majority voting (qmv) in areas that are currently subject to unanimity; regrets the fact that these passerelle clauses have never been used; recalls that activating the passerelle clauses would in any case require unanimity in the european council and parliament’s consent; ### 3. recalls that article 48(7) of the treaty on european union provides for two general passerelle clauses that allow the decision-making procedures to be changed in order to adopt measures in council through qualified majority voting (qmv) in areas that are currently subject to unanimity; recalls that activating the passerelle clauses would in any case require unanimity in the european council and parliament’s consent;


### 3. recalls that article 48(7) of the treaty on european union provides for two general passerelle clauses that allow the decision-making procedures to be changed in order to adopt measures in council through qualified majority voting (qmv) in areas that are currently subject to unanimity; regrets the fact that these passerelle clauses have never been used; recalls that activating the passerelle clauses would in any case require unanimity in the european council and parliament’s consent; ### 3. recalls that article 48(7) of the treaty on european union provides for two general passerelle clauses that allow the decision-making procedures to be changed in order to adopt measures in council through qualified majority voting (qmv) in areas that are currently subject to unanimity; notes the fact that these passerelle clauses have never been used; recalls that activating the passerelle clauses would in any case require unanimity in the european council and parliament’s consent;


### 3. urges the member states to switch to qmv for decisions in all areas of the cfsp , starting within a year with priority areas such as the eu global human rights sanctions regime , restrictive measures and other instruments linked to the russian war against ukraine and interim steps in the enlargement process; stresses that unanimity decisions should remain required for the creation and deployment of military missions or operations under the common security and defence policy (csdp); ### 3. urges the member states to switch to qmv for decisions in all areas of the cfsp , starting within a year with priority areas such as the eu global human rights sanctions regime (the eu magnitsky act) , restrictive measures and other instruments linked to russia’s war of aggression against ukraine and interim steps in the enlargement process; stresses that unanimity decisions should remain required for the creation and deployment of military missions or operations under the common security and defence policy (csdp);


### 4. recommends using the two general passerelle clauses for selected treaty articles concerning the eu’s competences in the area of taxation; recalls that the commission communication of 15 january 2019 entitled ‘towards a more efficient and democratic decision making in eu tax policy’ (com(2019)0008) and the conclusions of the conference on the future of europe both recommended moving from unanimity voting to qmv on tax matters. ### deleted


### 4. recommends using the two general passerelle clauses for selected treaty articles concerning the eu’s competences in the area of taxation; recalls that the commission communication of 15 january 2019 entitled ‘towards a more efficient and democratic decision making in eu tax policy’ (com(2019)0008) and the conclusions of the conference on the future of europe both recommended moving from unanimity voting to qmv on tax matters. ### 4. suggests further analysis of using the two general passerelle clauses for selected treaty articles concerning the eu’s competences in the area of taxation; recalls that the commission communication of 15 january 2019 entitled ‘towards a more efficient and democratic decision making in eu tax policy’ (com(2019)0008) and the conclusions of the conference on the future of europe both recommended moving from unanimity voting to qmv on tax matters.


### b. whereas the use of passerelle clauses would immediately boost the efficiency of decision-making in the field of the common foreign and security policy (cfsp) and would be highly appropriate given the dramatic change to the european security environment as a result of the russian war against ukraine; ### b. whereas the use of passerelle clauses would immediately boost the efficiency of decision-making in the field of the common foreign and security policy (cfsp) and would be highly appropriate given the dramatic change to the european security environment as a result of the russian war against ukraine; whereas the use of qmv could also shield the eu from third-country pressure and divide-and-rule tactics;


### b. whereas the use of passerelle clauses would immediately boost the efficiency of decision-making in the field of the common foreign and security policy (cfsp) and would be highly appropriate given the dramatic change to the european security environment as a result of the russian war against ukraine; ### b. whereas the use of passerelle clauses would immediately boost the efficiency of decision-making in the field of the common foreign and security policy (cfsp) and would be highly appropriate given the dramatic change to the european security environment as a result of russia’s war of aggression against ukraine;


### (6) in order to avoid a misuse of the deduction of the allowance on equity , it is necessary to lay down specific anti-tax avoidance rules. such rules should target , in particular , schemes put in place to circumvent the conditions on which an equity increase qualifies for an allowance under this directive , for instance , through the intra-group transfer of participations in associated enterprises. such rules should also target schemes put in place to claim an allowance in the absence of any equity increase at group level. for example , intra-group debt financing or contributions in cash could be used for these purposes. specific anti-tax avoidance rules should also prevent schemes from being put in place to claim that an increase in equity , and the corresponding allowance , is higher than it actually is , for example , through an increase in loan financing receivables or overvaluation of assets. moreover , the general anti-tax abuse rule in article 6 of council directive (eu) 2016/116415 applies against abusive acts which are not covered by the specific anti-tax avoidance framework of this directive. ### (6) in order to avoid a misuse of the deduction of the allowance on equity , it is necessary to lay down specific anti-tax avoidance rules. such rules should target , in particular , schemes put in place to circumvent the conditions on which an equity increase qualifies for an allowance under this directive , for instance , through the intra-group transfer of participations in associated enterprises. such rules should also target schemes put in place to claim an allowance in the absence of any equity increase at group level. for example , intra-group debt financing or contributions in cash could be used for these purposes. specific anti-tax avoidance rules should also prevent schemes from being put in place to claim that an increase in equity , and the corresponding allowance , is higher than it actually is , for example , through an increase in loan financing receivables or overvaluation of assets. moreover , the general anti-tax abuse rule in article 6 of council directive (eu) 2016/116415 applies against abusive acts which are not covered by the specific anti-tax avoidance framework of this directive. member states should also make sure the measures taken in the framework of this directive are compliant with the code of conduct group on business taxation.


### (7) to effectively address the tax-related debt-equity bias in a manner sustainable for the union’s public finances , an allowance for equity financing should be accompanied by a limitation on the deductibility of debt financing costs. an interest limitation rule should therefore limit the deductibility of exceeding borrowing costs and apply independently from the allowance. given the different objectives between such a rule and the existing anti-tax avoidance rule on interest limitation of article 4 of directive (eu) 2016/1164 , both rules should be maintained. taxpayers should first calculate the deductibility of exceeding borrowing costs under this directive and then under atad. in the event that the latter results in a lower amount of deductible exceeding borrowing costs , the taxpayer should deduct this lower amount and carry forward or back any difference between the two amounts in accordance with article 4 of atad. ### (7) to effectively address the tax-related debt-equity bias in a manner sustainable for the union’s public finances , an allowance for equity financing should be accompanied by a limitation on the deductibility of debt financing costs , except for micro , small and medium-sized enterprises. an interest limitation rule should therefore limit the deductibility of exceeding borrowing costs and apply independently from the allowance. given the different objectives between such a rule and the existing anti-tax avoidance rule on interest limitation of article 4 of directive (eu) 2016/1164 , both rules should be maintained. taxpayers should first calculate the deductibility of exceeding borrowing costs under this directive and then under atad. in the event that the latter results in a lower amount of deductible exceeding borrowing costs , the taxpayer should deduct this lower amount and carry forward or back any difference between the two amounts in accordance with article 4 of atad. this provision should be consistent with directive 2016/1164 so that it does not hamper eu’s attractiveness to investors , or adds any complexity for companies.


### (9) in order to evaluate the effectiveness of this directive , the commission should prepare and publish an evaluation report on the basis of the information provided by member states and of other available data. ### (9) in order to evaluate the effectiveness of this directive , the commission should prepare and publish an evaluation report on the basis of the information provided by member states and of other available data. the commission’s report should be published and , if appropriate , accompanied by a review with a view to increasing the effectiveness of this directive and by a legislative proposal amending this directive.


### (9) in order to evaluate the effectiveness of this directive , the commission should prepare and publish an evaluation report on the basis of the information provided by member states and of other available data. ### (9) in order to evaluate the effectiveness of this directive , as well as its impact on smes and on tax revenues in member states , the commission should prepare and publish an evaluation report on the basis of the information provided by member states and of other available data.


