### 1. by [eight years after the entry into force] member states shall communicate to the commission all information on how this directive has been applied and what has been its impact in practice. ### 1. by [three years after the entry into force] member states shall communicate to the commission all information on how this directive has been applied and what has been its impact in practice.


### 5. flaring shall only be allowed where either re-injection , utilisation on-site or dispatch of the methane to a market are not feasible for reasons other than economic considerations. in such a situation , as part of the reporting obligations set out in article 16 , operators shall demonstrate to the competent authorities the necessity to opt for flaring instead of either re-injection , utilisation on-site or dispatch of the methane to a market. ### 5. in addition to the conditions set out in paragraph 2 and 3 , flaring shall only be allowed where either re-injection , utilisation on-site or dispatch of the methane to a market are not feasible for reasons other than economic considerations. in such a situation , as part of the reporting obligations set out in article 16 , operators shall demonstrate to the competent authorities the necessity to opt for flaring instead of either re-injection , utilisation on-site or dispatch of the methane to a market.


### 3. operators shall conduct weekly inspections of flare stacks in accordance with the elements set out in annex iii. ### 3. operators shall conduct continuous monitoring and at least weekly inspections of flare stacks in accordance with the elements set out in annex iii.


### by … [36 months from the date of entry into force of this regulation] and by 30 march every year thereafter , operators shall submit a report to the competent authorities containing direct measurements of source-level methane emissions for operated assets referred to in paragraph 2 , complemented by measurements of site-level methane emissions , thereby allowing assessment and verification of the source-level estimates aggregated by site. ### by … [24 months from the date of entry into force of this regulation] and by 30 march every year thereafter , operators shall submit a report to the competent authorities containing updated direct measurements of source-level methane emissions for operated and non-operated assets referred to in paragraph 2 , complemented by measurements of site-level methane emissions of every site within their operation , thereby allowing assessment and verification of the source-level estimates aggregated by site.


### 4. by … [36 months from the date of entry into force of this regulation] , undertakings established in the union shall submit a report to the competent authorities containing direct measurements of source-level methane emissions for non-operated assets. reporting at such level may involve the use of source-level measurement and sampling as the basis for establishing specific emission factors used for emissions estimation. ### deleted


### 5. by … [48 months from the date of entry into force of this regulation] and by 30 march every year thereafter , undertakings established in the union shall submit a report to the competent authorities containing direct measurements of source-level methane emissions for non-operated assets as set out in paragraph 4 , complemented by measurements of site-level methane emissions , thereby allowing assessment and verification of the source-level estimates aggregated by site. ### deleted


### by … [48 months from the date of entry into force of this regulation] and by 30 march every year thereafter , undertakings established in the union shall submit a report to the competent authorities containing direct measurements of source-level methane emissions for non-operated assets as set out in paragraph 4 , complemented by measurements of site-level methane emissions , thereby allowing assessment and verification of the source-level estimates aggregated by site. ### deleted


### before submission to the competent authorities , undertakings shall ensure that the reports set out in this paragraph are assessed by a verifier and include a verification statement issued in accordance with articles 8 and 9. ### deleted


### all methane emissions for operated assets; ### all methane emissions for operated and non-operated assets;


### share of ownership and methane emissions from non-operated assets multiplied by the share of ownership; ### deleted


### a list of the entities with operational control of the non-operated assets. ### deleted


### operators shall take all measures available to them to prevent and minimise methane emissions in their operations. ### operators shall take all measures available to them to prevent and minimise methane emissions in their operations in order to reach , for oil and gas assets , a performance standard of 0.2% methane emissions intensity (ofoverall quantities of oil and gas imported into or extracted within the eu)within three years of the date of entry into force of this regulation and in full respect of the european climate law.


### operators shall take all measures available to them to prevent and minimise methane emissions in their operations. ### operators shall take all measures available to them to prevent and minimise methane emissions in their operations. measures shall not be taken where this would result in a net increase in direct and indirect greenhouse gas emissions as a result of implementing such measures.


### by … [3 months from the date of entry into force of this regulation] , operators shall submit a leak detection and repair programme to the competent authorities which shall detail the contents of the surveys to be carried out in accordance with the requirements in this article. ### by … [3 months from the date of entry into force of this regulation] , operators shall submit a leak detection and repair programme to the competent authorities which shall detail the contents of the surveys to be carried out in accordance with the requirements in this article to ensure environmental , economic and security benefits including for critical infrastructure.


### thereafter , leak detection and repair surveys shall be repeated every three months. ### thereafter , leak detection and repair surveys shall be repeated every month. depending on the leakage susceptibility of the material the pipelines are made of , leak detection and repair surveys may be repeated every three months for lower risk infrastructure , as specified by the commission.


### thereafter , leak detection and repair surveys shall be repeated every three months. ### thereafter , leak detection and repair surveys shall be repeated every three months or less for surveys complemented by more frequently deployed advanced equipment and monitoring methods that allow detection ensuring no amount of significant methane emissions goes undetected and continue unabated.


### 1. highlights that taxation is one of the few areas that remain subject to unanimity voting in council; stresses that it has become increasingly evident over recent years that stronger coordination in the field of taxation is needed at eu and global levels in the light of economic developments and the new challenges created by digitalisation and globalisation; regrets , in this regard , hungary’s misuse of its veto right to block the council negotiations on the commission proposal of 22 december 2021 for a council directive on ensuring a global minimum level of taxation for multinational groups in the union (com(2021)0823); ### 1. highlights that taxation is one of the few areas that remain subject to unanimity voting in council; stresses that it has become increasingly evident over recent years that stronger coordination in the field of taxation is needed at eu and global levels in the light of economic developments and the new challenges created by digitalisation and globalisation; recalls that recent tax proposals were blocked in council due to vetoes of single member states for reasons which were unrelated to the content of the proposal; deplores the recourse to national vetoes as a bargaining tool;


### 1. regrets that passerelle clauses have never been used in the field of the cfsp , even though the russian war against ukraine has clearly called for more efficient and swift decision-making; ### 1. deplores the fact that passerelle clauses have never been used in the field of the cfsp due to member states’ lack of political will and contrary to the parliament’s clear position on the matter; takes the view that emerging global challenges and the union’s immediate geopolitical environment , notably the russian war of aggression against ukraine , clearly necessitate the eu to adopt swifter and more efficient decision-making processes;


### 2. regrets the fact that the current situation often leads to delays and a lack of progress in the harmonisation and coordination of tax rules across the union , even though such harmonisation and coordination would benefit everyone; notes that some legislative proposals , such as the debt-equity bias reduction allowance (debra) or the business in europe: framework for income taxation (befit) , will be key to supporting the competitiveness of european companies; ### 2. regrets the fact that the current situation often leads to delays and a lack of progress in the harmonisation and coordination of tax rules across the union , even though such harmonisation and coordination would benefit everyone; notes that some legislative proposals , such as the business in europe: framework for income taxation (befit) or the rules to prevent the misuse of shell entities for tax purposes (unshell) , will be key to supporting the competitiveness of european companies; deplores the fact that proposals such as the common consolidated corporate tax base (ccctb) and the revision of the interest and royalties directive have remained blocked in the council;


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


### 2. urges the council presidency to follow up on the czech initiative in an effective way by putting the use of the passerelle clauses in the field of the cfsp on the agenda; ### 2. urges the swedish council presidency to follow up on the initiative of the czech council presidency in an effective way , starting with the addition of the use of passerelle clauses in the field of cfsp and relevant commission external action to the agenda of the first council meeting following the adoption of the present report;


### 3. urges the member states to switch to qmv for decisions in all areas of the cfsp , starting within a year with priority areas such as the eu global human rights sanctions regime , restrictive measures and other instruments linked to the russian war against ukraine and interim steps in the enlargement process; stresses that unanimity decisions should remain required for the creation and deployment of military missions or operations under the common security and defence policy (csdp); ### 3. urges the member states to switch to qmv for decisions in all areas of the cfsp and relevant commission areas of external action , starting within a year by activating the passerelle clauses for priority areas; insists that these priority areas include all decision-making regarding the union’s sanctions regimes , notably the eu global human rights sanctions regime , as well as any measures related to the russian war of aggression against ukraine , including restrictive measures , defence assistance , and financial and economic support , and interim steps in the eu accession process; urges member states to give consideration to switching to qmv for relevant council decisions pertaining to the common security and defence policy (csdp) with the exception of the mutual defence clause in article 42(7) teu; encourages the consideration of the use of qmv in situations where passerelle clauses do not apply and for the creation and deployment of military missions under the csdp that do not involve an executive mandate;


### 4. recommends using the two general passerelle clauses for selected treaty articles concerning the eu’s competences in the area of taxation; recalls that the commission communication of 15 january 2019 entitled ‘towards a more efficient and democratic decision making in eu tax policy’ (com(2019)0008) and the conclusions of the conference on the future of europe both recommended moving from unanimity voting to qmv on tax matters. ### 4. recommends using the two general passerelle clauses for selected treaty articles concerning the eu’s competences in the area of taxation; recalls that the commission communication of 15 january 2019 entitled ‘towards a more efficient and democratic decision making in eu tax policy’ (com(2019)0008) and the conclusions of the conference on the future of europe both recommended moving from unanimity voting to qmv on tax matters; highlights that using qmv on tax matters would contribute to a more effective framework for tackling tax evasion , avoidance and fraud concerns , but also open the path to a more efficient tax collection , benefitting both sovereigns and companies.


