### 20. supports the specification of the public interest assessment criteria so that the srm is applied in a more consistent and predictable manner; proposes that an alternative liquidation regime for small and medium-sized banks be considered; asks for a more proportionate setting of the minimum requirement for own funds and eligible liabilities (mrel) level; ### 20. considers it necessary to make resolution work for more banks , which requires reviewing the public interest assessment in order to allow resolution tools to be applied to a broader group of banks;


### 20. supports the specification of the public interest assessment criteria so that the srm is applied in a more consistent and predictable manner; proposes that an alternative liquidation regime for small and medium-sized banks be considered; asks for a more proportionate setting of the minimum requirement for own funds and eligible liabilities (mrel) level; ### 20. supports the specification of the public interest assessment criteria so that the srm is applied in a more consistent and predictable manner; asks for a more proportionate setting of the minimum requirement for own funds and eligible liabilities (mrel) level;


### 21. supports the updating of state aid rules in order to ensure their greater adequacy and consistency with the srm framework; emphasises that one of the goals of such an update should be to enable quick and effective interventions under the srm or in the alternative liquidation regime; ### 21. supports the updating of state aid rules , including a review of the banking communication of 30 july 2013 , in order to ensure their greater adequacy and consistency with the srm framework and to reduce discrepancies between the rules on state aid in the area of liquidation aid and the resolution regime under the bank recovery and resolution directive (brrd); emphasises that one of the goals of such an update should be to enable quick and effective interventions under the srm or in the alternative liquidation regime; calls on the commission to address these topics in the reviewed cmdi framework , with a view to enforcing the necessary alignment of incentives across crisis management methods , inside and outside resolution;


### 22. recalls that the ssm and the srm operate at eu level , while deposit guarantee schemes (dgss) are operated at national level; recognises that a european deposit insurance scheme (edis) would improve protection for depositors in the eu; ### 22. recalls that the ssm and the srm operate at eu level , while deposit guarantee schemes (dgss) are operated at national level; recognises that a european deposit insurance scheme (edis) would improve protection for depositors in the eu and contribute to unifying the banking market within the banking union;


### 23. notes the ongoing discussion of various concepts for the edis; ### 23. notes the ongoing discussion of various concepts for the edis and calls for an exemption for banks that have already a well established institutional protection scheme;


### 23. notes the ongoing discussion of various concepts for the edis; ### 23. notes the ongoing discussion of various concepts for the edis , including exceptions for well established institutional protection schemes;


### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction measures could enable an agreement on edis; ### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction measures could enable an agreement on edis; recognises risk reduction as a precondition for the establishment of risk-sharing mechanisms such as edis;


### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction measures could enable an agreement on edis; ### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction measures could enable an agreement on edis , exempting those institutions which already have a stringent risk sharing scheme in place;


### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction measures could enable an agreement on edis; ### 24. supports , alongside a strong political commitment , the gradual implementation of edis , in parallel to reforming the crisis management framework to enable a level playing field among deposit taking institutions throughout the banking union and a better protection of tax payers’ money;


### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction measures could enable an agreement on edis; ### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction is a necessary step for reaching an agreement on edis;


### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction measures could enable an agreement on edis; ### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the successful implementation of credible and effective risk reduction measures could enable an agreement on edis;


### 25. points out that any edis should take into account clear rules for the participation of non-euro area member states; ### deleted


### 26. supports streamlining the crisis management framework to make it more credible , coherent and effective; ### 26. supports updating the crisis management framework to make it more credible , coherent and effective;


### (5) the transmission programme of national accounts data should be updated to take into account changing user needs and new policy priorities , and the development of new economic activities in the union. ### (5) the transmission programme of national accounts data should be updated to take into account changing user needs , the nextgenerationeu , and new policy priorities , and the development of new economic activities in the union.


### (10) since the objective of this regulation , namely the creation of common statistical standards that permit the production of harmonised national accounts data , cannot be sufficiently achieved by the member states and can therefore be better achieved at union level , the union may adopt measures , in accordance with the principle of subsidiarity as set out in article 5 of the treaty on european union. in accordance with the principle of proportionality , as set out in that article , this regulation does not go beyond what is necessary in order to achieve that objective. ### (10) since the objective of this regulation , namely the creation of common statistical standards that permit the production of harmonised national accounts data for the sake of overall consistency , cannot be sufficiently achieved by the member states and can therefore be better achieved at union level , the union may adopt measures , in accordance with the principle of subsidiarity as set out in article 5 of the treaty on european union. in accordance with the principle of proportionality , as set out in that article , this regulation does not go beyond what is necessary in order to achieve that objective.


### (5) regulation (eu) no 909/2014 has introduced rules on settlement discipline to prevent and address failures in the settlement of securities transactions and therefore ensure the safety of transaction settlement. such rules include in particular reporting requirements , a cash penalties regime and mandatory buy-ins. despite the absence of experience in applying those rules , the development and specification of the framework in commission delegated regulation (eu) 2018/122940 has allowed all interested parties to better understand the regime and the challenges its application could give rise to. in this regard , the scope of cash penalties and mandatory buy-ins set out in article 7 of regulation (eu) no 909/2014 should be clarified , in particular by specifying which categories of transactions are excluded. such exclusions should cover in particular transactions that failed for reasons not attributable to the participants and transactions that do not involve two trading parties , for which the application of cash penalties or mandatory buy-ins would not be practicable or could lead to detrimental consequences for the market , such as certain transactions from the primary market , corporate actions , reorganisations , creation and redemption of fund units and realignments. the commission should be empowered to supplement regulation (eu) no 909/2014 by further specifying the details of such exclusions by means of a delegated act. ### (5) regulation (eu) no 909/2014 has introduced rules on settlement discipline to prevent and address failures in the settlement of securities transactions and therefore ensure the safety of transaction settlement. such rules include in particular reporting requirements , a cash penalties regime and mandatory buy-ins. despite the absence of experience in applying those rules , the development and specification of the framework in commission delegated regulation (eu) 2018/122940 has allowed all interested parties to better understand the regime and the challenges its application could give rise to. in this regard , the scope of cash penalties set out in article 7 of regulation (eu) no 909/2014 should be clarified , in particular by specifying which categories of transactions are excluded. such exclusions should cover in particular transactions that failed for reasons not attributable to the participants and transactions that do not involve two trading parties , for which the application of cash penalties would not be practicable or could lead to detrimental consequences for the market , such as certain transactions from the primary market , corporate actions , reorganisations , creation and redemption of fund units , realignments and free-of-payment securities transfers made in the context of the (de)mobilisation of collateral. the commission should be empowered to supplement regulation (eu) no 909/2014 by further specifying the details of such exclusions by means of a delegated act.


### (6) the overarching objective of the settlement discipline regime is to improve settlement efficiency within the union. however , the market volatility in 2020 amplified concerns about the potential negative effects of mandatory buy-in rules , both in normal and stressed market conditions. the application of those rules should therefore be subject to an assessment by the commission as to its appropriateness in the light of the evolution of settlement efficiency in the union. cash penalties and reporting requirements should however continue to apply in order to assess their impact on improving settlement efficiency in the union. considering the potential impacts of mandatory buy-in rules , such rules should apply only where certain conditions are met , namely where the application of cash penalties has not resulted in a long-term , continuous reduction of settlement fails in the union , where settlement efficiency in the union has not reached appropriate levels considering the situation in third-country capital markets that are comparable in terms of size , liquidity as well as instruments traded and types of transactions executed on such markets , or where the level of settlement fails in the union has or is likely to have a negative effect on the financial stability of the union. where the commission considers that any of those conditions is met and that the application of mandatory buy-ins is proportionate to address level of settlement fails in the union , the commission should be empowered to adopt an implementing act determining for which financial instruments or categories of transactions the mandatory buy-in rules should start to apply. the cash penalties referred to in the third subparagraph of article 7(2) of regulation (eu) no 909/2014 should be calculated on a daily basis for each business day that a transaction fails to be settled until the end of the buy-in process or the actual settlement day , whichever is the earlier. ### (6) the overarching objective of the settlement discipline regime is to improve settlement efficiency within the union. however , the market volatility in 2020 amplified concerns about the potential negative effects of mandatory buy-in rules , both in normal and stressed market conditions. the application of those rules should therefore be subject to an assessment by the commission as to its necessity , proportionality and appropriateness in the light of the evolution of settlement efficiency in the union. cash penalties and reporting requirements should however continue to apply in order to assess their impact on improving settlement efficiency in the union. considering the potential impacts of mandatory buy-in rules , such rules should apply only as a last resort measure when all other available measures fail to address insufficient level of settlement efficiency in the union , provided that the cost-benefit analysis by esma proves the tool to be appropriate and only where certain conditions are met , namely where the application of cash penalties has not resulted in a sustainable reduction of settlement fails in the union , where settlement efficiency in the union has not reached appropriate levels considering the situation in third-country capital markets that are comparable in terms of size , liquidity as well as instruments traded and types of transactions executed on such markets , or where the level of settlement fails in the union has or is likely to have a negative effect on the financial stability of the union. where the commission considers that any of those conditions is met and that the application of mandatory buy-ins is proportionate , necessary and adequate to address level of settlement fails in the union , the commission should be empowered to adopt an implementing act determining for which financial instruments or categories of transactions the mandatory buy-in rules should start to apply. the cash penalties referred to in the third subparagraph of article 7(2) of regulation (eu) no 909/2014 should be calculated on a daily basis for each business day that a transaction fails to be settled until the end of the buy-in process or the actual settlement day , whichever is the earlier.