### 1. member states shall ensure that a taxpayer is able to deduct from its taxable base for corporate income tax purposes exceeding borrowing costs as defined in article 1 , point (2) , of council directive (eu) 2016/116435 up to an amount (a) corresponding to 85% of such costs incurred during the tax period. if such amount is higher than the amount (b) determined in accordance with article 4 of directive (eu) 2016/1164 , member states shall ensure that the taxpayer be entitled to deduct only the lower of the two amounts in the tax period. the difference between the two amounts (a) and (b) shall be carried forward or back in accordance with article 4 of directive (eu) 2016/1164. ### 1. member states shall ensure that a taxpayer , except for micro , small and medium-sized enterprises as defined in the commission’s recommendation of 6 may 2003 , is able to deduct from its taxable base for corporate income tax purposes exceeding borrowing costs as defined in article 1 , point (2) , of council directive (eu) 2016/116435 up to an amount (a) corresponding to 85% of such costs incurred during the tax period. if such amount is higher than the amount (b) determined in accordance with article 4 of directive (eu) 2016/1164 , member states shall ensure that the taxpayer be entitled to deduct only the lower of the two amounts in the tax period. the difference between the two amounts (a) and (b) shall be carried forward or back in accordance with article 4 of directive (eu) 2016/1164.


### reports ### reports and review


### 1. by 31 december 2027 , the commission shall present a report to the european parliament and to the council on the implementation of this directive. ### 1. by 31 december 2027 , the commission shall present a report to the european parliament and to the council on the implementation of this directive. the report shall review and assess the impact of this directive on sme’s access to financing and on tax revenues in member states , and whether there is a need to amend this directive. where appropriate , the report shall be accompanied by a review with a view to increasing the effectiveness of this directive and a legislative proposal amending this directive.


### 1. by 31 december 2027 , the commission shall present a report to the european parliament and to the council on the implementation of this directive. ### 1. by 31 december 2027 , the commission shall present a report to the european parliament and to the council on the implementation of this directive. the report shall pay special attention to the link with other company tax legislation , namely a directive ensuring a minimum effective tax rate for the global activities of large multinational groups and a directive on framework for income taxation in europe (befit).


### 9. notes the importance of active monetary policy in alleviating the pressure of financial constraints on small and medium-sized enterprises; acknowledges that the percentage of smes facing financial constraints decreased from 18 % in 2009-12 to 8 % in 2016-19; ### 9. notes the importance of active monetary policy in alleviating the pressure of financial constraints on small and medium-sized enterprises; acknowledges that the percentage of smes facing financial constraints decreased from 18 % in 2009-12 to 8 % in 2016-19; underlines that the covid-crisis has a strong impact on smes;


### 10. asks the ecb to monitor the proportionality of quantitative easing to the risks in its balance sheets , asset price inflation and the potential misallocation of resources; ### 10. asks the ecb to monitor the proportionality of quantitative easing to the risks in its balance sheets , asset price inflation and the potential misallocation of resources; notes that , in using this tool , the ecb is also encouraging member states to run up greater debts , which is unfair on future generations;


### 12. notes the linkage between monetary policy and increasing housing prices in the euro area; emphasises that the persistently high housing cost overburden rate of 9.6 % in 2018 is expected to increase due to the pandemic , and asks the ecb to evaluate the regional and sectoral impact of its quantitative easing programme on the cost of living across the union; ### 12. notes the linkage between monetary policy and increasing housing prices in the euro area; emphasises that the persistently high housing cost overburden rate of 9.6 % in 2018 is expected to increase due to the pandemic , and asks the ecb to evaluate the regional and sectoral impact and the inter-generational fairness of its quantitative easing programme on the cost of living across the union;


### 18. expresses concern about the steadily increasing divergence of target2 balances within the escb; notes that the interpretation of these divergences is contested; ### 18. expresses concern about the steadily increasing divergence of target2 balances within the escb; notes that germany's target2 balance already exceeded eur 1.1 trillion in september 2020 ,1a that in its reply to letter qz 120 the ecb confirmed that such claims were comparable to those indicative of a currency break-up;1b stresses that these target2 balances are not likely to fall , and that , logically , these balances will probably increase further in future; points out that national central banks have no way of recovering these liabilities , and that in the free economy a debt that cannot be recovered should be written off , that this state of affairs is increasingly undermining the credibility and reputation of the ecb; stresses , therefore , that the ecb should propose ways of dealing with this problem in a credible manner , for example by posting collateral or through the regular settlement of balances using tangible assets such as gold or foreign exchange reserves;


### 23. welcomes bulgaria and croatia’s entry into erm ii in july 2020; supports a swift target date for the adoption of the euro in both countries; welcomes the comprehensive screening of croatian and bulgarian banks by the ecb in july and august 2019; ### 23. welcomes bulgaria and croatia’s entry into erm ii in july 2020; believes , however , that it would be better if the two countries were to wait before adopting the euro; welcomes the comprehensive screening of croatian and bulgarian banks by the ecb in july and august 2019;


### 27. recalls the german federal constitutional court decision of 5 may 2020 on the ecb , as well as the ecb governing council statement of the same day; notes the continuous proportionality assessment of all programmes; lauds the ecb’s subsequent decision to disclose non-public documents related to the public sector purchase programme (pspp) to the bundesbank; ### 27. recalls the german federal constitutional court decision of 5 may 2020 on the ecb , as well as the ecb governing council statement of the same day; notes the continuous proportionality assessment of all programmes; lauds the ecb’s subsequent decision to disclose non-public documents related to the public sector purchase programme (pspp) to the bundesbank , but insists that the ecb's action must not undermine the no-bailout principle and be consistent with the ban on the monetary financing of governments;


### 2. considers that fintech will be integral to the success of the capital markets union (cmu) and encourages the commission to consider how to harness the benefits of fintech in driving forward capital market integration in the union; ### 2. considers that fintech will be integral to the success of the capital markets union (cmu) and encourages the commission to consider how to harness the benefits of fintech in driving forward capital market integration in the union , in particular , the participation of retail investors;


### 5. calls on the commission to act as first mover in order to create a favourable environment for european fintech hubs and firms to scale up; ### 5. commends the commission’s initiative to establish a european forum for innovation facilitators (efif) in april 2019; calls on the commission to draw upon the knowledge and experience derived from the efif and to act as first mover in order to create a favourable environment for european fintech hubs and firms to scale up;


### 6. stresses that law and supervision in the area of fintech should be based on the following principles: ### 6. stresses that measures taken should ensure that market players , from small to large , have the regulatory space to innovate and that regulation and supervision in the area of fintech should be based on the following principles:


### 7. points out that union level measures should not stifle opportunities for businesses to grow and develop within the union; ### 7. points out that measures adopted at eu level should not stifle opportunities for businesses to grow and develop within the union and beyond;


### 9. considers that developing a pan-european taxonomy for crypto-assets is desirable as a step towards fostering a common understanding , facilitating collaboration across jurisdictions and providing greater regulatory certainty for market participants engaged in cross border activity; recommends taking into account the importance of international cooperation and global initiatives as regards frameworks for crypto-assets , bearing in mind in particular their borderless nature; cautions , however , that developing an open-ended taxonomy template may be more appropriate for this evolving market segment; ### 9. considers that developing a pan-european taxonomy for crypto-assets is desirable as a step towards fostering a common understanding , facilitating collaboration across jurisdictions and providing greater regulatory certainty for market participants engaged in cross border activity; recommends taking into account existing national regulatory and supervisory frameworks and the importance of international cooperation and global initiatives as regards frameworks for crypto-assets , bearing in mind in particular their borderless nature; proposes , however , that developing an open-ended taxonomy template may be more appropriate for this evolving market segment;


### 9. considers that developing a pan-european taxonomy for crypto-assets is desirable as a step towards fostering a common understanding , facilitating collaboration across jurisdictions and providing greater regulatory certainty for market participants engaged in cross border activity; recommends taking into account the importance of international cooperation and global initiatives as regards frameworks for crypto-assets , bearing in mind in particular their borderless nature; cautions , however , that developing an open-ended taxonomy template may be more appropriate for this evolving market segment; ### 9. considers that developing a pan-european taxonomy for crypto-assets is desirable as a step towards fostering a common understanding , facilitating collaboration across jurisdictions and providing greater regulatory certainty for market participants engaged in cross border activity; recommends taking into account the importance of international cooperation and global initiatives as regards frameworks for crypto-assets , bearing in mind in particular their borderless nature; proposes , however , that developing an open-ended taxonomy template may be more appropriate for this evolving market segment;