### 4. recommends using the two general passerelle clauses for selected treaty articles concerning the eu’s competences in the area of taxation; recalls that the commission communication of 15 january 2019 entitled ‘towards a more efficient and democratic decision making in eu tax policy’ (com(2019)0008) and the conclusions of the conference on the future of europe both recommended moving from unanimity voting to qmv on tax matters. ### 4. recommends using the two general passerelle clauses for selected treaty articles concerning the eu’s competences in the area of taxation; recalls that the commission communication of 15 january 2019 entitled ‘towards a more efficient and democratic decision making in eu tax policy’ (com(2019)0008) and the conclusions of the conference on the future of europe both recommended moving from unanimity voting to qmv on tax matters; recalls that the ep resolution of 4 july 2022 entitled national vetoes to undermine the global tax deal (2022/2734(rsp)) recommended to member states to consider the added value of transitioning to qualified majority voting.


### 4. reiterates the need for strong parliamentary oversight of the cfsp and csdp to ensure accountability and democratic legitimacy; calls on the council , commission and european external action service to proactively engage with parliament and keep it informed; commits itself to improving the efficiency of its oversight mechanisms , so as to potentially speed up decision-making within the council. ### 4. reiterates the need for strong parliamentary oversight of the cfsp , csdp , and commission external action to ensure accountability and democratic legitimacy; calls on the council , commission and european external action service to proactively engage with parliament and keep it informed; commits itself to improving the efficiency of its oversight mechanisms , in particular where doing so could contribute to speeding up decision-making within the council.


### a. whereas the potential for fast , efficient and effective foreign policy , security and defence action , as set out in the lisbon treaty , has only been used in a very limited way over the past decade due to a lack of political will from the member states; ### a. whereas the potential for fast , efficient and effective foreign policy , security and defence action , as set out in particular in article 48(7) and article 31(3) teu , has yet to be operationalised due to a lack of political will from the member states;


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


### (2) member states’ tax systems allow the taxpayers to deduct interest payments on debt financing , and thereby reduce the corporate income tax liability , while costs related to equity financing are non-tax deductible in most member states. the asymmetric tax treatment of debt and equity financing across the union induces a bias towards debt in investment decisions. moreover , where member states provide for a tax allowance on equity financing in their domestic law , such national measures differ significantly in terms of policy design. ### (2) member states’ tax systems allow the taxpayers to deduct interest payments on debt financing , and thereby reduce the corporate income tax liability , while costs related to equity financing are non-tax deductible in most member states. the asymmetric tax treatment of debt and equity financing across the union induces a bias towards debt in investment decisions. moreover , where member states provide for a tax allowance on equity financing in their domestic law , such national measures differ significantly in terms of policy design. by adopting this directive , the union answers the call by parliament to address the tax-related debt-equity bias , including by reducing the interest deduction possibilities. 14a


### (3) in order to remove possible tax related distortions among member states , it is necessary to lay down a common framework of rules to address the tax related debt-equity bias across the union in a coordinated manner. such rules should ensure that equity and debt financing are treated in a similar way for tax purposes across the single market. at the same time , a common union legislative framework should be sustainable also in the short term for member states’ budgets. such framework should therefore include rules , on the one hand , for the tax deductibility of equity financing costs and , on the other , for limiting the tax deductibility of debt financing costs. ### (3) in order to remove possible tax related distortions among member states , it is necessary to lay down a common framework of rules to address the tax related debt-equity bias across the union in a coordinated manner. such rules should ensure that equity and debt financing are treated in a similar way for tax purposes across the single market. at the same time , the tax deductibility of debt and/or the creation of an allowance on increases in equity has a negative impact on public revenues. a common union legislative framework should be sustainable also in the short term for member states’ budgets. such framework should therefore include rules , on the one hand , for the tax deductibility of equity financing costs and , on the other , for limiting the tax deductibility of debt financing costs.


### (5) to neutralise the bias against equity financing , an allowance should be envisaged so that increases in a taxpayer's equity from one tax period to the next are deductible from its taxable base , subject to certain conditions. the allowance should be calculated by multiplying the increase in equity with a notional interest rate based on risk-free interest rate as laid down in the implementing acts adopted pursuant to article 77e(2) of directive 2009/138/ec. such risk-free interest rates are already part of eu law and have been practically and effectively applied as such. any part of the allowance that cannot be deducted in a tax period due to insufficient taxable profits may be carried forward. taking into account the specific challenges that small- and medium-sized enterprises (smes) face in accessing capital markets , an increased allowance on equity should be envisaged for taxpayers that are smes. in order for the deduction of an allowance on equity to be sustainable for public finances in the short term , it should be limited in time. to safeguard the system from abuses , it is necessary to exclude the tax value of a taxpayer's own shares as well as that of its participation in associated enterprises from the calculation of changes in equity. in the same vein , it is necessary to provide for the taxation of a decrease in a taxpayer’s equity from one tax period to the following one , to prevent an equity increase from being effected in an abusive manner. such a rule would also encourage the retention of a level of equity. it would apply so that where there is a decrease in equity of a taxpayer that has benefitted from an allowance on equity increase , an amount calculated in the same way as the allowance would become taxable for 10 tax periods; unless the taxpayer provides evidence that this decrease is exclusively due to losses incurred during the tax period or due to a legal obligation. ### (5) to neutralise the bias against equity financing , an allowance should be envisaged so that increases in a taxpayer's equity from one tax period to the next are deductible from its taxable base , subject to certain conditions. the allowance should be calculated by multiplying half of the increase in equity with a notional interest rate based on risk-free interest rate as laid down in the implementing acts adopted pursuant to article 77e(2) of directive 2009/138/ec. such risk-free interest rates are already part of eu law and have been practically and effectively applied as such. any part of the allowance that cannot be deducted in a tax period due to insufficient taxable profits may be carried forward. taking into account the specific challenges that small- and medium-sized enterprises (smes) and medium sized groups face in accessing capital markets , the allowance on equity will only be accessible for taxpayers that are smes or medium sized groups , in order to compensate for the fact that their financing costs are higher , and the availability of capital is lower. in order for the deduction of an allowance on equity to be sustainable for public finances in the short term , it should be limited in time. to safeguard the system from abuses , it is necessary to exclude the tax value of a taxpayer's own shares as well as that of its participation in associated enterprises from the calculation of changes in equity. in the same vein , it is necessary to provide for the taxation of a decrease in a taxpayer’s equity from one tax period to the following one , to prevent an equity increase from being effected in an abusive manner. such a rule would also encourage the retention of a level of equity. it would apply so that where there is a decrease in equity of a taxpayer that has benefitted from an allowance on equity increase , an amount calculated in the same way as the allowance would become taxable for 10 tax periods; unless the taxpayer provides evidence that this decrease is exclusively due to losses incurred during the tax period or due to a legal obligation.