### (6) the overarching objective of the settlement discipline regime is to improve settlement efficiency within the union. however , the market volatility in 2020 amplified concerns about the potential negative effects of mandatory buy-in rules , both in normal and stressed market conditions. the application of those rules should therefore be subject to an assessment by the commission as to its appropriateness in the light of the evolution of settlement efficiency in the union. cash penalties and reporting requirements should however continue to apply in order to assess their impact on improving settlement efficiency in the union. considering the potential impacts of mandatory buy-in rules , such rules should apply only where certain conditions are met , namely where the application of cash penalties has not resulted in a long-term , continuous reduction of settlement fails in the union , where settlement efficiency in the union has not reached appropriate levels considering the situation in third-country capital markets that are comparable in terms of size , liquidity as well as instruments traded and types of transactions executed on such markets , or where the level of settlement fails in the union has or is likely to have a negative effect on the financial stability of the union. where the commission considers that any of those conditions is met and that the application of mandatory buy-ins is proportionate to address level of settlement fails in the union , the commission should be empowered to adopt an implementing act determining for which financial instruments or categories of transactions the mandatory buy-in rules should start to apply. the cash penalties referred to in the third subparagraph of article 7(2) of regulation (eu) no 909/2014 should be calculated on a daily basis for each business day that a transaction fails to be settled until the end of the buy-in process or the actual settlement day , whichever is the earlier. ### (6) the overarching objective of the settlement discipline regime is to improve settlement efficiency within the union. however , the market volatility in 2020 amplified concerns about the potential negative effects of mandatory buy-in rules , both in normal and stressed market conditions. the existence of such rules is a disproportionate interference in the execution of securities transactions and the functioning of securities markets , poses significant risks for market liquidity and financial stability in the union , and could jeopardise the global competitiveness of the union. because of the implications that the deployment of mandatory buy-ins might have , the possibility of their application should be discarded. cash penalties and reporting requirements should however continue to apply in order to improve settlement efficiency in the union. esma , in close cooperation with the escb , should be given the possibility of developing draft regulatory technical standards to specify the target levels of settlement efficiency , taking into account factors such as the liquidity of financial instruments , the cross-border or domestic nature of transactions , and the currencies in which transactions are settled. the cash penalties referred to in the third subparagraph of article 7(2) of regulation (eu) no 909/2014 should be calculated on a daily basis for each business day that a transaction fails to be settled until the actual settlement day or until the transaction has been cancelled bilaterally. in order to support the provision of accurate , timely and complete information on penalties , all information necessary for the calculation of cash penalties should be centralised in the european single access point.


### (8) mandatory buy-ins and cash compensation processes allow for the payment of the difference between the buy-in price and the original trade price to be made from the seller to the purchaser only where that buy-in or cash compensation reference price is higher than the original trade price. this asymmetry for the payment of the differential could create an unequitable remedy that would unduly benefit the purchaser in the event that the buy-in or reference price is lower than the original trade price. the payment of the differential between the buy-in price and the original trade price should therefore apply in both directions to ensure that the trading parties are restored to the economic terms , had the original transaction taken place. ### deleted


### (10) where the mandatory buy-ins apply , it should be possible for the commission to temporarily suspend their application in certain exceptional situations. such a suspension should be possible for specific categories of financial instruments where necessary to avoid or address a serious threat to financial stability or to the orderly functioning of financial markets in the union. such a suspension should be proportionate to those aims. ### deleted


### (19) regulation (eu) no 909/2014 requires the cooperation of authorities that have an interest in the operations of csds that offer services in relation to financial instruments issued under the law of more than one member states. nonetheless , the supervisory arrangements remain fragmented and can lead to differences in the allocation and nature of supervisory powers depending on the csd concerned. this in turn creates barriers to the cross-border provision of csd services in the union , perpetuates the remaining inefficiencies in the union settlement market and has negative impacts on the stability of union financial markets. despite the possibility to set up colleges in accordance with article 24(4) of that regulation ( , that option has barely been used. in order to ensure an effective and efficient coordination of the supervision by competent authorities , the requirement to set up mandatory colleges should apply in two cases. firstly , for csds that offer notary and central maintenance services in relation to financial instruments issued under the law of more than one member states (the passporting colleges) and secondly for csds that belong to the same group (the “group-level colleges”). to reduce the administrative burden on the authorities participating to colleges , where a csd offering services cross-border is also part of a group of csds , the chair of the college should be able to decide that only one college is established for that csd. where the other csds in the group also offer services cross-border , the chair of the college should be able to make that decision only where the competent authorities of those other csds consent. in that case , there would be only one college for all csds within the group that would exercise the tasks assigned to passporting and group-level colleges. such colleges should ensure the sharing of information pertaining to the csds concerned. ### (19) regulation (eu) no 909/2014 requires the cooperation of authorities that have an interest in the operations of csds that offer services in relation to financial instruments issued under the law of more than one member states. nonetheless , the supervisory arrangements remain fragmented and can lead to differences in the allocation and nature of supervisory powers depending on the csd concerned. this in turn creates barriers to the cross-border provision of csd services in the union , perpetuates the remaining inefficiencies in the union settlement market and has negative impacts on the stability of union financial markets. despite the possibility to set up colleges in accordance with article 24(4) of that regulation , that option has barely been used. in order to ensure an effective and efficient coordination of the supervision by competent authorities , the requirement to set up mandatory colleges should be based on a single existing and reliable criterion , namely , the substantial importance of a csd for a jurisdiction other than the one where it is established. the threshold for the mandatory establishment by competent authorities of a college of supervisory authorities should be met where a csd is of substantial importance in at least two host member states. such colleges should ensure the sharing of information pertaining to the csds concerned. members of a college should have the possibility of requesting the adoption by the college of a binding opinion concerning issues identified during the review and evaluation process of csds , or during the review and evaluation of providers of banking-type ancillary services , or that relate to the extension or outsourcing of activities and services provided by the csd , or concerning any potential breach of the requirements of regulation (eu) no 909/2014 arising from the provision of services in a host member state. the process for the adoption of such an opinion should rely on a simple majority vote.


### (26) in order to avoid settlement risks due to the insolvency of the settlement agent , a csd should settle , whenever practical and available , the cash leg of the securities transaction through accounts opened with a central bank. where that option is not practical and available , including where a csd does not meet the conditions to access a central bank other than that of its home member state , that csd should be able to settle the cash leg of transactions in foreign currencies through accounts opened with institutions authorised to provide banking services under the conditions provided in regulation (eu) no 909/2014. the efficiency of the settlement market would be better served by enhancing the possibilities for csds to provide settlement in foreign currencies through the use of accounts opened with institutions authorised to provide banking services , within appropriate risk limits , with a view to deepen capital markets and enhance cross-border settlement. for that purpose , csds authorised to provide banking-type ancillary services in accordance with regulation (eu) no 909/2014 and for which the relevant risks are already monitored , should be able to offer such services to other csds that do not hold such license irrespective if the latter are part of the same group of companies. ### (26) in order to avoid settlement risks due to the insolvency of the settlement agent , a csd should settle , whenever practical and available , the cash leg of the securities transaction in central bank money through accounts opened with a central bank. where that option is not practical and available , including where a csd does not meet the conditions to access a payment system operated by a central bank other than that of its home member state , that csd should be able to settle the cash leg of transactions in third-country currencies in commercial bank money through accounts opened with institutions authorised to provide banking services under the conditions provided in regulation (eu) no 909/2014. csds authorised to provide banking-type ancillary services in accordance with regulation (eu) no 909/2014 , and for which the relevant risks are already monitored , should be able to offer services pertaining to the settlement of the cash leg of securities transactions , where that cash is a third-country currency to other csds that do not hold such license irrespective if the latter are part of the same group of companies