### 11. further stresses that clear guidance on the applicable regulatory and prudential processes is needed in order to provide regulatory certainty regarding crypto-assets; ### 11. further stresses that clear guidance on the applicable regulatory and prudential processes is needed in order to provide regulatory certainty regarding crypto-assets; notes that such guidance from the commission and from esma could lead to establishing a transitional pilot regime , limited in time and in scope , with targeted regulatory exemptions for crypto-assets applying existing sectorial legislation , subject to enhanced supervision from relevant national supervisory authorities and from the joint esas committee;


### 13. highlights that a common union framework on crypto-assets should help increase consumer and investor protection , enhance know your customer (kyc) obligations and oversight of the underlying technology; ### 13. highlights that a common union framework on crypto-assets should help address concerns related to consumer and investor protection , cybersecurity , market integrity and financial stability , and should enhance anti money laundering (aml) , counter terrorist financing (ctf) and know your customer (kyc) obligations , and oversight of the underlying technology;


### 15. calls on the commission to propose legislative changes in the area of ict and cyber security requirements for the union financial sector in order to address any inconsistencies , gaps and loopholes that are found to exist in relevant law; ### 15. calls on the commission to propose legislative changes in the area of ict and cyber security requirements for the union financial sector in order to address any inconsistencies , gaps and loopholes that are found to exist in relevant law; in this regard , calls on the commission to consider the need to have a supervisory overview of the ict providers , noting the concentration and contagions risks that can be posed by a heavy reliance by the financial services sector on a small number of ict and cloud computing providers;


### 15. calls on the commission to propose legislative changes in the area of ict and cyber security requirements for the union financial sector in order to address any inconsistencies , gaps and loopholes that are found to exist in relevant law; ### 15. calls on the commission to propose legislative changes in the area of ict and cyber security requirements for the union financial sector in order to address any inconsistencies , gaps and loopholes that are found to exist in relevant law; notes that over reliance on non-eu ict services providers , and on ict products and services offered by non-eu market participants , is a particular area of concern;


### a. modernisation; ### a. modernisation of ict governance and risk management;


### 18. recalls that the collection and analysis of data play a central role for fintech , and therefore highlights the need for consistent , technology-neutral application of existing data laws; ### 18. recalls that the collection and analysis of data play a central role for fintech , and therefore highlights the need for consistent , technology-neutral application of existing data laws; highlights that artificial intelligence is one of the key technologies as regards enhancing the union's competitiveness on a global level;


### 20. requests , in this regard , that the commission examines how to ensure that digital finance entities can access on an equitable basis relevant and useful data to help ensure that innovative fintech businesses can grow within the union and beyond; ### 20. requests , in this regard , that the commission examines how to ensure that digital finance entities can access on an equitable basis relevant and useful data , to foster the potential of digital finance and to provide the opportunities for innovative fintech businesses to grow within the union and beyond;


### 21. requests that the commission consider a framework for digital onboarding and the use of digital financial identities , which would aim to harmonise these measures across the union insofar as necessary; ### 21. requests that the commission consider , based on the existing eu standard eidas , an infrastructure for digital onboarding and the use of digital financial identities , which would aim to harmonise these measures across the union insofar as necessary;


### 2. to make a legislative proposal on cyber resilience , which ensures consistent standards of ict security across the union financial sector. such a framework should be future-oriented and focus on modernising the current rules applicable concerning cyber resilience , while also closing any regulatory loopholes and gaps , which may put businesses , investors and consumers at risk; ### 2. to make a legislative proposal on cyber resilience , which ensures consistent standards of ict security across the union financial sector. such a framework should be future-oriented and focus on modernising the current rules applicable concerning cyber resilience , while also closing any regulatory loopholes and gaps , which may put businesses , investors and consumers at risk. such a proposal should take due account of the risk of concentration and contagion stemming from the over reliance on a small number of ict service providers , particularly cloud computing providers;


### 2. to make a legislative proposal on cyber resilience , which ensures consistent standards of ict security across the union financial sector. such a framework should be future-oriented and focus on modernising the current rules applicable concerning cyber resilience , while also closing any regulatory loopholes and gaps , which may put businesses , investors and consumers at risk; ### 2. to make a legislative proposal on cyber resilience , which ensures consistent standards of ict security across the union financial sector. such a framework should be future-oriented and focus on modernising the current rules applicable concerning cyber resilience , while also closing any regulatory loopholes and gaps , which may put businesses , investors and consumers at risk. such a framework should aim to limit over reliance on non-eu ict services providers , and on ict products and services offered by non-eu market participants;


### (3) the following article is inserted: ### deleted


### 2. by way of derogation from paragraph 1 , institutions shall assign a risk weight of 100% to the senior securitisation position in a traditional npe securitisation , provided the exposures in the pool backing the securitisation have been transferred to the sspe with a non-refundable price discount of at least 50% on the nominal amount of the exposures. ### 2. by way of derogation from paragraph 1 , institutions shall assign a risk weight of 100% to the senior securitisation position in a traditional npe securitisation , provided that the resulting non-refundable purchase price discount is at least 50%.


### (1) the covid-19 pandemic is severely affecting people , companies , health systems and the economies of member states. the commission , in its communication to the european parliament , the european council , the council , the european economic and social committee and the committee of the regions of 27 may 2020 entitled ‘europe's moment: repair and prepare for the next generation’8 stressed that liquidity and access to finance will be a continued challenge in the months to come. it is therefore crucial to support the recovery from the severe economic shock caused by the covid-19 pandemic by introducing targeted amendments to existing pieces of financial legislation. this package of measures is adopted under the label “capital markets recovery package”. ### (1) the covid-19 pandemic is severely affecting people , companies , health systems and the economies of member states. the commission , in its communication to the european parliament , the european council , the council , the european economic and social committee and the committee of the regions of 27 may 2020 entitled ‘europe's moment: repair and prepare for the next generation’8 stressed that liquidity and access to finance will be a continued challenge in the months to come. it is therefore crucial to support the recovery from the severe economic shock caused by the covid-19 pandemic by introducing targeted amendments to existing pieces of financial legislation. the overall aim of the amendments should therefore be the removal of unnecessary red tape and make temporary exceptions that are deemed effective in order to mitigate the economic turmoil. the amendments should avoid making changes that cause more burdens to the sector and leave complex legislative questions to be sorted in the planned review of mifid ii. this package of measures is adopted under the label “capital markets recovery package”.


### (4) product governance requirements can restrict the sale of corporate bonds. corporate bonds with a “make whole clause” are generally considered safe and simple products that are eligible for retail clients. such a “make whole clause” protects investors against losses in case an issuer opts for early repayment by ensuring that those investors are provided with a payment equal to the net present value of the coupons they would have received if the bond would not have been called. the product governance requirements should therefore no longer apply to corporate bonds with such “make-whole clauses”. ### (4) product governance requirements are an important tool regarding investor protection. exemptions reduce the effectiveness of product governance requirements and diverge the level-playing field. moreover , product governance requirements are already lower with regard to less complex and less risky instruments. therefore , a thorough impact assessment and risk analysis should be part of the upcoming mifid review , before certain instruments get exempted from the product governance requirements.