### (5) to neutralise the bias against equity financing , an allowance should be envisaged so that increases in a taxpayer's equity from one tax period to the next are deductible from its taxable base , subject to certain conditions. the allowance should be calculated by multiplying the increase in equity with a notional interest rate based on risk-free interest rate as laid down in the implementing acts adopted pursuant to article 77e(2) of directive 2009/138/ec. such risk-free interest rates are already part of eu law and have been practically and effectively applied as such. any part of the allowance that cannot be deducted in a tax period due to insufficient taxable profits may be carried forward. taking into account the specific challenges that small- and medium-sized enterprises (smes) face in accessing capital markets , an increased allowance on equity should be envisaged for taxpayers that are smes. in order for the deduction of an allowance on equity to be sustainable for public finances in the short term , it should be limited in time. to safeguard the system from abuses , it is necessary to exclude the tax value of a taxpayer's own shares as well as that of its participation in associated enterprises from the calculation of changes in equity. in the same vein , it is necessary to provide for the taxation of a decrease in a taxpayer’s equity from one tax period to the following one , to prevent an equity increase from being effected in an abusive manner. such a rule would also encourage the retention of a level of equity. it would apply so that where there is a decrease in equity of a taxpayer that has benefitted from an allowance on equity increase , an amount calculated in the same way as the allowance would become taxable for 10 tax periods; unless the taxpayer provides evidence that this decrease is exclusively due to losses incurred during the tax period or due to a legal obligation. ### (5) to neutralise the bias against equity financing , an allowance should be envisaged so that increases in a taxpayer's equity from one tax period to the next are deductible from its taxable base , subject to certain conditions. the allowance should be calculated by multiplying half of the increase in equity with a notional interest rate based on risk-free interest rate as laid down in the implementing acts adopted pursuant to article 77e(2) of directive 2009/138/ec. such risk-free interest rates are already part of eu law and have been practically and effectively applied as such. any part of the allowance that cannot be deducted in a tax period due to insufficient taxable profits may be carried forward. taking into account the specific challenges that small- and medium-sized enterprises (smes) face in accessing capital markets , an increased allowance on equity should be envisaged for taxpayers that are smes. in order for the deduction of an allowance on equity to be sustainable for public finances in the short term , it should be limited in time. to safeguard the system from abuses , it is necessary to exclude the tax value of a taxpayer's own shares as well as that of its participation in associated enterprises from the calculation of changes in equity. in the same vein , it is necessary to provide for the taxation of a decrease in a taxpayer’s equity from one tax period to the following one , to prevent an equity increase from being effected in an abusive manner. such a rule would also encourage the retention of a level of equity. it would apply so that where there is a decrease in equity of a taxpayer that has benefitted from an allowance on equity increase , an amount calculated in the same way as the allowance would become taxable for 10 tax periods; unless the taxpayer provides evidence that this decrease is exclusively due to losses incurred during the tax period or due to a legal obligation.


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


### this directive lays down rules on the deduction , for corporate income tax purposes , of an allowance on increases in equity and on the limitation of the tax deductibility of exceeding borrowing costs. ### this directive lays down rules on the deduction , for corporate income tax purposes , of an allowance on increases in equity for smes and medium-size groups and on the limitation of the tax deductibility of exceeding borrowing costs large undertakings and large groups.


### an allowance on equity shall be deductible , for 10 consecutive tax periods , from the taxable base of a taxpayer for corporate income tax purposes up to 30% of the taxpayer's earnings before interest , tax , depreciation and amortisation (“ebitda ”). ### an allowance on equity shall be deductible , for 5 consecutive tax periods , from the taxable base of a taxpayer , who is a sme or a medium-sized group , for corporate income tax purposes. the sum of the allowance and the deduction for interest rates is deductible up to 30% of the taxpayer's earnings before interest , tax , depreciation and amortisation (“ebitda ”).


### if the deductible allowance on equity , in accordance with the first subparagraph , is higher than the taxpayer’s net taxable income in a tax period , member states shall ensure that the taxpayer may carry forward , without time limitation , the excess of allowance on equity to the following periods. ### deleted


### member states shall ensure that the taxpayers may carry forward , for a maximum of 5 tax periods , the part of the allowance on equity which exceeds 30% of ebitda in a tax period. ### deleted


### the allowance on equity shall be equal to the base of the allowance multiplied by the 10-year risk-free interest rate for the relevant currency and increased by a risk premium of 1% or , where the taxpayer is an sme , a risk premium of 1.5%. ### the allowance on equity shall be equal to half of the base of the allowance multiplied by the 10-year risk-free interest rate for the relevant currency and increased by a risk premium of 1% or , where the taxpayer is an sme , a risk premium of 1.5%.


### 3. if , after having obtained an allowance on equity , the base of the allowance on equity is negative in a tax period , an amount equal to the negative allowance on equity shall become taxable for 10 consecutive tax periods , up to the overall increase of net equity for which such allowance has been obtained under this directive , unless the taxpayer provides sufficient evidence that this is due to accounting losses incurred during the tax period or due to a legal obligation to reduce capital. ### 3. if , after having obtained an allowance on equity , the base of the allowance on equity is negative in a tax period , an amount equal to the negative allowance on equity shall become taxable for 5 consecutive tax periods , up to the overall increase of net equity for which such allowance has been obtained under this directive , unless the taxpayer provides sufficient evidence that this is due to accounting losses incurred during the tax period or due to a legal obligation to reduce capital.


### 3. where an increase in equity is the result of a reorganisation of a group , such increase shall only be taken into account for the calculation of the base of the allowance on equity for the taxpayer in accordance with article 4 to the extent that it does not result in converting into new equity the equity (or part thereof) that already existed in the group before the re-organisation. ### 3. where an increase in equity is the result of a reorganisation of a medium- sized group , such increase shall only be taken into account for the calculation of the base of the allowance on equity for the taxpayer in accordance with article 4 to the extent that it does not result in converting into new equity the equity (or part thereof) that already existed in the medium- sized group before the re-organisation.


### 1. member states shall ensure that a taxpayer is able to deduct from its taxable base for corporate income tax purposes exceeding borrowing costs as defined in article 1 , point (2) , of council directive (eu) 2016/116435 up to an amount (a) corresponding to 85% of such costs incurred during the tax period. if such amount is higher than the amount (b) determined in accordance with article 4 of directive (eu) 2016/1164 , member states shall ensure that the taxpayer be entitled to deduct only the lower of the two amounts in the tax period. the difference between the two amounts (a) and (b) shall be carried forward or back in accordance with article 4 of directive (eu) 2016/1164. ### 1. member states shall ensure that a taxpayer , who is a large undertaking or a large group , is able to deduct from its taxable base for corporate income tax purposes exceeding borrowing costs as defined in article 1 , point (2) , of council directive (eu) 2016/116435 up to an amount (a) corresponding to 50% of such costs incurred during the tax period. if such amount is higher than the amount (b) determined in accordance with article 4 of directive (eu) 2016/1164 , member states shall ensure that the taxpayer be entitled to deduct only the lower of the two amounts in the tax period. the difference between the two amounts (a) and (b) shall be carried forward or back in accordance with article 4 of directive (eu) 2016/1164.


### 1. member states shall ensure that a taxpayer is able to deduct from its taxable base for corporate income tax purposes exceeding borrowing costs as defined in article 1 , point (2) , of council directive (eu) 2016/116435 up to an amount (a) corresponding to 85% of such costs incurred during the tax period. if such amount is higher than the amount (b) determined in accordance with article 4 of directive (eu) 2016/1164 , member states shall ensure that the taxpayer be entitled to deduct only the lower of the two amounts in the tax period. the difference between the two amounts (a) and (b) shall be carried forward or back in accordance with article 4 of directive (eu) 2016/1164. ### 1. member states shall ensure that a taxpayer is able to deduct from its taxable base for corporate income tax purposes exceeding borrowing costs as defined in article 1 , point (2) , of council directive (eu) 2016/116435 up to an amount (a) corresponding to 50% of such costs incurred during the tax period. if such amount is higher than the amount (b) determined in accordance with article 4 of directive (eu) 2016/1164 , member states shall ensure that the taxpayer be entitled to deduct only the lower of the two amounts in the tax period. the difference between the two amounts (a) and (b) shall be carried forward or back in accordance with article 4 of directive (eu) 2016/1164.


### the number of smes that have benefitted from the allowance in the tax period , including as a percentage of the total number of smes falling within the scope of this directive and the number of smes that have benefitted from the allowance , which are part of large groups within the meaning of article 3(7) of directive 2013/34/eu; ### the number of smes and medium-size groups that have benefitted from the allowance in the tax period , including as a percentage of the total number of smes and medium-sized groups falling within the scope of this directive and the number of smes that have benefitted from the allowance , which are part of large groups within the meaning of article 3(7) of directive 2013/34/eu;


### 2. member states may defer the application of the provisions of this directive to taxpayers that on [1 january 2024] benefit from an allowance on equity under national law for a period up to 10 years and in no case for a period longer than the duration of the benefit under national law. ### 2. member states may defer the application of the provisions of this directive to taxpayers that on [1 january 2024] benefit from an allowance on equity under national law for a period up to 5 years and in no case for a period longer than the duration of the benefit under national law.