### (27) within an appropriately set risk limit , csds that are not authorised to provide banking-type ancillary services should be able to offer a sufficient amount of foreign currency settlement through accounts opened with credit institutions or through its own account. the threshold below which a csd may designate a credit institution to provide any banking-type ancillary services from within a separate legal entity without being required to comply with the conditions set out in title iv of regulation (eu) no 909/2014 should be calibrated in a way that promotes efficiency of settlement and the use of banking ancillary services while ensuring financial stability. as a body with specialised expertise regarding banking and credit risk matters , eba should be entrusted with the development of draft regulatory technical standards to set the appropriate thresholds and , where necessary , any risk mitigating requirements. eba should also closely cooperate with the members of the escb and with esma. the commission should be empowered to adopt regulatory technical standards in accordance with article 290 of the treaty on the functioning of the european union (tfeu) with regard to the detailed elements of the determining for the provisioning of banking type ancillary services , the accompanying details of the risk management and capital requirements for csds and the prudential requirements on credit and liquidity risks for csds and designated credit institutions that are authorised to provide banking-type ancillary services. ### (27) within appropriately set risk limits , csds that are not authorised to provide banking-type ancillary services should be able to arrange payments in third-country currency through accounts opened with credit institutions and through accounts opened with csds authorised to provide banking-type ancillary services. the thresholds below which a csd should be able to designate either a credit institution as a separate legal entity or a csd authorised to provide banking-type ancillary services without being required to comply with the conditions set out in title iv of regulation (eu) no 909/2014 should consist of a maximum amount for those arranged payments. that threshold should be calibrated in a way that promotes efficiency of settlement and the use of banking ancillary services while ensuring financial stability. it is possible that different thresholds are set with regard to different third-country currencies especially for the most liquid ones like g4 , while setting appropriate limit that would be applicable to the institution as whole. as a body with specialised expertise regarding banking and credit risk matters , eba should be entrusted with the development of draft regulatory technical standards to set the appropriate thresholds and , where necessary , any risk mitigating requirements. eba should also closely cooperate with the members of the escb and with esma. the commission should be empowered to adopt regulatory technical standards in accordance with article 290 of the treaty on the functioning of the european union (tfeu) with regard to the detailed elements of the determining for the provisioning of banking type ancillary services , the accompanying details of the risk management and capital requirements for csds and the prudential requirements on credit and liquidity risks for csds and designated credit institutions that are authorised to provided banking-type ancillary services.


### (27) within an appropriately set risk limit , csds that are not authorised to provide banking-type ancillary services should be able to offer a sufficient amount of foreign currency settlement through accounts opened with credit institutions or through its own account. the threshold below which a csd may designate a credit institution to provide any banking-type ancillary services from within a separate legal entity without being required to comply with the conditions set out in title iv of regulation (eu) no 909/2014 should be calibrated in a way that promotes efficiency of settlement and the use of banking ancillary services while ensuring financial stability. as a body with specialised expertise regarding banking and credit risk matters , eba should be entrusted with the development of draft regulatory technical standards to set the appropriate thresholds and , where necessary , any risk mitigating requirements. eba should also closely cooperate with the members of the escb and with esma. the commission should be empowered to adopt regulatory technical standards in accordance with article 290 of the treaty on the functioning of the european union (tfeu) with regard to the detailed elements of the determining for the provisioning of banking type ancillary services , the accompanying details of the risk management and capital requirements for csds and the prudential requirements on credit and liquidity risks for csds and designated credit institutions that are authorised to provide banking-type ancillary services. ### (27) within appropriately set risk limits , csds that are not authorised to provide banking-type ancillary services should be able to arrange payments in third-country currency through accounts opened with credit institutions and through accounts opened with csds authorised to provide banking-type ancillary services. the thresholds below which a csd should be able to designate either a credit institution as a separate legal entity or a csd authorised to provide banking-type ancillary services without being required to comply with the conditions set out in title iv of regulation (eu) no 909/2014 should consist of a maximum amount for those arranged payments. that threshold should be calibrated in a way that promotes efficiency of settlement and the use of banking ancillary services while ensuring financial stability. as a body with specialised expertise regarding banking and credit risk matters , eba should be entrusted with the development of draft regulatory technical standards to set the appropriate thresholds and , where necessary , any risk mitigating requirements. eba should also closely cooperate with the members of the escb and with esma. the commission should be empowered to adopt regulatory technical standards in accordance with article 290 of the treaty on the functioning of the european union (tfeu) with regard to the detailed elements of the determining for the provisioning of banking type ancillary services , the accompanying details of the risk management and capital requirements for csds and the prudential requirements on credit and liquidity risks for csds and designated credit institutions that are authorised to provide banking-type ancillary services.


### (30) in order to provide csds established in the union or in third countries with sufficient time to apply for authorisation and recognition of their activities , the date of application of the authorisation and recognition requirements of regulation (eu) no 909/2014 was initially deferred until an authorisation or recognition decision was made pursuant to that regulation. sufficient time has elapsed since the entry into force of that regulation. , therefore , those requirements should now start to apply to ensure , on the one hand , a level-playing field amongst all csds offering services in relation to financial instruments constituted under the law of a member state , and , on the other hand , that authorities at national and union level have the necessary information to ensure investor protection and monitor financial stability. ### (30) in order to provide csds established in the union or in third countries with sufficient time to apply for authorisation and recognition of their activities , the date of application of the authorisation and recognition requirements of regulation (eu) no 909/2014 was initially deferred until an authorisation or recognition decision was made pursuant to that regulation. sufficient time has elapsed since the entry into force of that regulation. , therefore , those requirements should now start to apply to ensure , on the one hand , a level-playing field amongst all csds offering services in relation to financial instruments constituted under the law of a member state , and , on the other hand , that authorities at national and union level have the necessary information to ensure investor protection and monitor financial stability. the third-country csds providing core services referred to in section a , points (1)and (2) , of the annex of regulation (eu) no 909/2014 should be subject to the procedure as set out in that regulation. however , the third-country csds already providing core services in section a , points (1) and (2) , of the annex of regulation (eu) no 909/2014 should benefit from a simplified notification procedure as set out in this regulation.


### (34) to ensure uniform conditions for the implementation of this regulation , and in particular with regard to the application and the suspension of mandatory buy-in requirements where those apply , implementing powers should be conferred on the commission. those powers should be exercised in accordance with regulation (eu) no 182/2011 of the european parliament and of the council43 . ### (34) to ensure uniform conditions for the implementation of this regulation , implementing powers should be conferred on the commission. those powers should be exercised in accordance with regulation (eu) no 182/2011 of the european parliament and of the council43


### the penalty mechanism referred to in the first subparagraph shall include cash penalties for participants that cause settlement fails (‘failing participants’) except where those settlement fails are caused by factors not attributable to the participants to the transaction or for operations that do not involve two trading parties. cash penalties shall be calculated on a daily basis for each business day that a transaction fails to be settled after its intended settlement date until the end of the buy-in process referred to in paragraphs 3 to 8 that is to be applied pursuant to paragraph 2a , or the actual settlement day , whichever is the earlier. the cash penalties shall not be configured as a revenue source for the csd.; ### the penalty mechanism referred to in the first subparagraph shall include cash penalties for participants that cause settlement fails (‘failing participants’)except where those settlement fails are caused by factors not attributable to the participants to the transaction or for operations that do not involve two trading parties. cash penalties shall be calculated on a daily basis for each business day that a transaction fails to be settled after its intended settlement date until the actual settlement day or until the transaction has been cancelled bilaterally. the cash penalties shall not be configured as a revenue source for the csd.;


### without prejudice to the penalty mechanism referred to in paragraph 2 of this article and the right to bilaterally cancel the transaction , the commission may , by means of an implementing act , decide to which of the financial instruments referred to in article 5(1) or categories of transactions in those financial instruments the settlement discipline measures referred to in paragraphs 3 to 8 of this article are to be applied where the commission considers that those measures constitute a proportionate means to address the level of settlement fails in the union and that , based on the number and volume of settlement fails , any of the following conditions is met: ### the commission may , upon consultation with esrb and esma , by means of an implementing act , decide to which of the financial instruments referred to in article 5(1) or categories of transactions in those financial instruments the settlement discipline measures referred to in paragraphs 3 to 8 of this article are to be applied where the commission considers that those measures constitute a necessary , appropriate and proportionate means to address the level of settlement fails in the union.


### where the commission has adopted an implementing act pursuant to paragraph 2a and where a failing participant has not delivered financial instruments covered by that implementing act to the receiving participant within a period after the intended settlement date (‘extension period’) equal to 4 business days , a buy-in process shall be initiated whereby those instruments shall be available for settlement and delivered to the receiving participant within an appropriate timeframe. ### where the commission has adopted an implementing act pursuant to paragraph 2a and where a failing participant has not delivered financial instruments covered by that implementing act to the receiving participant within a period after the intended settlement date (‘extension period’) equal to 4 business days , a buy-in process shall be initiated.