### (10) directive 2014/65/eu allows persons that trade in commodity derivatives , emission allowances and derivatives on emission allowances on a professional basis to make use of an exemption from authorisation as an investment firm when their trading activity is ancillary to their main business. those persons applying for the ancillary activity test are required to notify the relevant competent authority annually that they make use of that possibility and provide the necessary elements to satisfy the two quantitative tests that determine whether its trading activity is ancillary to its main business. the first test compares the size of an entity's speculative trading activity to the total trading activity in the union on an asset class basis. the second test compares the size of the speculative trading activity , with all asset classes included , to the total trading activity in financial instruments by the entity at group level. there is an alternative form of the second test , which consists of comparing the estimated capital used for the speculative trading activity to the actual amount of capital used at group level for the main business. those quantitative tests are particularly complex and have not altered the status quo in terms of persons that are eligible for the exemption. therefore , the exemption should rely solely on qualitative elements. persons that are eligible for the exemption , including market makers , are dealing on own account or providing investment services other than dealing on own account , to customers or suppliers of their main business. the exemption is available for both cases individually and on an aggregate basis where this is an ancillary activity , when considered on a group basis. that exemption should not be available for persons who apply a high-frequency algorithmic trading technique or are part of a group the main business of which is the provision of investment services , or banking activities , or acting as a market maker in relation to commodity derivatives. all provisions regarding the quantitative elements should be deleted. ### (10) directive 2014/65/eu allows persons that trade in commodity derivatives , emission allowances and derivatives on emission allowances on a professional basis to make use of an exemption from authorisation as an investment firm when their trading activity is ancillary to their main business. those persons applying for the ancillary activity test are required to notify the relevant competent authority annually that they make use of that possibility and provide the necessary elements to satisfy the two quantitative tests that determine whether its trading activity is ancillary to its main business. the first test compares the size of an entity's speculative trading activity to the total trading activity in the union on an asset class basis. the second test compares the size of the speculative trading activity , with all asset classes included , to the total trading activity in financial instruments by the entity at group level. there is an alternative form of the second test , which consists of comparing the estimated capital used for the speculative trading activity to the actual amount of capital used at group level for the main business. those quantitative tests should remain the baseline rule for the ancillary activity exemption. as an alternative , national supervisory authorities may be authorised to rely on qualitative elements , subject to clearly defined conditions. esma should be empowered to provide guidance on the circumstances under which national authorities could apply a qualitative approach as well as develop draft regulatory technical standards on the qualitative criteria. persons that are eligible for the exemption , including market makers , are dealing on own account or providing investment services other than dealing on own account , to customers or suppliers of their main business. the exemption would be available for both cases individually and on an aggregate basis where this is an ancillary activity , when considered on a group basis. that exemption should not be available for persons who apply a high-frequency algorithmic trading technique or are part of a group the main business of which is the provision of investment services , or banking activities , or acting as a market maker in relation to commodity derivatives. all provisions regarding the quantitative elements should be deleted.


### paragraph 4 is deleted; ### deleted


### (62a) ‘electronic format’ means any durable medium other than paper; ### (62a) ‘electronic format’ means any durable medium other than paper , including websites;


### the requirements laid down in the second to fifth subparagraphs of this paragraph shall not apply to corporate bonds with make-whole clauses.; ### the requirements laid down in the second to fifth subparagraphs of this paragraph shall not apply to corporate bonds with make-whole clauses.; no further exemptions towards the product governance shall be foreseen in this regard.


### the requirements laid down in the second to fifth subparagraphs of this paragraph shall not apply to corporate bonds with make-whole clauses.; ### the requirements laid down in the second to fifth subparagraphs of this paragraph shall not apply to bonds with make-whole clauses.;


### this paragraph shall not apply to corporate bonds with make-whole clauses.; ### this paragraph shall not apply to bonds with make-whole clauses.;


### 5a. investment firms shall provide all information required by this directive to clients or potential clients in electronic format , except where the client or potential client is a retail client or potential retail client who has requested receiving the information on paper , in which case that information shall be provided on paper and free of charge. ### 5a. investment firms shall provide all information required to be provided in a durable medium (art. 4 (1) (62a)) to clients or potential clients in electronic format , except where the client or potential client is a retail client or potential retail client who has requested receiving the information on paper , in which case that information shall be provided on paper. investment firms have 24 months to implement this requirement following the entry into force of this directive.


### investment firms shall inform retails clients or potential retail clients that they have the option to receive the information on paper. ### deleted


### investment firms shall inform existing retail clients that used to receive the information required by this directive on paper about the fact that they will receive that information in electronic form at least eight weeks before sending that information in electronic form. investment firms shall inform the existing retail clients that they have the choice to either continue receiving information on paper or to switch to information in electronic format. investment firms shall also inform existing retail clients that an automatic switch to the electronic format will follow where they do not request the continuation of the provision of the information on paper within that eight weeks period.; ### deleted


### investment firms shall inform existing retail clients that used to receive the information required by this directive on paper about the fact that they will receive that information in electronic form at least eight weeks before sending that information in electronic form. investment firms shall inform the existing retail clients that they have the choice to either continue receiving information on paper or to switch to information in electronic format. investment firms shall also inform existing retail clients that an automatic switch to the electronic format will follow where they do not request the continuation of the provision of the information on paper within that eight weeks period.; ### investment firms shall inform existing retail clients that used to receive the information required by this directive on paper about the fact that they will receive that information in electronic form at least eight weeks before sending that information in electronic form. investment firms shall inform the existing retail clients that they have the choice to either continue receiving information on paper or to switch to information in electronic format. investment firms shall also inform existing retail clients that an automatic switch to the electronic format will follow where they do not request the continuation of the provision of the information on paper within that eight weeks period. existing clients who already receive the information in an electronic format do need to be informed.


### (5) in article 25(2) , the following subparagraph is added: ### deleted


### (21) member states should designate the competent authorities that would be responsible to supervise the requirements that on-balance-sheet synthetic securitisation have to meet in order to qualify for the sts designation. the competent authority could be the same as the one designated to supervise the compliance of originators , sponsors and sspes with the requirements that traditional securitisations have to meet in order to acquire the sts designation. like in the case of traditional securitisations , such competent authority could be different from the competent authority responsible to supervise the compliance of originators , original lenders , sspes , sponsors and investors with the prudential obligations incumbent under articles 5 to 9 of regulation (eu) 2017/2402 , and the compliance of which , given the prudential dimension of those obligations , was specifically entrusted to the competent authorities in charge of the prudential supervision of the relevant financial institutions. ### (21) member states should designate the competent authorities that would be responsible to supervise the requirements that on-balance-sheet synthetic securitisation have to meet in order to qualify for the sts designation. the competent authority could be the same as the one designated to supervise the compliance of originators , sponsors and sspes with the requirements that traditional securitisations have to meet in order to acquire the sts designation. like in the case of traditional securitisations , such competent authority could be different from the competent authority responsible to supervise the compliance of originators , original lenders , sspes , sponsors and investors with the obligations incumbent under articles 5 to 9 of regulation (eu) 2017/2402.


### transactions that feature non-sequential amortisation shall have triggers for the performance of the underlying exposures changing the amortisation to sequential in order of seniority. such performance-related triggers shall include the deterioration in the credit quality of the underlying exposures below a pre-determined threshold. ### deleted


### an interim credit protection payment shall be made at the latest six months after a credit event as referred to in paragraph 1 has occurred in cases where the debt workout of the losses for the relevant underlying exposure has not been completed by the end of that six months period. the interim credit protection payment shall be at least the higher of the following: ### an interim credit protection payment shall be made at the latest six months after a credit event as referred to in paragraph 1 has occurred in cases where the debt workout of the losses for the relevant underlying exposure is not expected to have been completed by the end of that six months period. the interim credit protection payment shall be not less than one of the following:


### the impairment recorded by the originator in its financial statements in accordance with the applicable accounting framework at the time the interim payment is made; ### the impairment recorded by the originator in its financial statements in accordance with the applicable accounting framework at the time the interim payment is made; and


### the amount of the credit protection payment shall be calculated at the level of the individual underlying exposure for which a credit event has occurred. ### deleted


### exercise of an option to call the transaction at a given point in time (time call) , when the time period measured from the closing date is equal to or greater than the weighted average life of the initial reference portfolio at closing; ### deleted


### collateral in the form of cash held with a third-party credit institution or in the form of cash on deposit with the originator , subject to a minimum credit quality step 2 as referred to in article 136 of regulation (eu) no 575/2013. ### collateral in the form of cash held with a third-party credit institution or in the form of cash on deposit with the originator , where the originator must have provided the protection seller with recourse to collateral securities. such collateral securities should have a nominal value that is not less than the outstanding balance of the protected tranche and if the maturity date of the collateral securities falls beyond the next payment date , then such collateral should be subject to an arrangement that provides for margining on a daily basis with additional collateral securities or cash.