### a. whereas in its 20 years of existence , the euro has become a symbol of europe’s economic strength and of its position in the world; ### a. whereas in its 20 years of existence , the euro has become a symbol of europe’s economic strength and of its position in the world , becoming a channel of proliferating european values of democracy , free markets and international cooperation;


### (1) article 2 is amended as follows: ### deleted


### (1) the commission may designate a replacement benchmark for a benchmark that will cease to be published where the cessation of that publication may result in significant disruption in the functioning of financial markets in the union and provided that any of the following events has occurred: ### (1) the commission may designate one or more replacement benchmarks , where the cessation of the publication of that benchmark may result in significant and adverse impacts on market integrity or financial stability in the union or in one of its member states provided that any of the following events has occurred:


### the competent authority for the administrator of that benchmark has issued a public statement , or has published information , in which it is announced that the capability of that benchmark to measure the underlying market or economic reality cannot be restored through the exercise of any of the remedial powers referred to in article 23; ### the competent authority for the administrator of that benchmark has issued a public statement , or has published information , in which it is announced that the capability of that benchmark to measure the underlying market or economic reality cannot be restored;


### (2) the replacement benchmark shall , by operation of law , replace all references to the benchmark that has ceased to be published in financial instruments , financial contracts and measurements of the performance of an investment fund where all of the following conditions are fulfilled: ### (2) the replacement benchmark shall , by operation of law , replace all references to the benchmark in contracts subject to article 2(1) where all of the following conditions are fulfilled:


### those financial instruments , contracts and performance measurements reference the benchmark that has ceased to be published on the date the implementing act designating the replacement benchmark enters into force; ### those contracts reference the benchmark that has ceased to be published on the date the implementing act designating the replacement benchmark enters into force;


### 1. welcomes the role of the ecb in safeguarding euro stability; highlights that the statutory independence of the ecb , as laid down in the treaties , is a prerequisite for it to fulfil its mandate of maintaining price stability; ### 1. welcomes the role of the ecb in safeguarding euro stability; 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 tfue defines that , besides the primary mandate of ecb of maintaining price stability , ecb shall also support the general economic policies in the union with a view to contributing to the achievement of the objectives of the union; underlines that sustainable development , convergence , full employment , and social progress are general objectives of the union as defined in tfeu; understands that the severity of the pandemic crisis has forced the ecb to shift attention away from its monetary policy framework strategy review , which has been postponed to mid-2021;


### 2. is concerned about the unprecedented healthcare and economic crisis caused by the covid-19 pandemic , with a sharp contraction of the euro area economy and rapidly deteriorating labour market conditions; notes that euro area activity is expected to rebound , although the speed and scale of the rebound remains highly uncertain; ### 2. is concerned about the unprecedented healthcare , economic and social crisis caused by the covid-19 pandemic , with a sharp contraction of the euro area economy and rapidly deteriorating labour market conditions , including the rise of unemployment; notes that euro area activity is expected to rebound , although the speed and scale of the rebound remains highly uncertain;


### 3. is concerned , moreover , that the balance of risks to the growth outlook remains to the downside in a context of exceptional uncertainty where the extent of the contraction and the recovery will depend on the duration and effectiveness of the containment measures , the success of policies to mitigate the adverse impact on incomes and employment , and the extent to which supply capacity and domestic demand are permanently affected; ### 3. is concerned , moreover , that the balance of risks to the growth outlook remains to the downside in a context of exceptional uncertainty where the extent of the contraction and the recovery will depend on the duration and effectiveness of the containment measures , the success of fiscal and monetary policies to mitigate the adverse impact on incomes and employment , and the extent to which supply capacity and domestic demand are permanently affected;


### 5. notes that inflation is underestimated in the euro area due to an inadequate share of housing costs in the hicp basket2 ; calls for a re-adjustment of the basket to reflect the fact that european households spend 24 % of their income on housing-related expenditure; ### 5. notes that inflation in the euro area reflects the evolution of actual expenditure made by households on goods or services; highlights the importance of this indicator to assess price stability in the euro area;


### 6. acknowledges president lagarde’s strong call for ‘full alignment of fiscal and monetary policies’; ### 6. welcomes president lagarde’s strong call for ‘full alignment of fiscal and monetary policies’; underlines that there are strong complementarities between fiscal and monetary policies and that a monetary union without a common fiscal policy is exposed to too much pressure; welcomes in this regard the commission’s plan to issue up to €750bn bonds to finance the recovery and the green transition and calls on the ecb to include these bonds in its asset purchases programmes;


### 7. notes the quick and substantial ecb monetary policy response to the covid-19 crisis in a context of emergency; ### 7. welcomes the quick and substantial ecb monetary policy response to the covid-19 crisis in a context of emergency; acknowledges the positive impact of such response on the economic situation of the euro area; warns against a premature withdrawal of the measures;


### 8. stresses that monetary policy alone will not suffice to achieve a sustainable economic recovery; emphasises that far-reaching structural reforms and initiatives are necessary to restore and enhance competitiveness across the union; believes that the impact of monetary policy on the recovery is limited and , while respecting the independence and mandate of the ecb , expresses caution regarding the further expansion of monetary measures; ### 8. stresses that monetary policy alone will not suffice to achieve a sustainable economic recovery; emphasises that far-reaching structural reforms and initiatives are necessary to restore and enhance competitiveness across the union; believes that the impact of monetary policy on the recovery is limited and , while respecting the independence and mandate of the ecb , calls on the ecb to consider the possibility of using other unconventional policy measures that have the potential to impact demand more directly and stimulate the economy;


### 10. asks the ecb to monitor the proportionality of quantitative easing to the risks in its balance sheets , asset price inflation and the potential misallocation of resources; ### 10. welcomes the ecb for its continuous monitoring of the proportionality and effectiveness of quantitative easing , including its potential side effects; stresses the importance of maintaining a highly accommodative monetary policy with low interest rates; recalls in this regard that the alternative to unconventional monetary policies would be to make additional cuts in the reference interest rate , which could cause severe disturbances in the financial markets and the economy;


### 11. regrets the detrimental impact of long-term low interest rates on insurers and pension funds and expresses concern about the potential impacts on solvency; stresses the financial burden this places on many citizens across the union; ### 11. notes the concerns expressed by pension and insurance funds with regard to lower returns on their deposits due to the low interest rates’ environment; highlights however that low interest rates are not only necessary to fulfil the ecb price stability mandate , but they also had and continue to have considerable positive effects on growth , employment and investment in the euro area; underlines that low interest rates offer opportunities to consumers , companies , including smes , workers and borrowers , who can benefit from stronger economic momentum , lower unemployment and lower borrowing costs; highlights that the negative effects on banks’ net interest income have been counterbalanced by far by the benefits from more bank lending and lower costs for provisions and losses; highlights that pension and insurance funds benefit from the financial stability and economic growth provided by the low interest rates environment;


### 12. notes the linkage between monetary policy and increasing housing prices in the euro area; emphasises that the persistently high housing cost overburden rate of 9.6 % in 2018 is expected to increase due to the pandemic , and asks the ecb to evaluate the regional and sectoral impact of its quantitative easing programme on the cost of living across the union; ### 12. underlines the linkage between monetary policy and economic growth; acknowledges that the share of income that european households spend on housing-related expenditure has been decreasing since 2013; is concerned , however , that the housing cost overburden rate , that fell from 11.4% in 2014 to 9.8% in 2018 , is expected to increase due to the pandemic;


### 13. understands that the severity of the crisis has forced the ecb to shift attention away from its monetary policy framework strategy review , which has been postponed to mid-2021; calls on the ecb to involve parliament in the review process; ### deleted


### 14. notes the impact of climate change on inflation dynamics and transmission risks in monetary policy; recalls the impact of the ecb in maintaining price stability; emphasises that this mandate must not be confounded with climate policy; ### 14. notes the impact of climate change on inflation dynamics and transmission risks in monetary policy; stresses that the mandate of the ecb in maintaining price stability is compatible with its secondary mandate of supporting the general economic policies of the union; emphasises that achieving a climate-neutral economy by 2050 , at the latest , is one essential objective of the union; recalls that the ecb , as an european institution , is bound by the paris agreement;