### where the transaction relates to a financial instrument traded on an sme growth market , the extension period shall be 15 calendar days unless the sme growth market decides to apply a shorter period. ### where the transaction relates to a financial instrument traded on an sme growth market , the extension period shall be 15 business days unless the sme growth market decides to apply a shorter period. those instruments shall be available for settlement and delivered to the receiving participant within an appropriate timeframe.


### within 1 month from the receipt of the information referred to in paragraph 3 , the competent authority of the home member state shall communicate that information to the competent authority of the host member state unless , by taking into account the provision of services envisaged , it has reasons to doubt the adequacy of the administrative structure or the financial situation of the csd wishing to provide its services in the host member state. where the csd already provides services to other host member states , the competent authority of the home member state shall also inform the passporting college referred to in article 24a. ### within 1 month from the receipt of the information referred to in paragraph 3 , the competent authority of the home member state shall communicate that information to the competent authority of the host member state unless , by taking into account the provision of services envisaged , it has reasons to doubt the adequacy of the administrative structure or the financial situation of the csd wishing to provide its services in the host member state.


### 5. where the competent authority of the home member state decides in accordance with paragraph 4 not to communicate all the information referred to in paragraph 3 to the competent authority of the host member state , it shall give reasons for its refusal to the csd concerned within 3 months of receiving all the information and inform the competent authority of the host member state and the passporting college referred to in article 24a of its decision. ### 5. where the competent authority of the home member state decides in accordance with paragraph 4 not to communicate all the information referred to in paragraph 3 to the competent authority of the host member state , it shall give reasons for its refusal to the csd concerned within 3 months of receiving all the information and inform the competent authority of the host member state of its decision.


### 7. in the event of a change of the information set out in the documents submitted in accordance with paragraph 3 of this article , a csd shall give written notice of that change to the competent authority of the home member state at least 1 month before implementing the change. the competent authority of the host member state and the passporting college referred to in article 24a shall also be informed of that change without delay by the competent authority of the home member state.; ### 7. in the event of a substantive change of the information communicated in accordance with paragraph 3 or paragraph 3a of this article , a csd shall give written notice of that change to the competent authority of the home member state at least 1 month before implementing the change. the competent authority of the host member state shall also be informed of that change without delay by the competent authority of the home member state.


### upon the request of any member of the passporting college referred to in article 24a , the competent authority of the home member state may invite staff from competent authorities of the host member states and esma to participate in on-site inspections. ### the competent authority of the home member state may invite staff from esma to participate in on-site inspections.


### where the competent authority of the host member state has clear and demonstrable grounds for believing that a csd providing services within its territory in accordance with article 23 is in breach of the obligations arising from the provisions of this regulation , it shall inform the competent authority of the home member state , esma and the passporting college referred to in article 24a of those findings. ### where the competent authority of the host member state has clear and demonstrable grounds for believing that a csd providing services within its territory in accordance with article 23 is in breach of the obligations arising from the provisions of this regulation , it shall inform the competent authority of the home member state and esma. esma may inform the college referred to in article 24a of those findings.


### where , despite measures taken by the competent authority of the home member state , the csd persists in acting in infringement of the obligations arising from the provisions of this regulation , the competent authority of the host member state shall , after informing the competent authority of the home member state , take all the appropriate measures needed in order to ensure compliance with the provisions of this regulation within the territory of the host member state. esma and the passporting college referred to in article 24a shall be informed of such measures without delay. ### where , despite measures taken by the competent authority of the home member state , the csd persists in acting in infringement of the obligations arising from the provisions of this regulation , the competent authority of the host member state shall , after informing the competent authority of the home member state , take all the appropriate measures needed in order to ensure compliance with the provisions of this regulation within the territory of the host member state. esma shall be informed of such measures without delay. esma may inform the college referred to in article 24a of those measures.


### where a csd is subject to the procedure referred to in article 23(3) to (7) (‘passporting college’); ### deleted


### in the case referred to in the first subparagraph , point (b) , where the parent undertaking is a csd authorised in the union , the competent authority of the home member state of that csd shall establish , manage and chair the group-level college. where the parent undertaking is not a csd authorised in the union , the competent authority of the home member state of the csd with the largest balance sheet total shall establish , manage and chair the group-level college. ### deleted


### in the case of a passporting college , the competent authority of the host member states; ### the competent authority of the host member states;


### in the case of a passporting college , the cooperation of the home and host member state pursuant to article 24 and regarding the measures referred to in article 23(4) , point (e) and on any issues encountered in the provision of services in other member states; ### the cooperation of the home and host member state pursuant to article 24 and regarding the measures referred to in article 23(4) , point (e) and on any issues encountered in the provision of services in other member states;


### 2. where it is not practical and available to settle in central bank accounts as provided in paragraph 1 , a csd may offer to settle the cash payments for all or part of its securities settlement systems through accounts opened with a credit institution , through a csd that is authorised to provide the services listed in section c of the annex whether within the same group of undertakings ultimately controlled by the same parent undertaking or not , or through its own accounts. if a csd offers to settle in accounts opened with a credit institution , through its own accounts or the accounts of another csd , it shall do so in accordance with the provisions of title iv.; ### 2. where it is not practical and available to settle in central bank accounts as provided in paragraph 1 , a csd may offer to settle the cash leg of transactions in third country currencies in commercial bank money through accounts opened with a credit institution , through a csd that is authorised to provide the services listed in section c of the annex whether within the same group of undertakings ultimately controlled by the same parent undertaking or not , or through its own accounts. if a csd offers to settle in accounts opened with a credit institution , through its own accounts or the accounts of another csd , it shall do so in accordance with the provisions of title iv.;


### (7) article 27(3) of directive 2014/65/eu contains the requirement for execution platforms to publish a list of details relating to best execution. factual evidence and feedback from stakeholders has shown that those reports are rarely read and do not enable investors or any users of those reports to make meaningful comparisons based on the information provided in those reports. as a consequence , directive (eu) 2021/338 of the european parliament and of the council21 suspended the reporting requirement for two years in order for that requirement to be reviewed. regulation (eu) xx/xxxx22 has amended regulation (eu) 600/2014 to remove the obstacles that have prevented the emergence of a consolidated tape. among the data that the consolidated tape is expected to provide are post-trade information regarding all transactions in financial instruments. that information can be used for proving best execution. the reporting requirement laid down in article 27(3) of directive 2014/65/eu will therefore no longer be relevant and should therefore be deleted. ### (7) article 27(3) and 27 (6) of directive 2014/65/eu contain the requirement for execution platforms to publish a list of details relating to best execution. factual evidence and feedback from stakeholders has shown that those reports are rarely read and do not enable investors or any users of those reports to make meaningful comparisons based on the information provided in those reports. as a consequence , directive (eu) 2021/338 of the european parliament and of the council21 suspended the reporting requirement under article 27 (3) for two years in order for that requirement to be reviewed. regulation (eu) xx/xxxx22 has amended regulation (eu) no 600/2014 to remove the obstacles that have prevented the emergence of a consolidated tape. among the data that the consolidated tape is expected to provide are post-trade information regarding all transactions in fixed income. that information can be used for proving best execution. the reporting requirement laid down in article 27(3) and 27 (6) of directive 2014/65/eu will therefore no longer be relevant and should therefore be deleted.