### collateral in the form of cash held with a third-party credit institution or in the form of cash on deposit with the originator , subject to a minimum credit quality step 2 as referred to in article 136 of regulation (eu) no 575/2013. ### collateral in the form of cash held with a third-party credit institution or in the form of cash on deposit with the originator , subject to a minimum credit quality step 3 as referred to in article 136 of regulation (eu) no 575/2013.


### for the purposes of point (b) , where the third-party credit institution or the originator no longer satisfy the minimum credit quality step 2 , the collateral shall be promptly transferred to a third-party credit institution with a credit quality step of 2 or higher or the collateral shall be invested in securities meeting the criteria laid down in point (a) of this paragraph. the requirements set out in this point (b) shall be deemed satisfied in the case of investments in credit linked notes issued by the originator , in accordance with article 218 of regulation (eu) no 575/2013. ### for the purposes of point (b) , where the third-party credit institution or the originator no longer satisfy the minimum credit quality step 3 , the collateral shall be promptly transferred to a third-party credit institution with a credit quality step of 2 or higher or the collateral shall be invested in securities meeting the criteria laid down in point (a) of this paragraph. the requirements set out in this point (b) shall be deemed satisfied in the case of investments in credit linked notes issued by the originator , in accordance with article 218 of regulation (eu) no 575/2013.


### — having regard to the treaty on the functioning of the european union (tfeu) , in particular articles 122(2) facilitating financial assistance to member states in difficulties or seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control , ### — having regard to the treaty on the functioning of the european union (tfeu) , in particular articles 122(2) facilitating financial assistance to member states in difficulties or seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control , and article 126 stipulating that member states must avoid excessive government deficits ,


### (2) regulation (eu) 2017/1129 of the european parliament and of the council14 lays down requirements for the drawing up , approval and distribution of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market in the union. as part of the measures to help issuers to recover from the economic shock resulting from the covid-19 pandemic , targeted amendments to the prospectus regime are necessary. such amendments should enable issuers and financial intermediaries to reduce costs and free up resources for the recovery phase in the immediate aftermath of the crisis. ### (2) regulation (eu) 2017/1129 of the european parliament and of the council14 lays down requirements for the drawing up , approval and distribution of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market in the union. as part of the measures to help issuers to recover from the economic shock resulting from the covid-19 pandemic , targeted amendments to the prospectus regime are necessary. such amendments should enable issuers and financial intermediaries to reduce costs and free up resources for the recovery phase in the immediate aftermath of the crisis , while ensuring a high level of investor protection.


### the purpose is to describe the most material risks that are specific to the issuer and the shares. ### a description of the material risks that are specific to the issuer and that may affect the issuer’s ability to fulfil its obligations under the securities , in a limited number of categories , in a section headed ‘risk factors’.


### a. whereas all actions taken to create a capital markets union (cmu) should have improving the range of financing options offered to companies and citizens , as well as a greater range of more attractive investment offers , as their objective; ### a. whereas all actions taken to create a capital markets union (cmu) should have as their core objectives improving the range of financing options offered to companies and citizens , as well as fostering the availability of a greater range of more attractive investment offers , to incentivise financial participation and to turn savers into investors; whereas access to equity financing for smes , entrepreneurs and the social economy has become even more crucial for the covid-19 recovery;


### b. whereas the actions taken so far to achieve the cmu are moving in the right direction; whereas much work nevertheless remains to be done in terms of the precision , effectiveness and simplification of the measures adopted; ### b. whereas the actions taken so far to achieve the cmu are moving in the right direction; whereas much work nevertheless remains to be done in terms of the precision , effectiveness and simplification of the measures adopted; whereas an ambitious vision for the cmu project is essential to overcome national sensitivities and build the momentum to complete the cmu;


### c. whereas the social and economic crisis resulting from covid-19 will have a particularly negative impact on smes and retail savers; whereas the eu’s response to covid-19 through the european recovery plan should provide a large injection of capital in order to increase european enterprises’ access to finance; ### c. whereas the social and economic crisis resulting from covid-19 will have a particularly negative impact on smes and retail savers; whereas the eu’s response to covid-19 through the european recovery plan should provide a large injection of capital in order to increase european enterprises’ access to finance; whereas capital market financing is needed to increase the overall financing capacity and to reduce the reliance on bank lending in the eu;


### 1. calls for the removal of barriers , including the simplification of legislation , to diversify funding sources for smes , in order to promote smes’ ability to access equity markets , and to reduce the existing debt bias; points out that the current situation makes smes more fragile and vulnerable; ### 1. calls for the removal of barriers , including the simplification of legislation where relevant and conducive to financial stability , to diversify funding sources for start-ups , smes and mid-caps , in order to promote their ability to access equity markets , and to reduce the existing debt bias; notes that necessary measures include facilitating investment research , streamlining the definition of smes across relevant eu legislation , and easing issuance requirements to ensure that start-ups , smes and mid-caps find their way to public markets; calls on the member states to rebalance debt-equity bias in taxation; points out that the current situation makes smes more fragile and vulnerable; calls on the introduction of an ‘sme test’ for impact assessments on each cmu initiative;


### 1. calls for the removal of barriers , including the simplification of legislation , to diversify funding sources for smes , in order to promote smes’ ability to access equity markets , and to reduce the existing debt bias; points out that the current situation makes smes more fragile and vulnerable; ### 1. calls for the removal of barriers , including the simplification of legislation , to diversify funding sources for smes , in order to promote smes’ ability to access equity markets , and to reduce the existing debt bias; points out that the current situation makes smes more fragile and vulnerable; stresses that this is an additional funding channel , which does not , however , call into question existing bank connections;


### 2. takes the view that the efficiency of financial markets should be improved and that the listing of companies should be facilitated; encourages the creation and prioritisation of a large private pan-european fund , an initial public offering (ipo) fund , to support smes; ### 2. takes the view that the efficiency of financial markets should be improved and that the listing of companies should be facilitated , hereunder that sme's more easily can access capital from investors from other member states; encourages the creation and prioritisation of a large private pan-european fund , an initial public offering (ipo) fund , to support smes;


### 4. requests the realignment of the treatment of cash and synthetic securitisations , of the treatment of regulatory capital and liquidity with that of covered bonds and loans , as well as with the disclosure and due diligence requirements for covered bonds and simple , transparent and standardised (sts) securitisation; ### 4. requests the realignment of the treatment of synthetic securitisations , of the treatment of regulatory capital and liquidity with that of covered bonds and loans , as well as with the disclosure and due diligence requirements for covered bonds and simple , transparent and standardised (sts) securitisation;


### 4. requests the realignment of the treatment of cash and synthetic securitisations , of the treatment of regulatory capital and liquidity with that of covered bonds and loans , as well as with the disclosure and due diligence requirements for covered bonds and simple , transparent and standardised (sts) securitisation; ### 4. requests the commission to assess how targeted amendments to the securitisation regulation could free up financing capacity; such targeted amendments could include the realignment of the treatment of cash and synthetic securitisations , of the treatment of regulatory capital and liquidity with that of covered bonds and loans , as well as with the disclosure and due diligence requirements for covered bonds and simple , transparent and standardised (sts) securitisation;


### 5. calls for targeted measures within securities market legislation to expedite the recovery after the covid-19 crisis; supports changes in the prospectus regulation , the markets in financial instruments directive (mifid) , the securitisation regulation and the market abuse regulation to facilitate investments in the real economy , in particular in smes , and to allow newcomers and new products to enter the markets , preserving consumer protection and market integrity; ### 5. calls for targeted measures within securities market legislation that could help expedite the recovery after the covid-19 crisis as part of a broad package of measures to increase public and private financing; welcomes targeted changes in the prospectus regulation , the markets in financial instruments directive (mifid) , and the securitisation regulation as long as they aim to preserve market liquidity and transparency , and to facilitate investments in the real economy , in particular in smes and mid-caps; notes that , allowing newcomers and incumbent market players to offer new innovative products while preserving consumer protection and market integrity , is one of the strongest assets of the eu single market;