### 15. notes that the purchases of green bonds and their share of the ecb’s portfolio continue to increase; ### 15. welcomes that the purchases of green bonds and their share of the ecb’s portfolio continue to increase and highlights the key achievement obtained with the regulation on the establishment of a framework to facilitate sustainable investment (known as ‘taxonomy regulation’) that establishes the criteria for determining whether an economic activity qualifies as environmentally sustainable;


### 18. expresses concern about the steadily increasing divergence of target2 balances within the escb; notes that the interpretation of these divergences is contested; ### 18. notes the increasing divergence of target2 balances within the escb; acknowledges that these divergences are a consequence of a broader economic divergence process that results from the single market and the euro architecture; stresses the importance of pursuing policies that promote convergence to compensate the increasing economic divergence;


### 19. calls on the ecb to increase its monitoring of the development of crypto-currencies and the increased cyber-security risks , and to assess the possible need for central bank digital currencies; calls on the ecb to ensure an adequate balance between allowing regulatory financial innovation in the fintech area and ensuring financial stability; ### 19. calls on the ecb to increase its monitoring of the development of crypto-currencies and the increased cyber-security risks , and to assess the possible need for central bank digital currencies whilst at the same time recognising the importance of cash;


### 19. calls on the ecb to increase its monitoring of the development of crypto-currencies and the increased cyber-security risks , and to assess the possible need for central bank digital currencies; calls on the ecb to ensure an adequate balance between allowing regulatory financial innovation in the fintech area and ensuring financial stability; ### 19. takes note of the outcomes of the analysis of the ecb crypto-assets task force; is concerned with the risks of money laundering , terrorism financing and other criminal activities related with the anonymity provided by crypto-assets; takes note of the ecb’s report on a digital euro; calls on the ecb to increase its monitoring of the development of crypto-currencies and the increased cyber-security risks , and to assess the possible need for central bank digital currencies; takes note of the ongoing work and experiences of other central banks in regard to crypto-assets; calls on the ecb to ensure an adequate balance between allowing regulatory financial innovation in the fintech area and ensuring financial stability;


### 20. shares the ecb’s concerns regarding the rapid growth of the non-bank financial sector; stresses the need for adequate regulation in this field; ### 20. shares the ecb’s concerns regarding the rapid growth of the non-bank financial sector; stresses the need for adequate regulation in this field; is concerned in this respect about the findings by esma in it trends risks and vulnerability report , 2 , 2020 around the severe liquidity challenges experienced by some money market funds end march 2020. agrees with esmas chairs statement that the one area in which the regulatory framework was not capable of responding adequately to the pandemic stresses was in the money market funds sector and that the exceptional interventions of central banks were in fact decisive in ensuring that these funds would continue to meet regulatory requirements. agrees therefore that further reforms of the regulatory framework of these funds are needed.


### 20. shares the ecb’s concerns regarding the rapid growth of the non-bank financial sector; stresses the need for adequate regulation in this field; ### 20. shares the ecb’s concerns regarding the rapid growth of the non-bank financial sector; stresses the need for adequate regulation in this field; stresses the need for the ecb to mitigate the systemic risk due to an increasing number of non-bank regulated entities clustered around banks for access to the payments system; to this end , further encourages the ecb to establish a level playing field through providing direct access to payments systems for regulated non-banks , subject to strict requirements;


### 20. shares the ecb’s concerns regarding the rapid growth of the non-bank financial sector; stresses the need for adequate regulation in this field; ### 20. shares the ecb’s concerns regarding the rapid growth of the non-bank financial sector , previously known as shadow banking; stresses the need for adequate regulation in this field;


### 22. calls on the ecb to explore ways of strengthening the international role of the euro , as this would increase the eu’s ability to frame its policy stance independently vis-à-vis other global powers and is a key element in safeguarding european economic sovereignty; ### 22. calls on the ecb to explore ways of strengthening the international role of the euro , as this would increase the eu’s ability to frame its policy stance independently vis-à-vis other global powers and is a key element in safeguarding european economic sovereignty; underlines that strengthening the role of the euro requires the deepening of the european monetary union , including a fiscal capacity for the euro area with a stabilisation function , the creation of a european safe asset and the completion of the banking union and capital markets’ union;


### 23. welcomes bulgaria and croatia’s entry into erm ii in july 2020; supports a swift target date for the adoption of the euro in both countries; welcomes the comprehensive screening of croatian and bulgarian banks by the ecb in july and august 2019; ### 23. welcomes bulgaria and croatia’s entry into erm ii in july 2020; supports a swift target date for the adoption of the euro in both countries; welcomes the comprehensive screening of croatian and bulgarian banks by the ecb in july and august 2019; draws attention to the requirement , laid down in the treaties , for every member state , except for denmark , to adopt the single currency once they have met the maastricht convergence criteria;


### 23. welcomes bulgaria and croatia’s entry into erm ii in july 2020; supports a swift target date for the adoption of the euro in both countries; welcomes the comprehensive screening of croatian and bulgarian banks by the ecb in july and august 2019; ### 23. welcomes bulgaria and croatia’s entry into erm ii in july 2020; supports a swift target date for the adoption of the euro in both countries; welcomes the comprehensive screening of croatian and bulgarian banks by the ecb in july and august 2019; underlines the requirement for every eu member state except denmark , to adopt the single currency once it has met the maastricht convergence criteria;


### 24. echoes president lagarde’s openness to greater dialogue and stresses the need to further enhance the ecb’s accountability and transparency arrangements; emphasises the need to reflect on how scrutiny of the ecb’s monetary policy may be enhanced at eu level; ### 24. echoes president lagarde’s openness to greater dialogue and stresses the need to further enhance the ecb’s accountability and transparency arrangements; emphasises the need to reflect on how scrutiny of the ecb by the european parliament may be enhanced;


### 25. emphasises that executive board member nominations should be prepared carefully , with full transparency and together with parliament in line with the treaties; calls on the council to draw up a shortlist for any upcoming vacancies and to share this with parliament , thus allowing parliament to play a more meaningful advisory role in the appointment process; regrets that no satisfactory progress has been made to date; recalls that the equal treatment of men and women is a constitutional principle that must be strictly adhered to; ### 25. emphasises that executive board member nominations should be prepared carefully , with full transparency and together with parliament in line with the treaties; calls on the council to draw up a shortlist for any upcoming vacancies and to share this with parliament , thus allowing parliament to play a more meaningful advisory role in the appointment process; regrets that no satisfactory progress has been made to date; recalls the importance of paragraph 4 of parliament’s resolution of 14 march 2019 on gender balance in eu economic and monetary affairs nominations , in which parliament commits itself not to take into account shortlists that do not respect the gender balance principle; regrets that parliament’s position was not taken into due account in recent shortlists of candidates proposed by the eurogroup;


### 25. emphasises that executive board member nominations should be prepared carefully , with full transparency and together with parliament in line with the treaties; calls on the council to draw up a shortlist for any upcoming vacancies and to share this with parliament , thus allowing parliament to play a more meaningful advisory role in the appointment process; regrets that no satisfactory progress has been made to date; recalls that the equal treatment of men and women is a constitutional principle that must be strictly adhered to; ### 25. emphasises that executive board member nominations should be prepared carefully , with full transparency and together with parliament in line with the treaties; calls on the council to draw up a gender- balanced shortlist for any upcoming vacancies and to share this with parliament , thus allowing parliament to play a more meaningful advisory role in the appointment process; regrets that no satisfactory progress has been made to date; recalls that the equal treatment of men and women is a constitutional principle that must be strictly adhered to;


### 27. recalls the german federal constitutional court decision of 5 may 2020 on the ecb , as well as the ecb governing council statement of the same day; notes the continuous proportionality assessment of all programmes; lauds the ecb’s subsequent decision to disclose non-public documents related to the public sector purchase programme (pspp) to the bundesbank; ### 27. takes note of the german federal constitutional court decision of 5 may 2020 on the ecb , as well as the ecb governing council statement of the same day; acknowledges the ecb’s continuous proportionality assessment of all programmes; notes ecb’s subsequent decision to disclose non-public documents related to the public sector purchase programme (pspp) to the european parliament , the german federal government , the bundestag and the bundesbank;


### 28. acknowledges , and congratulates the ecb and president lagarde on , the ongoing efforts to improve communication and transparency with the european parliament; ### 28. acknowledges , and congratulates the ecb and president lagarde on , the ongoing efforts to improve communication and transparency with the european parliament; suggests on the other hand a regular dialogue in camera between econ members and relevant ecb representatives following on publication of the latest available account of proceedings of the governing council to assess ecb decisions ahead of and in parallel with the monetary dialogues;