### (ii) are members of or participants in a regulated market or an mtf; ### (ii) are members of or participants in a regulated market or an mtf with the exception for non-financial entities who execute transactions on a trading venue for the purpose of commercial activity or treasury financing activity;


### paragraph 3 is deleted; ### paragraph 3 is replaced by the following:


### 16. believes that it is necessary to amend the scope of the directive on administrative cooperation5 (dac8) so that european legislators can further assess if other categories of income and assets such as crypto-assets are to be included; ### 16. believes that it is necessary to amend the scope of the directive on administrative cooperation5 (dac8) so that european legislators can further assess if other categories of income and assets such as crypto-assets are to be included; calls on the oecd to adopt without any further delay a new definition of a reporting standards and exchange of information which should then be included in the revised dac 8; thereafter encourages the commission to present the dac8 proposal without any delay;


### — having regard to articles 127(1) and (2) , 130 and 284(3) of the treaty on the functioning of the european union , ### — having regard to articles 123(1) , 125 , 127(1) and (2) , 130 , 282(2) and 284(3) of the treaty on the functioning of the european union ,


### 2. highlights that the statutory independence of the ecb , as laid down in the treaties , is a prerequisite for it to fulfil its mandate; ### 2. highlights that the statutory independence of the ecb , as laid down in the treaties , is a prerequisite for it to fulfil its mandate; stresses that this independence must remain untouched at all times; emphasises that this independence requires the ecb to refrain from taking political decisions;


### 3. welcomes the republic of croatia as the 20th member country of the euro area; ### 3. welcomes the republic of croatia as the 20th member country of the euro area; stresses that participation in the monetary union comes with the responsibilities enshrined in the stability and growth pact;


### 5. welcomes president lagarde’s statement that the current geopolitical crisis requires us to progress on eu fiscal integration; recalls that the economic and monetary union cannot function smoothly without a fiscal capacity at european level to respond to external shocks; ### deleted


### 5. welcomes president lagarde’s statement that the current geopolitical crisis requires us to progress on eu fiscal integration; recalls that the economic and monetary union cannot function smoothly without a fiscal capacity at european level to respond to external shocks; ### 5. notes president lagarde’s statement that the current geopolitical crisis requires us to progress on eu fiscal integration; recalls that the economic and monetary union requires solid fiscal policies in member states in order to be able to respond to external shocks;


### 6. echoes president lagarde’s call for a swift revision and simplification of the stability and growth pact; ### deleted


### 8. takes note of recent ecb monetary policy decisions to raise rates by 50 and 75 basis points in july and september 2022; is concerned about the implications of such policy decisions for growth and employment; ### 8. welcomes recent ecb monetary policy decisions to raise rates by 50 and 75 basis points in july and september 2022; notes that inflation is currently much higher than the ecb’s target rate of 2%; encourages the ecb to take all measures necessary to bring inflation back to its target level; regrets in this regard that monetary policy is still accommodative;


### 8. takes note of recent ecb monetary policy decisions to raise rates by 50 and 75 basis points in july and september 2022; is concerned about the implications of such policy decisions for growth and employment; ### 8. welcomes recent ecb monetary policy decisions to raise rates by 50 and 75 basis points in july and september 2022; stresses that further measures must be taken to respond to the rising inflation;


### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; ### 9. warns of a wage-price spiral when inflation expectations and therefore wages are increasing extensively;


### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; ### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; warns against the danger of a wage-price spiral if wages are to increase significantly;


### 11. welcomes the ecb’s decision not to engage in quantitative tightening; ### 11. regrets the ecb’s decision not to engage in quantitative tightening; stresses that quantitative easing amounts economically to monetary financing , which is prohibited by article 123(1) tfeu , if the ecb does not shrink back its balance sheet;


### 11. welcomes the ecb’s decision not to engage in quantitative tightening; ### 11. is alarmed by the ecb’s decision not to engage in quantitative tightening;


### 12. stresses that an even transmission of monetary policy is vital to the achievement of the ecb’s price stability mandate; notes the ecb’s decision on 15 june 2022 to apply flexibility in reinvesting redemptions that are due under the pandemic emergency purchase programme; welcomes the launch of the transmission protection instrument to support the effective transmission of monetary policy across the euro area; ### 12. stresses that an even transmission of monetary policy is vital to the achievement of the ecb’s price stability mandate; is alarmed by the ecb’s decision on 15 june 2022 to apply flexibility in reinvesting redemptions; insists that the ecb has to follow the market neutrality principle;


### 12. stresses that an even transmission of monetary policy is vital to the achievement of the ecb’s price stability mandate; notes the ecb’s decision on 15 june 2022 to apply flexibility in reinvesting redemptions that are due under the pandemic emergency purchase programme; welcomes the launch of the transmission protection instrument to support the effective transmission of monetary policy across the euro area; ### 12. stresses that an even transmission of monetary policy is vital to the achievement of the ecb’s price stability mandate; notes the ecb’s decision on 15 june 2022 to apply flexibility in reinvesting redemptions that are due under the pandemic emergency purchase programme;


### 14. recalls that the treaty on the functioning of the european union requires the ecb to support the general economic policies of the union; ### 14. recalls that the treaty on the functioning of the european union states that the ecb shall support the general economic policies of the union , without prejudice to its primary objective of maintaining price stability;


### 15. calls on the ecb to coordinate with the european parliament to specify the secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on its secondary objectives; ### deleted


### 15. calls on the ecb to coordinate with the european parliament to specify the secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on its secondary objectives; ### 15. recalls that according to article 127 tfeu , the secondary objectives are "without prejudice to the objective of price stability"; and reminds that price stability is far from being reached;


### 15. calls on the ecb to coordinate with the european parliament to specify the secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on its secondary objectives; ### 15. suggests taking advantage of this resolution to formulate the european parliament’s interpretation of the policy areas where the ecb is expected to provide medium-term support on the basis of its secondary objectives; invites the ecb to further exchange with the parliament to identify the extent to which these policy areas are relevant and how they could be integrated in the ecb’s monetary policies;


### 16. considers high levels of sustainable growth and investment to be key economic goals; calls on the ecb to consider how its monetary policy stance will impact those objectives; ### 16. considers high levels of sustainable growth and investment to be key economic goals; stresses that these objectives are best achieved when the free market operates in a stable macroeconomic environment based on predictable price levels;


### 17. underlines the pivotal role of small and medium-sized enterprises (smes) in the eu’s economy and economic and social convergence and employment; ### 17. underlines the pivotal role of small and medium-sized enterprises (smes) in the eu’s economy and economic and social convergence and employment; is especially concerned about the effect that the covid-19 pandemic and the russian war of aggression in ukraine have on smes;


### 18. reaffirms that achieving the union’s climate goals and ensuring a just transition are the top priorities of the eu’s general economic policies , which the ecb is expected to support; ### 18. reaffirms that achieving the union’s climate goals and ensuring a just transition are one of the top priorities of the eu’s general economic policies , which the ecb is expected to support through maintaining price stability and a stable macroeconomic environment that stimulates investment in clean technologies , as well as preventing distortions in the signalling function of prices that ensures an efficient allocation of resources;


### 19. considers that the ecb should contribute to reducing inequality; calls on the ecb to ensure that the costs of its monetary policy operations are not disproportionately borne by lower income strata; invites the ecb to assess the effects of its monetary policy decisions on employment; ### 19. calls on the ecb to refrain from taking politically motivated decisions and stick to its mandate of maintaining price stability; stresses that overstepping this mandate touches on the political independence of the central bank;


### 20. stresses that addressing the climate emergency and the euro area’s dependence on fossil fuels touches not only upon the ecb’s secondary mandate , but also its primary mandate , given the serious threat these issues pose to price stability; ### 20. stresses that the best way the ecb can contribute to mitigating climate change is to ensure price stability and a stable macroeconomic environment that encourages green investment; invites the ecb to assess to what extent climate change affects its ability to maintain price stability;


### 20. stresses that addressing the climate emergency and the euro area’s dependence on fossil fuels touches not only upon the ecb’s secondary mandate , but also its primary mandate , given the serious threat these issues pose to price stability; ### 20. stresses that addressing the climate emergency and the euro area’s dependence on fossil fuels touches not only upon the ecb’s secondary mandate , but also its primary mandate , given the serious threat these issues pose to price stability; warns that fossil fuel energy represents by far the largest source of inflation since q4 2021;


### 21. welcomes the governing council’s decision to take further steps to include climate change considerations in the eurosystem’s monetary policy framework; ### 21. notes the governing council’s decision to take further steps to include climate change considerations in the eurosystem’s monetary policy framework;


### 22. welcomes the ecb’s announcement to decarbonise its corporate bond holdings; calls for the ‘tilting’ of the ecb’s portfolio to be swift rather than gradual; ### 22. notes the ecb’s announcement to decarbonise its corporate bond holdings; stresses that the ecb’s asset purchasing programs constitute unconventional monetary policy which should be employed during unprecedented economic circumstances only; stresses furthermore that these holdings are a by-product of the past fight against low inflation and that making investments does not constitute an objective of monetary policy;


### 22. welcomes the ecb’s announcement to decarbonise its corporate bond holdings; calls for the ‘tilting’ of the ecb’s portfolio to be swift rather than gradual; ### 22. welcomes the ecb’s announcement to decarbonise its corporate bond holdings; calls therefore on the reduction of the bond holdings;


### 23. welcomes , furthermore , the announcement on the greening of the ecb’s collateral framework; regrets , however , that this will be limited to instruments issued by non-financial corporations , which represent only a small fraction of the instruments that banks pledge as collateral; ### 23. notes , furthermore , the announcement on the greening of the ecb’s collateral framework; insist that the ecb respects the market neutrality principle;