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


### 6. asks the member states to amend their national tax frameworks , in order to reduce tax obstacles to cross-border investments , including withholding tax procedures , and to increase financing by investors to long-term investment opportunities thereby improving returns on long-term savings for eu citizens; ### 6. asks the member states to deliver on repeated calls to amend their national tax frameworks , in order to reduce tax obstacles to cross-border investments , including through harmonising withholding tax procedures and exploring a common , standardised , eu-wide system for withholding tax relief at source , inspired from the oecd trace project , to rebalance the equity-debt bias penalising the financing of innovation through private investment , and to incentivise long-term investment opportunities for retail investors in order to help eu citizens gain better returns on their long-term savings;


### 7. highlights the importance of increasing legal certainty for cross-border investments by making national insolvency proceedings more efficient and effective; ### 7. highlights the importance of increasing legal certainty for cross-border investments by making national insolvency proceedings more efficient and effective , whilst taking into consideration the different legal systems across the member states , and by further harmonising rules on corporate governance , including a common definition of “shareholder” to facilitate the exercise of shareholder rights and the engagement with investee companies across the eu; calls on the commission to propose legislative initiatives and issue recommendations to member states , as appropriate , with a specific timeline for delivery , and aiming to achieve significant progress swiftly;


### 8. stresses the necessity of advancing further in the implementation of a genuinely single rule book for financial services in the internal market; ### 8. stresses the necessity of advancing further in the implementation and the enforcement of a genuinely single rule book for financial services in the internal market; calls on the commission and the esas to draw conclusions on the use of supervisory convergence tools through market movements related to the covid-19 crisis , and to suggest legislative and non-legislative initiatives to enhance the effectiveness of these tools as appropriate;


### 9. underlines the need to promote pension provision; welcomes the pan-european personal pension (pepp) product; reminds member states that pepps need to be subject to the same tax treatment as national pension products to become an option for savers; ### 9. underlines the need to promote pension provision , in particular third-pillar pensions; welcomes the pan-european personal pension (pepp) product; recalls that the tax treatment will be a key consideration for the take-up of future pepps; recalls the commission recommendation of 26 june 2017 , inviting member states to ensure that pepps are subject to the same tax treatment as national pension products; recalls that a deep and competitive market for pepp products , to the benefit of retail consumers , will only emerge if all providers can operate on a level playing field;


### 10. encourages the member states to promote multi-pillar pension systems , including occupational pension schemes , as a way to improve market dynamics and the incentives to invest; believes that private pensions should be revitalised and made more attractive; encourages the participation of investors in long-term products with tax reduction or exemption policies; ### 10. encourages the member states to promote multi-pillar pension systems , including occupational pension schemes and personal pension schemes , as a way to deepen the pools of european capital available for investment in strategic sectors through incentives for long-term investments; believes that private pensions should be revitalised and made more attractive; encourages the participation of investors in long-term products with tax incentive policies promoting a level playing field across providers and product types;


### 11. recalls that the solvency 2 directive requires a review by the end of 2020 and that the european insurance and occupational pensions authority (eiopa) will provide technical advice to the commission after consultations with different stakeholders; requests the commission and eiopa to consider adjusting the capital requirements for investments in equity and private debt , in particular of smes; ### 11. recalls that the solvency 2 directive requires a review by the end of 2020 and that the european insurance and occupational pensions authority (eiopa) will provide technical advice to the commission after consultations with different stakeholders; requests the commission and eiopa to consider adjusting the capital requirements for investments in equity and private debt , in particular of smes and mid-caps , to ensure that incentives for insurers and pension funds do not penalise equity investments; strongly calls on insurers and re-insurers to draw conclusions from the covid-19 crisis , including on the coverage of pandemic-related risks; encourages the rapid phasing out of national exemptions and to the reduction of ‘gold-plating’ in national implementation of solvency ii , to foster harmonisation and integration of the eu insurance and re-insurance market;


### 12. stresses the need for european and national supervisory authorities to overcome their differences; calls for supervisory convergence to promote a common european model , guided by the european securities and market authority (esma) , to reduce the existing obstacles to cross-border financial operations; ### 12. stresses the need for supervisory convergence to promote a common european model , highlights the crucial role of the european supervisory authorities (esas) in facilitating this; recalls the additional competences given and structural changes made to the esas by the recently adopted regulation (eu) 2019/2175; calls on the esas , together with the national supervisory authorities , to implement and exercise these changes as soon as possible to allow the esas to act swiftly to preserve financial stability and the orderly functioning and integrity of the market , and to reduce the existing obstacles to cross-border financial operations;


### 12. stresses the need for european and national supervisory authorities to overcome their differences; calls for supervisory convergence to promote a common european model , guided by the european securities and market authority (esma) , to reduce the existing obstacles to cross-border financial operations; ### 12. stresses the need for european and national supervisory authorities to work in close cooperation , particularly as regards supervisory consistency and information sharing; calls for changes to the esma regulation ensuring that esma can directly and decisively act and step in where national supervisory authorities fail to effectively perform their duty of ensuring the prevention of preventing serious threats to the orderly functioning and integrity of financial markets or the stability of the financial system in the union; strongly calls on the commission to present an ambitious reform of the governance of the esma , including the appointment of independent directors in the management board , with enhanced powers on supervisory convergence for cross-border activities , direct supervision and on the prevention against serious threats to the orderly functioning and integrity of financial markets or the stability of the financial system in the union; notes that the limited impact of supervisory convergence in promoting a common european model should lead to empowering the european securities and market authority (esma) , the european insurance and occupational pensions authority (eiopa) and the european banking authority (eba) , with a stronger role in reducing the existing obstacles to cross-border financial operations;


### 13. observes that financial services regulation is a very complex undertaking , with regulation at international , european and national level; encourages all relevant actors to address this complexity to ensure the proportionality of financial regulation and to remove unnecessary administrative burdens; ### 13. observes that financial services regulation is a very complex undertaking , with regulation at international , european and national level; encourages all relevant actors to address this complexity to ensure the proportionality of financial regulation and to remove unnecessary administrative burdens; also notes that proportionality of financial regulation can sometimes lead to increased complexity , and calls on the commission and member states to commit to significant efforts to streamline and harmonise existing and future rules , by phasing out national exemptions as appropriate , and by preventing ‘gold-plating’ of eu law at national level; highlights that regulations with clear timelines for transition and phasing out of existing regimes can build a smooth and steady path to regulatory convergence;


### 14. is concerned that retail investors’ engagement with financial markets remains low; calls for measures to promote retail investments in view of the demographic challenges faced by the eu by increasing the participation of retail investors in capital markets through more attractive and appropriate personal pension products; ### 14. is concerned that retail investors’ engagement with financial markets remains low; calls for measures to promote retail investments in view of the demographic challenges faced by the eu by increasing the participation of retail investors in capital markets through more attractive and appropriate personal pension products; calls on the commission to put forward initiatives specifically targeting retail investors , including facilitating the development of independent web-based eu comparison tools , to help retail investors determine the most appropriate products in terms of risk , return on investment and value for their particular needs , and promoting incentives for esg products and products typically associated with better value for money;


### 15. emphasises that access to financial markets should be possible for all enterprises under the ‘same business , same rules’ principle; ### 15. emphasises that access to financial markets should be possible for all enterprises under the ‘same business , same rules’ principle; notes that this principle is particularly relevant in the fintech and financial innovation spaces , and that reciprocal access to financial data should be balanced with the need to have a level playing field across all providers and product types;


### 16. recalls the existence of different shortcomings in the legislation on packaged retail investment and insurance products (priips) that should be addressed in the next review; expects that level 2 priips legislation on the key investor document to respect level 1 , in particular in relation to the performance scenarios; regrets the delays in the adoption of level 2 priips legislation that will overlap with the first review of priips , and which increases legal uncertainty and costs for stakeholders; ### 16. recalls the existence of different shortcomings in the legislation on packaged retail investment and insurance products (priips) that should be addressed as soon as possible , ahead of the application of the priips rules to ucits products; expects that level 2 priips legislation on the key investor document will be aligned with the level 1 text , in particular in relation to providing accurate , fair , clear and non-misleading pre-contractual information; regrets the delays in the adoption of level 2 priips legislation that will overlap with the first review of priips , and which increases legal uncertainty and costs for market participants , and could reduce understanding and confidence from retail investors; calls for a more fundamental review of rules applicable to the distribution of financial products across the entirety of the retail investment space , in particular under mifid , idd and priips , aiming to harmonise and streamline the eu rulebook as appropriate; notes that eu rules on consumer protection should be adapted to the green and the digital transformations and put the interest of the retail investor at the forefront , regardless of the different types of providers and products;