### c. whereas the two most common components of crypto-assets adopted are (i) the private nature of the asset , and (ii) the use of cryptography and distributed ledger technology (dlt) or similar technology to underpin exchanges of the asset; ### c. whereas the two most common components of crypto-assets adopted are (i) the private nature of the asset , and (ii) the use of cryptography and distributed ledger technology (dlt) or similar technology to underpin exchanges of the asset and its inherent or perceived value;


### d. whereas stablecoins exhibit similar features to crypto-assets and do not take the form of any specific currency , but rely on a set of tools which aim to minimise fluctuations of their price as denominated in a currency; ### d. whereas stablecoins exhibit similar features to crypto-assets and do not take the form of any specific currency , but rely on a set of tools which aim to minimise fluctuations of their price as denominated in a currency; whereas some crypto-assets , including stablecoins and their associated technologies , have the potential to increase efficiencies , competition and transparency and to bring substantial opportunities and benefits to society , since some of them could lead to cheaper and faster payments and offer new funding sources for smes;


### i. whereas experts of the european central bank (ecb) noted in their publication of 20193 , that even though crypto-assets are highly speculative , they do not represent an immediate threat to financial stability; ### i. whereas experts of the european central bank (ecb) noted in their publication of 20193 , that even though crypto-assets are highly speculative , they do not represent an immediate threat to financial stability; whereas that view has been shared by both esma[1][5]3a and the eba[2][6]3b;


### j. whereas digital finance can contribute in a number of ways to tackling the economic effects of the covid-19 outbreak as regards consequences for citizens , smes and other businesses and financial services; ### deleted


### 1. welcomes the commitment of the commission to finalising an action plan on fintech by q3 of 2020; considers that a commission proposal on crypto-assets , as well as a cross-sectoral financial services act on operational and cyber resilience , are timely and necessary due to recent developments in the markets; requests that the commission submit on the basis of article 114 respective proposal following the recommendations set out in the annex hereto; ### 1. takes note of the commitment of the commission to finalising an action plan on fintech by q3 of 2020; considers that a commission proposal on crypto-assets , as well as a cross-sectoral financial services act on operational and cyber resilience , are timely and necessary due to recent developments in the markets; requests that the commission submit on the basis of article 114 respective proposal following the recommendations set out in the annex hereto;


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


### 2. considers that fintech will be integral to the success of the capital markets union (cmu) and encourages the commission to consider how to harness the benefits of fintech in driving forward capital market integration in the union; ### 2. considers that fintech will be integral to the success of the capital markets union (cmu) and encourages the commission to consider how to harness the benefits of fintech in driving forward capital market integration in the union; whilst at the same time addressing at regulatory and supervisory level the specific risks that fintech , namely crypto-assets , pose;


### 5. calls on the commission to act as first mover in order to create a favourable environment for european fintech hubs and firms to scale up; ### deleted


### c. a risk-based approach; ### c. a risk-based approach based on transparency and accountability;


### 7. points out that union level measures should not stifle opportunities for businesses to grow and develop within the union; ### 7. points out that union level can enhance a regulatory and supervisory level playing field across the internal market and bring certainty to businesses and consumers , thereby offering opportunities for businesses to grow and develop within the union while avoiding forum shopping and regulatory arbitrage;


### 7. points out that union level measures should not stifle opportunities for businesses to grow and develop within the union; ### 7. points out that union level measures should not stifle opportunities for businesses to grow and develop within the union so that the set framework should in no way serve as a barrier to entry for innovative openings especially by young entrepreneurs in the digital sector;


### 8. highlights the importance of the triangle of trust , identity and data in order to ensure that operators , consumers and supervisors are able to have confidence in digital finance; ### 8. highlights the importance of the triangle of trust , identity and data in order to ensure that operators , consumers and supervisors are able to have confidence in digital finance; considers appropriate to further analyse initiatives for implementing cbdcs both within the union and on a global level; calls on the commission and eu supervisory authorities to promote research and international discussions in this field , assessing potential benefits and all implications; believes that parameters and principles for analysis should rely on the role of cbdcs in supplementing the decline in cash use , ensuring people’s trust in the financial system , providing for greater financial inclusion and access to a public means of payment , all the while guaranteeing financial stability and the pursuit of socio-economic objectives;


### 9. considers that developing a pan-european taxonomy for crypto-assets is desirable as a step towards fostering a common understanding , facilitating collaboration across jurisdictions and providing greater regulatory certainty for market participants engaged in cross border activity; recommends taking into account the importance of international cooperation and global initiatives as regards frameworks for crypto-assets , bearing in mind in particular their borderless nature; cautions , however , that developing an open-ended taxonomy template may be more appropriate for this evolving market segment; ### 9. considers that developing a pan-european taxonomy for crypto-assets is desirable as a step towards fostering a common understanding , facilitating collaboration across jurisdictions and providing greater regulatory certainty for market participants engaged in cross border activity; recommends taking into account the importance of international cooperation and global initiatives as regards frameworks for crypto-assets , bearing in mind in particular their borderless nature; cautions , however , that developing an open-ended taxonomy template may be more appropriate for this evolving market segment; believes , however , that there is no one size fits all solution when it comes to legal qualification of crypto-assets and therefore a framework which allows for monitoring , adaption and product intervention by eu supervisors is important;


### 10. believes , therefore , that any further categorisation should be balanced and flexible in order to give space for innovation in the sector while ensuring that risks can be identified at an early stage; ### 10. believes , therefore , that any further categorisation should be balanced and flexible in order to give space for innovation in the sector while ensuring that risks can be identified and mitigated at an early stage;


### 11. further stresses that clear guidance on the applicable regulatory and prudential processes is needed in order to provide regulatory certainty regarding crypto-assets; ### 11. calls for clearer guidance on regulatory and prudential processes to follow in order to provide regulatory certainty and adequate supervision for a particular crypto-assets; subscribes to the view of the basel committee and eba that banks acquiring crypto-assets , should apply a conservative prudential treatment to such exposures , especially for high risk crypto-assets; shares furthermore the view that strong due diligence , a robust governance and risk management , full disclosure of any exposure and a solid dialogue with the supervisors are all of paramount importance; believes that the forthcoming revision of the capital requirements framework should include amendments in this respect;


### 12. points out that applying existing regulations to previously unregulated crypto-assets will be necessary , as will creating bespoke regulatory regimes for evolving crypto-asset activities , such as initial coin offerings; ### 12. points out that applying existing regulations to previously unregulated crypto-assets will be necessary , as will creating bespoke regulatory regimes for evolving crypto-asset activities , such as initial coin offerings;


### 13. highlights that a common union framework on crypto-assets should help increase consumer and investor protection , enhance know your customer (kyc) obligations and oversight of the underlying technology; ### 13. highlights that a common union framework on crypto-assets should help increase consumer and investor protection , enhance know your customer (kyc) obligations and oversight of the underlying technology;


### 14. points out that with the increasing digitalisation of financial services , as well as outsourcing to external it solution or maintenance providers , such as cloud providers , the exposure of financial institutions and markets to disruption caused by internal failures or external attacks is becoming more pronounced; ### 14. points out that with the increasing digitalisation of financial services , as well as outsourcing to external it solution or maintenance providers , such as cloud providers , the exposure of financial institutions and markets to disruption caused by internal failures , or external attacks or as a consequence of financial distress (resolution) is becoming more pronounced;


### a. modernisation; ### a. modernisation and compliance with international standards , such as the basel committee on banking supervision standard 239;


### 17. stresses the need for further information sharing , in particular on incidents , and enhanced coordination between relevant regulatory and supervisory authorities; ### 17. stresses the need for further information sharing , in particular on incidents , and enhanced coordination between relevant regulatory and supervisory authorities , taking into account that building resilience and preparedness to deal with large scale cyber and operational incidents requires effective cooperation not only cross-borders but also across various sectors;


### 19. points out that the union is the global standard setter as regards personal data protection; highlights that the transfer and use of personal and non-personal data in the financial services sector should meet all relevant standards while allowing for the flow of data needed to scale up innovative finance initiatives; ### 19. points out that the union is the global standard setter as regards personal data protection; highlights that the transfer and use of personal and non-personal data in the financial services sector should be in accordance with fundamental rights , relevant legislation and international agreements and allow for the flow of data needed to scale up innovative finance initiatives to be guaranteed in a lawful and secure manner;