### 24. regrets that the climate roadmap does not include greening of the ecb’s targeted long-term refinancing operations; stresses that providing cheap liquidity to financial institutions investing in brown activities works against the fight against inflation and is not consistent with the objectives of the paris agreement; ### 24. notes that the climate roadmap does not include greening of the ecb’s targeted long-term refinancing operations; stresses that its independence requires refraining from taking political decisions such as diverging from the market neutrality principle; notes , furthermore , that the concept of market neutrality is related to the principle of an open market economy with free competition;


### 25. is concerned about the implications of higher interest rates for green investments; calls on the ecb to assess the possibility of applying differentiated rates to support green investments and disincentivise brown investments; ### deleted


### 25. is concerned about the implications of higher interest rates for green investments; calls on the ecb to assess the possibility of applying differentiated rates to support green investments and disincentivise brown investments; ### 25. is concerned about the implications of higher interest rates for green investments;


### 25. is concerned about the implications of higher interest rates for green investments; calls on the ecb to assess the possibility of applying differentiated rates to support green investments and disincentivise brown investments; ### 25. is concerned about the implications of higher interest rates for green investments; calls on the ecb to monitor the impact of its monetary policy on the cost of climate investments; and to assess the possibility of applying differentiated rates on taxonomy-aligned investments , notably in energy efficiency , which would help lower inflationary pressure and climate-related volatility on the medium and long term , and overall disincentivise brown investments;


### 26. welcomes the ecb climate risk stress test aimed at assessing the climate risk preparedness of the european banking sector; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously; ### 26. welcomes the ecb climate risk stress test aimed at assessing the climate risk preparedness of the european banking sector; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously in order to mitigate the financial risks resulting from climate change;


### 31. welcomes the ecb’s progress on the digital euro project , as well as the dialogue with parliament in this regard; looks forward to the governing council reaching a decision on launching the digital euro; ### 31. welcomes the ecb’s progress on the digital euro project , as well as the dialogue with parliament in this regard; looks forward to the governing council reaching a decision on launching the digital euro; insists that the digital euro must not replace cash as means of payment;


### 31. welcomes the ecb’s progress on the digital euro project , as well as the dialogue with parliament in this regard; looks forward to the governing council reaching a decision on launching the digital euro; ### 31. welcomes the ecb’s progress on the digital euro project , as well as the dialogue with parliament in this regard; looks forward to the governing council reaching a decision on launching the digital euro; highlights the expected benefits such as efficiency gains and increased financial inclusion;


### (3) certain characteristics of the eltif market , including the low number of funds , the small net asset size , the low number of jurisdictions in which eltifs are domiciled , and a portfolio composition that is skewed towards certain eligible investment categories , demonstrate the concentrated nature of that market , both geographically and in terms of investment type. it is therefore necessary to review the functioning of the eltif legal framework to ensure that more investments are channelled to businesses in need of capital and to long-term investment projects. ### (3) certain characteristics of the eltif market , including the low number of funds , the small net asset size , the low number of jurisdictions in which eltifs are domiciled , and a portfolio composition that is skewed towards certain eligible investment categories , demonstrate the concentrated nature of that market , both geographically and in terms of investment type. it is therefore necessary to review the functioning of the eltif legal framework to ensure that more investments are channelled to businesses in need of capital and to long-term investment projects. in addition , further action is needed to remove existing tax barriers and introduce tax incentives , in order to ensure an adequate level playing field across europe that would pave the way for a truly cross-border market for this type of funds.


### (10) it is necessary to extend the scope of eligible assets and promote the investments of eltifs in securitised assets. it should therefore be clarified that , where the underlying assets consist of long-term exposures , eligible investment assets should also include simple , transparent and standardised (sts) securitisations as referred to in article 18 of regulation (eu) 2017/2402 of the european parliament and of the council14 . those long-term exposures comprise securitisations of residential loans that are secured by one or more mortgages on residential immovable property (residential mortgage backed securities (rmbs)) , commercial loans that are secured by one or more mortgages on commercial immovable property , corporate loans , including loans which are granted to small and medium enterprises (smes) , and trade receivables or other underlying exposures that the originator considers to form a distinct asset type , provided that the proceeds from securitising those trade receivables or other underlying exposures are used for financing or refinancing long-term investments. ### (10) it is necessary to extend the scope of eligible assets and promote the investments of eltifs in securitised assets. it should therefore be clarified that , where the underlying assets consist of long-term exposures , eligible investment assets should also include securitisations as referred to in article 2(1) of regulation (eu) 2017/2402 of the european parliament and of the council14. those long-term exposures comprise securitisations of residential loans that are secured by one or more mortgages on residential immovable property (residential mortgage backed securities (rmbs)) , commercial loans that are secured by one or more mortgages on commercial immovable property , corporate loans , including loans which are granted to small and medium enterprises (smes) , and trade receivables or other underlying exposures that the originator considers to form a distinct asset type , provided that the proceeds from securitising those trade receivables or other underlying exposures are used for financing or refinancing long-term investments.


### (15) the diversification requirements laid down in the current version of regulation (eu) 2015/760 were introduced to ensure that eltifs can withstand adverse market circumstances. those diversification thresholds imply , however , that eltifs are , on average , required to make ten distinct investments. in relation to investment in projects or infrastructures of large scale , the requirement to make ten investments per eltif may be difficult to achieve , and costly in terms of transactional costs and capital allocation. to reduce transaction and administrative costs for eltifs and ultimately their investors , eltifs should therefore be able to pursue more concentrated investment strategies and thus to be exposed to fewer eligible assets. it is therefore necessary to adjust the diversification requirements for eltifs’ exposures to single qualifying portfolio undertakings , single real assets , collective investment undertakings and certain other eligible investment assets , contracts and financial instruments. that additional flexibility in the portfolio composition of eltifs and the reduction in the diversification requirements should not materially affect the capacity of eltifs to withstand market volatility , since eltifs typically invest in assets that often do not have a readily available market quotation , may be highly illiquid , and frequently have long-term maturity or time horizon. ### (15) the diversification requirements laid down in the current version of regulation (eu) 2015/760 were introduced to ensure that eltifs can withstand adverse market circumstances. those diversification thresholds imply , however , that eltifs are , on average , required to make ten distinct investments. in relation to investment in projects or infrastructures of large scale , the requirement to make ten investments per eltif may be difficult to achieve , and costly in terms of transactional costs and capital allocation. to reduce transaction and administrative costs for eltifs and ultimately their investors , eltifs should therefore be able to pursue more concentrated investment strategies and thus to be exposed to fewer eligible assets. it is therefore necessary to adjust the diversification requirements for eltifs’ exposures to single qualifying portfolio undertakings , single real assets , collective investment undertakings and certain other eligible investment assets , contracts and financial instruments. that additional flexibility in the portfolio composition of eltifs and the reduction in the diversification requirements should not materially affect the capacity of eltifs to withstand market volatility , since eltifs typically invest in assets that often do not have a readily available market quotation , may be highly illiquid , and frequently have long-term maturity or time horizon. those diversification thresholds should not be applicable , in any case , to funds that are marketed as fund-of-fund structures.


### (24) article 13(1) of regulation (eu) 2015/760 currently requires that eltifs invest at least 70 % of their capital in eligible investment assets. this high threshold for the composition of eligible investment assets in eltifs’ portfolios was initially established in view of the focus of eltifs on long-term investments and the contribution such investments would make to the financing of a sustainable growth of the union’s economy. given the illiquid and idiosyncratic nature of certain eligible investment assets within eltifs’ portfolios , however , it may prove difficult and costly for eltif managers to manage the liquidity of eltifs , honour redemption requests , enter into borrowing arrangements , and execute other elements of eltifs’ investment strategies pertaining to the transfer , valuation and pledging of such eligible investment assets. lowering the eligible investment assets threshold would enable eltif managers to better manage the liquidity of eltifs. ### (24) article 13(1) of regulation (eu) 2015/760 currently requires that eltifs invest at least 70 % of their capital in eligible investment assets. this high threshold for the composition of eligible investment assets in eltifs’ portfolios was initially established in view of the focus of eltifs on long-term investments and the contribution such investments would make to the financing of a sustainable growth of the union’s economy. given the illiquid and idiosyncratic nature of certain eligible investment assets within eltifs’ portfolios , however , it may prove difficult and costly for eltif managers to manage the liquidity of eltifs , honour redemption requests , enter into borrowing arrangements , and execute other elements of eltifs’ investment strategies pertaining to the transfer , valuation and pledging of such eligible investment assets. lowering the eligible investment assets threshold down to 50 % would enable eltif managers to better manage the liquidity of eltifs.