### 17. urges the commission to make clear the differentiation between professional and retail investors on all levels of mifid , making it possible to tailor the treatment of clients according to their knowledge and experience on the markets; requests that the commission consider the introduction of a category of semi-professional investors to better respond to the reality of participation on the financial markets; ### 17. urges the commission to introduce more proportionality on the rules for professional and retail investors on all levels of mifid , making it possible to tailor the treatment of clients according to their knowledge and experience on the markets , while avoiding a fundamental change in mifid categorisation; suggests that the commission consider the introduction of an opt-in regime , allowing retail investors to choose to be treated as professional investors , notably in the area of information requirements;


### 17. urges the commission to make clear the differentiation between professional and retail investors on all levels of mifid , making it possible to tailor the treatment of clients according to their knowledge and experience on the markets; requests that the commission consider the introduction of a category of semi-professional investors to better respond to the reality of participation on the financial markets; ### 17. urges the commission to keep an eye on the regulatory costs arising in practice and to make clear the differentiation between professional and retail investors on all levels of mifid , making it possible to tailor the treatment of clients according to their knowledge and experience on the markets; points out that high regulatory costs in practice make advising retail investors unattractive for banks and thus de facto excludes retail investors from securities as an investment category; requests that the commission consider the introduction of a category of semi-professional investors to better respond to the reality of participation on the financial markets , or create an opt-in opportunity for retail investors so that they can dispense with the comprehensive notification obligation;


### 18. is of the opinion that the current reporting framework within mifid ii and the european market infrastructure regulation (emir) is very costly and complex , hindering the effectiveness of the system; believes that a simplification thereof is necessary; ### 18. recognises claims that the current reporting framework within mifid ii and the european market infrastructure regulation (emir) may be very costly and complex , which could hinder the effectiveness of the system; calls on the commission to explore whether a simplification thereof and streamlining across legislation is necessary , while ensuring that financial stability and market transparency is preserved at all times; highlights that any assessment of reporting and transparency in financial markets would not be complete without a proper review on the cost and availability of market data for all market participants;


### 19. calls for amendments to legislation to ensure access to independent advice by financial intermediaries while avoiding promotion of the institution’s own financial products and ensuring a fair marketing of financial products; ### 19. calls for amendments to legislation to ensure access to independent advice by financial intermediaries , to ensure that distributors do not promote financial products manufactured 'in-house' without a thorough assessment of products from other manufacturers , and to ensure a fair marketing of financial products; notes that esma adopted a nuanced view on a potential ban on inducements , and calls on the commission to explore alternative approaches , with similar effects on aligning interests across the entire distribution chain;


### 19. calls for amendments to legislation to ensure access to independent advice by financial intermediaries while avoiding promotion of the institution’s own financial products and ensuring a fair marketing of financial products; ### 19. calls for amendments to legislation to ensure access to independent advice by financial intermediaries and a fair marketing of financial products;


### 20. underlines that financial education is needed to overcome low retail investor engagement with financial markets , based on lack of knowledge , mistrust and risk aversion; ### 20. underlines that financial education is needed to overcome low retail investor engagement with financial markets , based on lack of knowledge , mistrust and risk aversion; notes that the capital market union should aim at fostering an “equity culture” for investors in europe and turning savers into investors , including with the development of mobile apps allowing for voting or proxy voting by individuals;


### 21. emphasises that financial education is a medium-term tool , which enriches the financial system and which is a good step for engaging retail investors with financial markets; ### 21. emphasises that financial education is a medium-term tool , which enriches the financial system and which is a good step for engaging retail investors with financial markets; notes that employee share ownership programmes are amongst the most effective means to increase financial awareness and literacy for eu adult citizens;


### 22. urges the member states to include financial literacy programs in school curricula aimed at developing autonomy in financial matters; suggests the inclusion of this topic in the programme for international student assessment (pisa) study; ### 22. urges the member states to include financial literacy in all curricula from school to university , with evolutive programs adapted to the needs of pupils and students and aimed at developing autonomy in financial matters; suggests the inclusion of this topic in the programme for international student assessment (pisa) study;


### 23. takes the view that the digitalisation of financial services can be a catalyst for the mobilisation of capital in the eu while reducing barriers and increasing supervisory efficiency; emphasises that an eu framework with high standards of cybersecurity would be conducive to the cmu; ### 23. takes the view that the digitalisation of financial services can be a catalyst for the mobilisation of capital and could help overcome the fragmentation of the financial markets in the eu while increasing supervisory efficiency; emphasises that an eu framework with high standards of cybersecurity would be conducive to the cmu; notes that ensuring robust protection against cybersecurity threats and other threats related to digitalisation , as well as rebalancing the over-reliance on non-eu ict services providers , or products developed by market participants based outside of the eu , by facilitating the development and scaling up of eu ict services providers and products , are key to enhancing the eu’s financial independence and strategic autonomy;


### 24. highlights that ‘sandboxes’ may be an adequate tool to enhance the innovation and competitiveness of the financial services sector; requests that the commission create a pan-european ‘sandbox’ for financial services; ### 24. highlights that ‘sandboxes’ may be an adequate tool to enhance the innovation and competitiveness of the financial services sector provided that sufficient safeguards are in place to prevent potential threats to the integrity , transparency , efficiency and orderly functioning of financial markets , and to the stability of the financial system; requests that the commission draws upon the experience gained from the european forum for innovation facilitators (efif) to assess whether a pan-european ‘sandbox’ for financial services would provide additional benefits for financial innovation; asserts that such a pan-european ‘sandbox’ should be established within the direct supervisory remit of the joint esas committee , in cooperation with relevant national supervisory authorities;


### 26. reiterates that eu legislation provides for the possibility of considering third-country rules as equivalent based on a proportional and risk-based analysis , and that such decisions should be taken through a delegated act; recalls that the eu can unilaterally withdraw any equivalence decision; ### 26. reiterates that eu legislation provides for the possibility of considering third-country rules as equivalent based on a technical , proportional and risk-based analysis , and that such decisions should be taken through a delegated act; recalls that the eu can unilaterally withdraw any equivalence decision; calls on the commission , in cooperation with the esas , and where relevant with national competent authorities , to establish a dynamic monitoring system on equivalence regimes , in the case of third country regulatory and supervisory divergences which could entail potential risks for the eu in terms of financial stability , market transparency , market integrity , investor and consumer protection and level-playing field; highlights that the commission should have emergency procedures in place to withdraw equivalence decisions in case of the need to swiftly act , bearing in mind the potential consequences of an emergency withdrawal of an equivalence decision;


### (7) in accordance with regulation (eu) 2016/679 of the european parliament and of the council46 , it is important that the obligation on a payment service provider , to retain and provide information in relation to a cross-border payment transaction , should be proportionate and should only be what is necessary for member states to fight e-commerce vat fraud. furthermore , the only information relating to the payer that should be retained is where the payer is located. with regard to information relating to the payee and the payment transaction itself , payment service providers should only be required to retain and transmit to tax authorities information which is necessary for tax authorities to detect possible fraudsters and to carry out vat controls. therefore , payment service providers should only be required to retain records on cross-border payment transactions which are likely to indicate economic activities. the introduction of a ceiling based on the number of payments received by a payee over the course of a calendar quarter would give a reliable indication that those payments were received as part of an economic activity , thereby excluding payments for non-commercial reasons. where such a ceiling is reached , the accounting obligation of the payment service provider would be triggered. ### (7) in accordance with regulation (eu) 2016/679 of the european parliament and of the council46 , it is important that the obligation on a payment service provider , to retain and provide information in relation to a cross-border payment transaction , should be proportionate and should only be what is necessary for member states to fight e-commerce vat fraud. furthermore , the only information relating to the payer that should be retained is where the payer is located. with regard to information relating to the payee and the payment transaction itself , payment service providers should only be required to retain and transmit to tax authorities information which is necessary for tax authorities to detect possible fraudsters and to carry out vat controls. therefore , payment service providers should only be required to retain records on cross-border payment transactions which are likely to indicate economic activities. the introduction of a ceiling based on the number of payments received by a payee over the course of a calendar quarter would give a reliable indication that those payments were received as part of an economic activity , thereby excluding payments for non-commercial reasons. where such a ceiling is reached , the accounting obligation of the payment service provider would be triggered. in order to ensure proportionality , and , furthermore , to ensure adherence with data protection provisions , payment service providers should be permitted to report transactions on an aggregated basis where appropriate.