### 20. requests , in this regard , that the commission examines how to ensure that digital finance entities can access on an equitable basis relevant and useful data to help ensure that innovative fintech businesses can grow within the union and beyond; ### 20. requests , in this regard , that the commission examines how to ensure that digital finance entities can access on an equitable basis relevant and useful data to help ensure that innovative fintech businesses can grow within the union and beyond; calls on the commission to monitor the offering of financial services by “bigtech” firms , and also how the competitive advantages inherent to these operators may distort competition in the market , harm the interests of consumers and innovation;


### 22. points out that customer data or “big data” is being increasingly used by financial institutions; recalls the provisions of article 71 of the gdpr and calls on all stakeholders to increase efforts to guarantee the enforcement of the rights therein; ### 22. points out that customer data or “big data” is being increasingly used by financial institutions; reiterates the conclusions and recommendations from its resolution of 14 march 2017 on fundamental rights implications of big data: privacy , data protection , non-discrimination , security and law-enforcement; recalls the legislative framework for processing of personal data provided by the gdpr and calls on all stakeholders to ensure the enforcement of the rights therein; highlights , in particular , the principle regarding the individuals’ right to own and control over their data and the right to data portability;


### 23. believes that the lack of accessible data and information regarding fintech activities can be a detriment to growth; advocates for increased transparency and enhanced reporting of fintech activity so as to reduce asymmetries and risks; ### 23. believes that the lack of accessible data and information regarding fintech activities can be a detriment to growth; advocates for increased transparency and enhanced reporting of fintech activity so as to reduce asymmetries and risks in particular regarding incumbent big data operators that may draw disproportionate benefits from increased access to data;


### 24. calls for effective oversight of ’big data’ analytics in a way that addresses the opacity of models while ensuring that there is sufficient access to relevant and quality data; ### 24. calls for effective oversight of ’big data’ analytics in a way that addresses the opacity of models while ensuring that there is sufficient access to relevant and quality data; emphasises the need for much greater algorithmic accountability and transparency with regard to data processing and analytics as an essential tool to guarantee that the individual is appropriately informed about the processing of their personal data; calls on the commission to assess which initiatives , legislative and non-legislative , can be taken in this regard;


### (7) guarantees provided in the context of the covid-19 pandemic by national governments or other public entities , which are eligible as credit protection providers under the credit risk mitigation rules set out in chapter four of part three of regulation (eu) no 575/2013 are comparable regarding their risk mitigating effects to guarantees provided by official export credit agencies as referred to in article 47c of regulation (eu) no 575/2013. it is therefore justified to align the minimum coverage requirements for non-performing exposures benefiting from guarantees granted by national governments or other public entities to those benefiting from guarantees granted by official export credit agencies. therefore , guarantees and counter-guarantees that are extended in the context of the covid-19 pandemic in accordance with state aid rules should be treated in the same way as guarantees provided by official export credit agencies. ### (7) guarantees provided in the context of the covid-19 pandemic by national governments or other public entities , which are eligible as credit protection providers under the credit risk mitigation rules set out in chapter four of part three of regulation (eu) no 575/2013 are comparable regarding their risk mitigating effects to guarantees provided by official export credit agencies as referred to in article 47c of regulation (eu) no 575/2013. it is therefore justified to align the minimum coverage requirements for non-performing exposures benefiting from guarantees granted by national governments or other public entities to those benefiting from guarantees granted by official export credit agencies on a permanent basis.


### (11) to mitigate the potential impact that a sudden increase in expected credit loss provisions may have on institutions’ capacity to lend to clients at times when it is most needed , the transitional arrangements should be extended by two years and institutions should be allowed to fully add-back to their common equity tier 1 capital any increase in new expected credit loss provisions that they recognise in 2020 and 2021 for their financial assets , which are not credit-impaired. this would bring additional relief to the impact of the covid-19 crisis on institutions’ possible rise in provisioning needs under ifrs 9 while maintaining the transitional arrangements for the expected credit loss amounts established before the pandemic of covid-19. ### (11) to mitigate the potential impact that a sudden increase in expected credit loss provisions may have on institutions’ capacity to lend to clients at times when it is most needed , the transitional arrangements should be extended by two years and institutions should be allowed to fully add-back to their common equity tier 1 capital any increase in new expected credit loss provisions that they recognise in 2020 and 2021 for their financial assets , which are not credit-impaired. however , to avoid penalising those institutions with a positive dynamic component in the period of 2018-2019 , they should be allowed to replace the reference date of 2020 with 2018 when the sum of expected credit losses is lower at this date. this would bring additional relief to the impact of the covid-19 crisis on institutions’ possible rise in provisioning needs under ifrs 9 while maintaining the transitional arrangements for the expected credit loss amounts established before the pandemic of covid-19.


### 1. the risk weight for a position in an npe securitisation shall be calculated in accordance with article 254 , subject to a floor of 100%. ### 1. where the sec-irba or the sec-sa must be used in accordance with article 254 , the risk weight for a position in an npe securitisation shall be subject to a floor of 100%.


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


### 4. for the purpose of article 268(1) , expected losses associated with positions in an npe securitisation shall be included after deduction of the non-refundable price discount as referred to in paragraph 2 of this article and , where applicable , any additional specific credit risk adjustments. ### 4. for the purposes of article 268(1) , expected losses associated with positions in an npe securitisation shall be included after deduction of the non-refundable purchase price discount as referred to in paragraph 2 of this article and , where applicable , any additional specific credit risk adjustments.


### (1) the covid-19 pandemic is severely affecting people , companies , health systems and the economies of member states. the commission , in its communication to the european parliament , the european council , the council , the european economic and social committee and the committee of the regions of 27 may 2020 entitled ‘europe's moment: repair and prepare for the next generation’8 stressed that liquidity and access to finance will be a continued challenge in the months to come. it is therefore crucial to support the recovery from the severe economic shock caused by the covid-19 pandemic by introducing targeted amendments to existing pieces of financial legislation. this package of measures is adopted under the label “capital markets recovery package”. ### (1) the covid-19 pandemic is severely affecting people , companies , health systems and the economies of member states. the commission , in its communication to the european parliament , the european council , the council , the european economic and social committee and the committee of the regions of 27 may 2020 entitled ‘europe's moment: repair and prepare for the next generation’8 stressed that liquidity and access to finance will be a continued challenge in the months to come. it is therefore crucial to support the recovery from the severe economic shock caused by the covid-19 pandemic by introducing targeted amendments to existing pieces of financial legislation. this package of measures is adopted under the label “capital markets recovery package”. highlights the different initiatives taken by the eib-eif which have been adopted this year having a direct impact on the liquidity of companies , in particular smes.


### (2) directive 2014/65/eu of the european parliament and the council9 on markets in financial instruments was adopted in 2014 in response to the financial crisis that unfolded in 2007-2008. that directive has substantially strengthened the financial system in the union and guaranteed a high level of protection of investors across the union. further efforts to reduce regulatory complexity and investment firms’ compliance costs and to eliminate distortions of competition should be considered. ### (2) directive 2014/65/eu of the european parliament and the council9 on markets in financial instruments was adopted in 2014 in response to the financial crisis that unfolded in 2007-2008. that directive has substantially strengthened the financial system in the union and guaranteed a high level of protection of investors across the union. further efforts to reduce regulatory complexity and investment firms’ compliance costs and to eliminate distortions of competition could be considered , provided investor protection is sufficiently taken into consideration at the same time.


### (3) as regards the requirements that were intended to protect investors , directive 2014/65/eu has not fully achieved its objective to adapt measures that take the particularities of each category of investors (retail clients , professional clients and eligible counterparties) sufficiently into account. some of those requirements have not always enhanced the protection of investors but at times rather , hindered the smooth execution of investment decisions. it is therefore necessary to amend certain requirements in that directive to better balance the requirement to protect investors on the one hand and to facilitate the provision of investment services and the performance of investment activities on the other. ### (3) as regards the requirements that were intended to protect investors , directive 2014/65/eu has not fully achieved its objective to adapt measures that take the particularities of each category of investors (retail clients , professional clients and eligible counterparties) sufficiently into account. some of those requirements have not always enhanced the protection of investors but at times rather , hindered the smooth execution of investment decisions. to enhance investor protection better , it is critical that the debt level of retail investors is taken into account in the suitability assessment , in particular given the rising level of consumer debt due to covid-19. furthermore certain requirements in this directive could be amended to facilitate the provision of investment services and the performance of investment activities provided this is done in a balanced way which fully protects investors.