### (25) leverage is frequently used to enable the day-to-day operation of an eltif and to carry out a specific investment strategy. moderate amounts of leverage can amplify returns , and , where controlled adequately , without incurring or exacerbating excessive risks. in addition , leverage can frequently be used by a variety of collective investment undertakings to gain additional efficiencies or operational results. since the borrowing of cash threshold is currently limited to 30% of the capital of the eltif , eltif managers may be unable to successfully pursue certain investment strategies , including in the case of investments in real assets , where using higher levels of leverage is an industry norm or is otherwise required to achieve attractive risk-adjusted returns. it is therefore appropriate to increase the flexibility of managers of eltifs to raise further capital during the life of the eltif. in view of the possible risks that leverage can entail , eltifs marketed to retail investors should be permitted to borrow cash amounting to up to 50 % of the value of the capital of the eltif. the 50 % threshold is appropriate given the overall borrowing of cash limits common for funds investing in real assets with a similar liquidity and redemption profile. as for eltifs marketed to professional investors , however , a higher leverage threshold should be permitted , because professional investors have a higher risk-tolerance than retail investors. the borrowing of cash threshold for eltifs that are marketed to professional investors only should therefore be extended to 100 % of the eltif capital. ### (25) leverage is frequently used to enable the day-to-day operation of an eltif and to carry out a specific investment strategy. moderate amounts of leverage can amplify returns , and , where controlled adequately , without incurring or exacerbating excessive risks. in addition , leverage can frequently be used by a variety of collective investment undertakings to gain additional efficiencies or operational results. since the borrowing of cash threshold is currently limited to 30% of the capital of the eltif , eltif managers may be unable to successfully pursue certain investment strategies , including in the case of investments in real assets , where using higher levels of leverage is an industry norm or is otherwise required to achieve attractive risk-adjusted returns. it is therefore appropriate to increase the flexibility of managers of eltifs to raise further capital during the life of the eltif. in order to allow eltif managers to raise capital more efficiently (while keeping an eye on the potential risks that leverage could entail) , eltifs marketed to retail investors should be permitted to borrow cash amounting to up to 100 % of the net asset value (nav). as a consequence of this , the borrowing of cash threshold for eltifs that are marketed to professional investors should equally be extended to 100 % of the net asset value (nav).


### (27) eltifs should be able to encumber their assets to implement their borrowing strategy. to address concerns about shadow banking activities , however , cash borrowed by eltifs should not be used to grant loans to qualifying portfolio undertakings. however , to increase the flexibility of eltifs in executing their borrowing strategy , the borrowing arrangements should not count as borrowing where that borrowing is fully covered by investors’ capital commitments. ### (27) eltifs should be able to encumber their assets to implement their borrowing strategy. however , to increase the flexibility of eltifs in executing their borrowing strategy , the borrowing arrangements should not count as borrowing where that borrowing is fully covered by investors’ capital commitments.


### (29) article 18(4) of regulation (eu) 2015/760 currently requires that investors in an eltif may request the winding down of that eltif where their redemption requests , made in accordance with the eltif’s redemption policy , have not been satisfied within one year from the date on which those requests were made. given the long-term orientation of eltifs and the often idiosyncratic and illiquid asset profile of eltifs’ portfolios , the entitlement of any investor or a group of investors to request the winding down of an eltif can be disproportionate and detrimental to both the successful execution of the eltif investment strategy and the interests of other investors or groups of investors. it is therefore appropriate to delete the possibility for investors to require the winding down of an eltif where that eltif is unable to satisfy redemption requests. ### (29) article 18(4) of regulation (eu) 2015/760 currently requires that investors in an eltif may request the winding down of that eltif where their redemption requests , made in accordance with the eltif’s redemption policy , have not been satisfied within one year from the date on which those requests were made. given the long-term orientation of eltifs and the often idiosyncratic and illiquid asset profile of eltifs’ portfolios , the entitlement of any investor or a group of investors to request the winding down of an eltif can be disproportionate and detrimental to both the successful execution of the eltif investment strategy and the interests of other investors or groups of investors. it is therefore appropriate to delete the possibility for investors to require the winding down of an eltif where that eltif is unable to satisfy redemption requests. eltif managers should , in any case , be entitled to determine the redemption frequencies.


### 1. an eltif shall invest at least 60 % of its capital in eligible investment assets. ### 1. an eltif shall invest at least 50 % of its capital in eligible investment assets.


### 3. the aggregate value of units or shares of eltifs , euvecas , eusefs , ucits and of eu aifs managed by eu aifm in an eltif portfolio shall not exceed 40 % of the value of the capital of the eltif.; ### 3. the aggregate value of units or shares of eltifs , euvecas , eusefs , ucits and of eu aifs managed by eu aifm in an eltif portfolio shall not exceed 40 % of the net asset value (nav).


### 3a. the aggregate value of simple , transparent and standardised securitisations in an eltif portfolio shall not exceed 20% of the value of the capital of the eltif.; ### 3a. the aggregate value of securitisations in an eltif portfolio shall not exceed 30 % of the net asset value (nav).


### 4. the aggregate risk exposure to a counterparty of the eltif stemming from otc derivative transactions , repurchase agreements , or reverse repurchase agreements shall not exceed 10 % of the value of the capital of the eltif.; ### 4. the aggregate risk exposure to a counterparty of the eltif stemming from otc derivative transactions , repurchase agreements , or reverse repurchase agreements shall not exceed 10 % of the net asset value (nav).


### it represents no more than 50 % of the value of the capital of the eltif , and no more than 100 % of the value of the capital of the eltif for eltifs marketed solely to professional investors; ### it represents no more than 100 % of the value of the net asset value (nav);


### it serves the purpose of making investments or providing liquidity , including to pay costs and expenses , except for loans as referred to in article 10 , point (c) , provided that the holdings in cash or cash equivalents of the eltif are not sufficient to make the investment concerned; ### it serves the purpose of making investments or providing liquidity , including to pay costs and expenses provided that the holdings in cash or cash equivalents of the eltif are not sufficient to make the investment concerned;


### esma shall develop draft regulatory technical standards specifying the minimum information to be provided to competent authorities under article 18(2) , point (b) , and the criteria to assess the percentage referred to in article 18(2) , point (d) , taking into account the eltif’s expected cash flows and liabilities.; ### 7. esma shall develop draft regulatory technical standards specifying the minimum information to be provided to competent authorities under article 18(2) , point (b) , and the criteria to assess the percentage referred to in article 18(2) , point (d) , taking into account the eltif’s expected cash flows and liabilities. the draft regulatory technical standards must ensure that eltif managers are entitled to define the redemption frequency , which not be shorter than a month;


### 1. no later than [date of the entry into force + 5 years] , the commission shall start a review of the application of this regulation. the review shall analyse , in particular: ### 1. no later than [date of the entry into force + 5 years] , the commission shall submit to the european parliament and to the council a report on the application and enforcement of this regulation. that report shall at least analyse the following elements:


### (20) the effectiveness and fairness of the global minimum tax reform heavily relies on its worldwide implementation. it will thus be vital that all major trading partners of the union apply either a qualified iir or an equivalent set of rules on minimum taxation. in this context , and in support of legal certainty and efficiency of the global minimum tax rules , it is important to further delineate the conditions under which the rules implemented in a third country jurisdiction which will not transpose the rules of the global agreement can be granted equivalence to a qualified iir. to this end , this directive should provide for an assessment , by the commission , of the equivalence criteria based on certain parameters together with a listing of third country jurisdictions that meet the equivalence criteria. this list would be modified , through a delegated act , following any subsequent assessment of the legal framework implemented by a third country jurisdiction in its domestic law. ### (20) the effectiveness and fairness of the global minimum tax reform heavily relies on its swift and consistent implementation worldwide and by eu member states by the end of 2023. it will thus be vital that all major trading partners of the union apply either a qualified iir or an equivalent set of rules on minimum taxation. in this context , and in support of legal certainty and efficiency of the global minimum tax rules , it is important to further delineate the conditions under which the rules implemented in a third country jurisdiction which will not transpose the rules of the global agreement can be granted equivalence to a qualified iir. to this end , this directive should provide for an assessment , by the commission , of the equivalence criteria based on certain parameters together with a listing of third country jurisdictions that meet the equivalence criteria. this list would be modified , through a delegated act , following any subsequent assessment of the legal framework implemented by a third country jurisdiction in its domestic law. the implementation of the pillar ii directive will require an increased exchange of information between member states and third country jurisdictions. to this end , the directive on administrative cooperation(dac) should be reviewed in accordance with the future oecd work on a competent authority agreement to be developed by the end of 2022.