### 2. the requirement referred to in paragraph 1 shall apply in circumstances where both of the following conditions are met: ### 2. the requirement to which payment service providers are subject to under paragraph 1 shall apply where , in the course of a calendar quarter , a payment service provider provides payment services corresponding to more than 25 cross-border payments to the same payee. the cross-border payments referred to in subparagraph 1 shall be calculated by reference to the payment services provided by the payment service provider per member state and per identifiers referred to in article 243c(2). where the payment service provider has information that the payee has several identifiers the calculation shall be made per payee.


### where funds are transferred by a payment service provider from a payer located in one member state to a payee located in another member state , in a third territory or in a third country; ### deleted


### in respect of the transfer of funds referred to in point (a) , where a payment service provider executes more than 25 payment transactions to the same payee in the course of a calendar quarter. ### deleted


### 3. the records referred to in paragraph 1 shall: ### 3. the requirement referred to in paragraph 1 shall not apply to payment services provided by the payment service providers of the payer as regards each payment where at least one of the payment service providers of the payee is located in a member state according to the bic or any other business identifier code that unambiguously identifies the payment service provider and its location. a payment service provider of the payer shall in any case include these payment services in the calculation referred to in paragraph 2.


### be kept by the payment service provider in electronic format for a period of two years from the end of the year during which the payment transaction was executed; ### deleted


### be made available to the member states of establishment of the payment service provider in accordance with article 24b of regulation (eu) no 904/2010 (*). ### deleted


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


### the bic or any other business identifier code that unambiguously identifies the payment service provider acting on behalf of the payer. ### where none of the identifiers referred to in subparagraph (a) is applicable , the bic or any other business identifier code that unambiguously identifies the payment service provider acting on behalf of the payer , as well as the location of that payment service provider.


### 1. the records kept by the payment service providers , in accordance with article 243b , shall contain the following information: ### 1. the records kept by the payment service providers , in accordance with article 243b , with regards to cross border payments , shall contain the following information:


### any executed payment refunds for payment transactions referred to in point (g); ### any executed payment refunds for payment transactions referred to in point (g) , if available;


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


### 2. is concerned that after a short economic recovery , euro area growth momentum has slowed markedly to 1.2 % of gdp in the euro area and to 1.4 % of gdp for the eu-27; underlines , therefore , the need for monetary policy to remain accommodative for the foreseeable future; ### 2. is concerned that after a short economic recovery , euro area growth momentum has slowed markedly to 1.2 % of gdp in the euro area and to 1.4 % of gdp for the eu-27; underlines , therefore , the need for monetary policy to remain accommodative for the foreseeable future; considers that member states with excess budgetary capacity should use that capacity to finance investments for the future in a way which complements ecb monetary policy;


### 4. underlines the findings of the escb expert group on low wage growth1 , which analysed the disconnect between wage growth and labour market recovery , namely that low wage growth over recent years can be explained mainly by technology and wage bargaining shocks , the latter being impacted by changes in wage bargaining structure – reducing the bargaining power of employees – and labour market regulations – mainly in countries most affected by the global economic and financial crisis and the combination of labour underutilisation , low inflation readings and subdued productivity growth; ### deleted


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


### - the deepening of the european monetary union , including a fiscal capacity for the euro area able to providing a counter-cyclical stabilisation function; ### - the deepening of the european monetary union , including a fiscal capacity for the euro area able to provide a counter-cyclical stabilisation function whilst ensuring that member states follow a sound budgetary policy;


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


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


### - the completion of the banking union , including a fully mutualised european deposit insurance scheme that would reduce risks , promote fair competition , facilitate the expansion of pan-european banking and reinforce the stability of the euro area as a whole; ### - the completion of the banking union , including a fully mutualised european deposit reinsurance scheme setup with the appropriate safeguards , that would help reduce risks , ensure a level playing field , promote fair competition , facilitate the expansion of pan-european banking and reinforce the stability of the euro area as a whole;


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


### - the creation of a safe asset guaranteed by euro-area member states to foster the integration of bond markets; ### - the market-led creation of a european safe asset through the reform of the regulatory treatment of sovereign exposures;


### 7. notes that on 12 september 2019 the ecb announced a broad stimulus package including an open-ended quantitative easing programme that will run at a monthly pace of eur 20 billion per month , a cut of 10 basis points in the deposit rate , a two-tier system for reserve remuneration , and easier terms for targeted longer-term refinancing operations (tltro-iii); ### 7. notes that on 12 september 2019 the ecb announced a broad stimulus package including an open-ended quantitative easing programme that will run at a monthly pace of eur 20 billion per month , a cut of 10 basis points in the deposit rate , a two-tier system for reserve remuneration , and easier terms for targeted longer-term refinancing operations (tltro-iii); is concerned about the fact that the ecb governing council's decision was not taken unanimously and calls on president lagarde to work towards bridging this divide;


### 8. notes that the negative effects on banks’ net interest income have been counterbalanced so far by the benefits from more bank lending and lower costs for provisions and losses; ### 8. notes that the negative effects on banks’ net interest income creates big problems especially for small banks that refrain from investing in riskier asset classes;


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


### 9. underlines that very low or negative interest rates offer opportunities to consumers , workers and borrowers , who can benefit from stronger economic momentum , lower unemployment and lower borrowing costs; ### 9. underlines that while very low or negative interest rates offer opportunities to consumers , workers and borrowers , it creates huge problems for small savers , pension systems and people saving for their retirements;


### 9. underlines that very low or negative interest rates offer opportunities to consumers , workers and borrowers , who can benefit from stronger economic momentum , lower unemployment and lower borrowing costs; ### 9. underlines that while very low or negative interest rates offer opportunities to consumers , workers and borrowers , who can benefit from stronger economic momentum , lower unemployment and lower borrowing costs , it is being perceived in certain member states as creating problems for small savers and pension systems;


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


### 11. recalls that , as an eu institution , the ecb is bound by the paris agreement on climate change and that this should be reflected in its policies , with full respect for its mandate and its independence; ### 11. recalls that , as an eu institution , the ecb is bound by the paris agreement on climate change and that this should be reflected in its policies , with full respect for its mandate and its independence; considers action against climate change lies within the current ecb mandate notably regarding financial stability;


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


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


### 14. is extremely worried about the risks due to the delay in setting up the banking union , and calls for the swift completion of the banking union with a fully mutualised european deposit guarantee scheme; ### 14. takes note of the repeated calls of the ecb for the establishment of a european deposit insurance scheme (edis) as the third pillar of the banking union; highlights the key role of deposit insurance for confidence-building and for ensuring the safety of all deposits within the banking union; stresses that edis could help further enhance and safeguard financial stability if properly designed , complementing a resolution and liquidation framework and covering all banks supervised pursuant to the single rule book;


### 14. is extremely worried about the risks due to the delay in setting up the banking union , and calls for the swift completion of the banking union with a fully mutualised european deposit guarantee scheme; ### 14. calls for the end of the sovereign-bank doom loop and the completion of the banking union through the establishment of a european deposit reinsurance scheme;


### 16. calls on the ecb to increase its monitoring of the development of crypto-currencies and the increased risks in cyber-security; ### 16. calls on the ecb to increase its monitoring of the risks in cyber-security and the development of crypto-assets , especially those that are privately managed , given the challenges they pose to the european union's monetary sovereignty;


### 17. calls on the ecb to ensure an appropriate balance between allowing regulatory financial innovation in fintech and ensuring financial stability; ### 17. calls on the ecb to ensure an appropriate balance between appropriate regulatory constraints , allowing financial innovation in fintech and ensuring financial stability;


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


### a. whereas the current international corporate tax rules can be dysfunctional , from the early 20th century and were not designed for the challenges of the digital economy; ### a. whereas the current international corporate tax rules need to be updated , as they date from the early 20th century and were not designed for the challenges of the digital economy;