### (4) product governance requirements can restrict the sale of corporate bonds. corporate bonds with a “make whole clause” are generally considered safe and simple products that are eligible for retail clients. such a “make whole clause” protects investors against losses in case an issuer opts for early repayment by ensuring that those investors are provided with a payment equal to the net present value of the coupons they would have received if the bond would not have been called. the product governance requirements should therefore no longer apply to corporate bonds with such “make-whole clauses”. ### (4) under certain conditions , corporate bonds with a “make whole clause” could be regarded as products that are safer and more simple than other types of bonds , and therefore that may be more eligible for retail clients. such a “make whole clause” can offer some protection to investors against losses in case an issuer opts for early repayment by ensuring that those investors are provided with a payment equal to the net present value of the coupons they would have received if the bond would not have been called. the product governance requirements should therefore no longer apply to corporate bonds with “make-whole clauses” that can clearly be considered as safer and more simple products offering an appropriate level of protection to investors.


### (5) the call for evidence , launched by the european securities and markets authority (esma) , on the impact of inducements and cost and charges disclosure requirements under directive 2014/65/eu and the public consultation of the commission both confirmed that professional clients and eligible counterparties do not need standardised and mandatory cost information as they already receive the necessary information when they negotiate with their service provider. that information is tailored to their needs and often more detailed. eligible counterparties and professional clients should therefore be exempted from those cost and charges disclosure requirements , except with regard to the services of investment advice and portfolio management because professional clients entering into portfolio management or investment advice relationships are do not necessarily have sufficient expertise or knowledge to be exempted from the costs and charges disclosures. ### (5) urges the european commission to assess in the mifid review the impact of inducements on the objectivity and fairness of financial advice in the european union.


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


### (11) competent authorities currently have to establish and apply position limits on the size of a net position which a person can hold at all times in commodity derivatives traded on trading venues and in economically equivalent over-the-counter (eeotc) contracts designated by the commission. as the position limit regime has proved to be unfavourable for the development of new commodity markets , nascent commodity markets should be excluded from the position limit regime. instead , the position limits should only apply to those commodity derivatives that are deemed significant or critical commodity derivatives and their eeotc contracts. significant or critical derivatives are energy commodity derivatives with an open interest of at least 300 000 lots over a one-year period. due to its critical importance for citizens , agricultural commodities that have an underlying that is for human consumption , and their eeotc contracts , will remain under the current position limit regime. esma should be mandated to develop draft regulatory standards to define agricultural commodities with an underlying for human consumption subject to position limits and critical or significant derivatives subject to position limits. for significant and critical derivatives , esma should take into account the 300 000 lots open interest over a one-year period , the number of market participants and the underlying commodity. ### deleted


### (12) directive 2014/65/eu does not allow hedging exemptions for any financial entities. several predominantly commercial groups who set up a financial entity for their trading purposes found themselves in a situation where their financial entity could not carry out all the trading for the group , as the financial entity was not eligible for the hedging exemption. therefore , a narrowly defined hedging exemption for financial counterparties should be introduced. that hedging exemption should be available where , within a predominantly commercial group , a person has been registered as an investment firm and trades on behalf of that commercial group. to limit this hedging exemption to only those financial entities that trade for the non-financial entities in the predominantly commercial group , that hedging exemption should apply to those positions held by that financial entity that are objectively measurable as reducing risks directly related to the commercial activities of the non-financial entities of the group. ### deleted


### (13) even in liquid contracts , only a limited number of market participants typically act as market makers in commodity markets. when those market participants have to apply position limits they are not in a positon to be as effective as market markers. therefore , an exemption from the position limit regime should be introduced for financial and non-financial counterparties for positions resulting from transactions undertaken to fulfil mandatory liquidity provisions. ### deleted


### (14) the current position limit regime does not recognise the unique characteristics of securitised derivatives. securitised derivatives should therefore be excluded from the position limit regime. ### deleted


### (15) since the entry into force of directive 2014/65/eu , no same commodity derivative contracts have been identified. due to the concept of “same contract” in that directive , the methodology for determining the other months’ limit is detrimental to the venue with the less liquid market when trading venues are competing on commodity derivatives based on the same underlying and sharing the same characteristics. therefore , the reference to “same contract” in directive 2014/65/eu should be deleted. competent authorities should be able to agree that the commodity derivatives traded on their respective trading venues are based on the same underlying and share the same characteristics , in which case the baseline for the other months’ limit on the most liquid market for that commodity derivative can be used as the baseline limit for setting the other months’ position limit for the competing contracts traded on the less liquid venues. ### deleted


### in paragraph 1 , point (j) is replaced by the following: ### deleted


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


### (50a) ‘corporate bonds with make-whole clauses’ means corporate bonds with a clause that obliges the issuer in case of early repayment to return to the investor the principal amount of the bond and the net present value of the coupons the investor would have received in case the bond had not been called;; ### (50a) ‘corporate bonds with make-whole clauses’ means corporate bonds which under certain conditions , ” could be regarded as products that are safer and more simple than other types of bonds , and therefore that may be more eligible for retail clients. such a “make whole clause” can offer some protection to investors against losses in case an issuer opts for early repayment by ensuring that those investors are provided with a payment equal to the net present value of the coupons they would have received if the bond would not have been called. the product governance requirements should therefore no longer apply to corporate bonds with “make-whole clauses” that can clearly be considered as safer and more simple products offering an appropriate level of protection to investors.


### the requirements laid down in the second to fifth subparagraphs of this paragraph shall not apply to corporate bonds with make-whole clauses.; ### the requirements laid down in the second to fifth subparagraphs of this paragraph shall not apply to corporate bonds with make-whole clauses as defined in article 4(1) , point 50a.


### this paragraph shall not apply to corporate bonds with make-whole clauses.; ### this paragraph shall not apply to corporate bonds with make-whole clauses as defined in article 4(1) , point 50a;


### where the agreement to buy or sell a financial instrument is concluded using means of distance communication , the investment firm may provide the information on costs and charges in an electronic format without undue delay after the conclusion of the transaction , provided that all of the following conditions are met: ### where the agreement to buy or sell a financial instrument is concluded using means of distance communication which prevents the prior delivery of the information on costs and charges , the investment firm may provide such information on costs and charges in an electronic format without undue delay after the conclusion of the transaction , provided that all of the following conditions are met:


### the investment firm has given the client the option of delaying the conclusion of the transaction until the client has received the information; ### deleted


### (ii) the client has agreed to receive the information shortly after the conclusion of the transaction.; ### (ii) the client has agreed to receive the information shortly after the conclusion of the transaction and has been provided such information over the phone prior to the conclusion of the transaction.


### the reporting requirement laid down in this paragraph shall however not apply until [date of entry into force of this amending directive + 2 years].; ### deleted


### (1) the requirements laid down in point (c) of article 24(4) , shall not apply to services provided to professional clients except for investment advice and portfolio management. ### deleted


### [...] ### deleted


### (10) in article 58 , paragraph 2 is replaced by the following: ### deleted


### 2. member states shall ensure that investment firms trading in commodity derivatives or emission allowances or derivatives thereof outside a trading venue provide the central competent authority referred to in article 57(6) , on at least a daily basis , with a complete breakdown of their positions taken in commodity derivatives or emission allowances or derivatives thereof traded on a trading venue and economically equivalent otc contracts , as well as of those of their clients and the clients of those clients until the end client is reached , in accordance with article 26 of regulation (eu) no 600/2014 and , where applicable , of article 8 of regulation (eu) no 1227/2011.. ### deleted


### (28) ‘synthetic excess spread’ means the amount committed in the transaction documentation by the originator to cover losses of the referenced portfolio that might occur during the life time of the transaction.; ### (28) ‘synthetic excess spread’ means the amount that , according to the documentation of a synthetic securitisation , is contractually designated by the originator to cover losses of the securitised exposures that might occur during the life time of the transaction.;


### in case of npe securitisations , the requirement of this paragraph may also be fulfilled by the servicer.; ### in case of npe securitisations , the requirement of this paragraph may also be fulfilled by the servicer. servicer of npe securitisations shall meet the requirements established by article 21(8).


### the requirement set out in this paragraph shall not apply to underlying exposures that are non-performing exposures as referred to in article 47a(3) of regulation 575/2013 at the time the originator purchased them from the relevant third party.; ### the requirement set out in this paragraph shall not apply to underlying exposures that are non-performing exposures as referred to in article 47a(3) of regulation 575/2013 at the time the originator purchased them from the relevant third party so long as the originator cannot reasonably be expected to confirm that this requirement was fulfilled.