### (20) the effectiveness and fairness of the global minimum tax reform heavily relies on its worldwide implementation. it will thus be vital that all major trading partners of the union apply either a qualified iir or an equivalent set of rules on minimum taxation. in this context , and in support of legal certainty and efficiency of the global minimum tax rules , it is important to further delineate the conditions under which the rules implemented in a third country jurisdiction which will not transpose the rules of the global agreement can be granted equivalence to a qualified iir. to this end , this directive should provide for an assessment , by the commission , of the equivalence criteria based on certain parameters together with a listing of third country jurisdictions that meet the equivalence criteria. this list would be modified , through a delegated act , following any subsequent assessment of the legal framework implemented by a third country jurisdiction in its domestic law. ### (20) the effectiveness and fairness of the global minimum tax reform heavily relies on its swift and consistent implementation worldwide and by eu member states by 2023. it will thus be vital that all major trading partners of the union apply either a qualified iir or an equivalent set of rules on minimum taxation. in this context , and in support of legal certainty and efficiency of the global minimum tax rules , it is important to further delineate the conditions under which the rules implemented in a third country jurisdiction which will not transpose the rules of the global agreement can be granted equivalence to a qualified iir. to this end , this directive should provide for an assessment , by the commission , of the equivalence criteria based on certain parameters together with a listing of third country jurisdictions that meet the equivalence criteria. this list would be modified , through a delegated act , following any subsequent assessment of the legal framework implemented by a third country jurisdiction in its domestic law. the implementation of the pillar ii directive will require an increased exchange of information between member states and third country jurisdictions. to this end , the directive on administrative cooperation(dac) should be reviewed in accordance with the future oecd work on a competent authority agreement to be developed by the end of 2022.


### 2. a constituent entity that does not comply with the requirement to file a top-up tax information return pursuant to article 42 for a tax year within the prescribed deadline or makes a false declaration shall be charged an administrative pecuniary penalty amounting to 5 % of its turnover in the relevant fiscal year. this penalty shall only apply after the constituent entity has not provided the top-up tax information return pursuant to article 42 , following any reminder issued , within a period of 6 months. ### deleted


### member states shall bring into force the laws , regulations and administrative provisions necessary to comply with this directive by 31 december 2022. ### member states shall bring into force the laws , regulations and administrative provisions necessary to comply with this directive by 31 december 2023.


### they shall apply those provisions from 1 january 2023. ### they shall apply those provisions from 1 january 2024.


### however , they shall apply the provisions necessary to comply with articles 11 , 12 and 13 from 1 january 2024. ### however , they shall apply the provisions necessary to comply with articles 11 , 12 and 13 from 1 january 2025.


### a stand-alone institution in the eu and , for the purposes of complying with the obligations of this regulation on the basis of its consolidated situation in accordance with part one , title ii , chapter 2 , an eu parent institution , an eu parent financial holding company and an eu parent mixed financial holding company shall calculate the total risk exposure amount as follows: ### institutions shall calculate the total risk exposure amount as follows:


### for the purposes set out in points (i) and (ii) , the total risk exposure amount shall be calculated in accordance with paragraph 6: ### deleted


### for the purposes of complying with the obligations of this regulation on an individual basis , the total risk exposure amount of an institution which is neither a stand-alone institution in the eu nor a stand-alone subsidiary institution in a member state shall be the un-floored total risk exposure amount calculated in accordance with paragraph 4. ### deleted


### for the purposes of complying with the obligations of this regulation on an individual basis , the total risk exposure amount of an institution which is neither a stand-alone institution in the eu nor a stand-alone subsidiary institution in a member state shall be the un-floored total risk exposure amount calculated in accordance with paragraph 4. ### for the purposes of complying with the obligations of this regulation in any case other than the cases referred to in point (a) of this paragraph , the total risk exposure amount shall be the un-floored total risk exposure amount calculated in accordance with paragraph 4.


### 6. the total risk exposure amount of an entity ‘i’ for the purposes set out in paragraph 3 , point (b) , shall be calculated as follows: ### deleted


### there is no mortgage lien on the residential property when the loan is granted and the borrower is contractually committed not to grant any mortgage lien without the consent of the institution that originally granted the loan; ### there is no mortgage lien on the residential property when the loan is granted and for the loans granted from 1 january 2024 the borrower is contractually committed not to grant any mortgage lien without the consent of the institution that originally granted the loan;


### the guarantor is an institution or a financial sector entity subject to capital requirements at least equivalent to those applicable to institutions or insurance undertakings; ### the guarantor is an institution or a financial sector entity subject to capital requirements comparable to those applicable to institutions or insurance undertakings;


### the guarantor has established a fully-funded mutual guarantee fund or equivalent protection for insurance undertakings to absorb credit risk losses , the calibration of which is periodically reviewed by its competent authority and is subject to yearly stress testing; ### the guarantor has established a fully-funded mutual guarantee fund or equivalent protection for insurance undertakings to absorb credit risk losses , the calibration of which is periodically reviewed by its competent authority and is subject to periodic stress testing , at least every two years;


### 4. for contractual arrangements offered by an institution , but not yet accepted by the client , that would become commitments if accepted by the client , and contractual arrangements that would qualify as commitments but meet the conditions for not being treated as commitments , the percentage applicable to that type of contractual arrangement shall be that provided for in accordance with paragraph 2. ### deleted


### 4. for contractual arrangements offered by an institution , but not yet accepted by the client , that would become commitments if accepted by the client , and contractual arrangements that would qualify as commitments but meet the conditions for not being treated as commitments , the percentage applicable to that type of contractual arrangement shall be that provided for in accordance with paragraph 2. ### 4. deletion


### 2. exposures with an original maturity of three months or less for which a credit assessment by a nominated ecai is available and exposures which arise from the movement of goods across national borders with an original maturity of six months or less and for which a credit assessment by a nominated ecai is available , shall be assigned a risk weight in accordance with table 4 which corresponds to the credit assessment of the ecai in accordance with article 136. ### 2. exposures with a residual maturity of three months or less for which a credit assessment by a nominated ecai is available and exposures which arise from the movement of goods across national borders with a residual maturity of six months or less and for which a credit assessment by a nominated ecai is available , shall be assigned a risk weight in accordance with table 4 which corresponds to the credit assessment of the ecai in accordance with article 136.


### the exposure is not secured by immovable property or otherwise related to the financing of real estate ; ### the exposure is related to the financing of real estate and is within the definitions of object finance , project finance or commodities finance exposures laid down in paragraph 3;


### where the purpose of a specialised lending exposure is to finance the acquisition of physical assets , including ships , aircraft , satellites , railcars , and fleets , and the income to be generated by those assets comes in the form of cash flows generated by the specific physical assets that have been financed and pledged or assigned to the lender by one or several third parties (‘object finance exposures’) , institutions shall apply the following risk weights: ### where the purpose of a specialised lending exposure is to finance the acquisition of physical assets , including ships , aircraft , satellites , railcars , and fleets , and the income to be generated by those assets comes in the form of cash flows generated by the specific physical assets that have been financed and pledged or assigned to the lender (‘object finance exposures’) , institutions shall apply a risk weight of 100%.


### 80 % where the exposure is deemed to be high quality when taking into account all of the following criteria: ### deleted


### (ii) 100 % where the exposure is not deemed to be high quality as referred to in point (i); ### deleted


### where the purpose of a specialised lending exposure is to provide for short-term financing of reserves , inventories or receivables of exchange-traded commodities , including crude oil , metals , or crops , and the income to be generated by those reserves , inventories or receivables is to be the proceeds from the sale of the commodity (‘commodities finance exposures’) , institutions shall apply a risk weight of 100 %; ### where the purpose of a specialised lending exposure is to provide for short-term financing of inventories or receivables of liquidly traded commodities , including crude oil , metals , or soft commodities , and the income to be generated by those inventories or receivables is to be the proceeds from the sale of the commodity (‘commodities finance exposures’) , institutions shall apply a risk weight of 100 %;


### where the purpose of a specialised lending exposure is to finance a project for the development or acquisition of large , complex and expensive installations , including power plants , chemical processing plants , mines , transportation infrastructure , environment , and telecommunications infrastructure , and the income to be generated by the project is the money generated by the contracts for the output of the installation obtained from one or several parties which are not under management control of the sponsor (‘project finance exposures’) , institutions shall apply the following risk weights: ### where the purpose of a specialised lending exposure is to finance a single project , either in the form of construction of a new capital installation or refinancing of an existing installation , with or without improvements , in particular projects for the development or acquisition of large , complex and expensive installations , including power plants , chemical processing plants , mines , transportation infrastructure , environment , and telecommunications infrastructure , and the income to be generated by the financed project serves both as the primary source of repayment and as security for the loan (‘project finance exposures’) , institutions shall apply the following risk weights: