A4-0009/95

Proposal for a European Parliament and Council Directive amending Council Directive 89/647/EEC with respect to the supervisory recognition of contracts for novation and netting agreements ('Contractual Netting') (COM(94)0105 - C3- 0242/94 - 94/0099(COD))

The proposal was approved with the following amendments:

(Amendment 1)

Recital 3a (new)

>Text following EP vote>

Whereas the effect of the rules envisaged for the recognition of netting will be to reduce the level of banks' compulsory cover through their own resources;

(Amendment 2)

Recital 4

>Original text>

Whereas for credit institutions incorporated in the Member States, only an amendment of Directive 89/647/EEC can open a similar possibility for the supervisory recognition of bilateral netting and thereby provide them with equal conditions of competition; whereas the rules are both well balanced and suited to further reinforce the application of prudential supervisory measures to the sector of credit institutions;

>Text following EP vote>

Whereas, however, for credit institutions incorporated in the Member States, only an amendment of Directive 89/647/EEC can open a similar possibility for the supervisory recognition of bilateral netting and thereby provide them with equal conditions of competition; whereas the rules are both well balanced and suited to further reinforce the application of prudential supervisory measures to the sector of credit institutions;

(Amendment 3)

Recital 5a (new)

>Text following EP vote>

Whereas Member States in which the validity of 'contractual netting' is not yet legally recognized should introduce the provisions needed to ensure such recognition as soon as possible;

(Amendment 4)

Annex II(3)(a), introductory phrase

>Original text>

The supervisory authorities may recognize as risk reducing the following types of contracts for novation and netting agreements:

>Text following EP vote>

The supervisory authorities of the Member States responsible for the credit institutions and investment firms involved in the operation may recognize as risk reducing the following types of contracts for novation and netting agreements:

(Amendment 5)

Annex II(3)(a), second paragraph (new)

>Text following EP vote>

'Counterparties' means not only credit institutions but also all entities which are legally able to conclude contractual netting agreements under the law of the Member State of origin.

(Amendment 6)

Annex II(3)(b), first paragraph, introductory phrase

>Original text>

The supervisory authorities may recognize as risk reducing a contract for novation or a netting agreement under the following conditions only:

>Text following EP vote>

The supervisory authorities of the Member States responsible for the credit institutions and investment firms involved in the operation may recognize as risk reducing a contract for novation or a netting agreement under the following conditions only:

(Amendment 7)

Annex II(3)(b), first paragraph (ii), introductory phrase

>Original text>

(ii) the credit institution has furnished to the supervisory authorities written and reasoned legal opinions that, in the event of a legal challenge, the relevant Courts and administrative authorities would find that in the cases described under (i) the claims and obligations of the credit institution were confined to the net value as described in (b)(i) above under:

>Text following EP vote>

(ii) the credit institution has arranged to show clearly and precisely to the supervisory authorities of its own Member State the list of written and reasoned legal opinions available to the authority that, in the event of a legal challenge, the relevant Courts and administrative authorities would find that in the cases described under (i) the claims and obligations of the credit institution were confined to the net value as described in (b)(i) above under:

(Amendment 8)

Annex II(3)(b), first paragraph a (new)

>Text following EP vote>

The relevant supervisory authorities may accept reasoned legal opinions drawn up by group or types of novation contracts and other netting agreements.

(Amendment 9)

Annex II(3)(b), fourth paragraph

>Original text>

With respect to a smooth functioning of the single market, Member States are obliged to strive for a uniform assessment of the agreements for contractual netting by their competent authorities.

>Text following EP vote>

With respect to a smooth functioning of the single market, Member States are obliged to strive for a uniform assessment of the agreements for contractual netting by their competent authorities. Such action by the competent authorities must not be responsible for distorting competition.

Legislative resolution embodying Parliament's opinion on the proposal for a European Parliament and Council Directive amending Council Directive 89/647/EEC with respect to the supervisory recognition of contracts for novation and netting agreements ('Contractual Netting') (COM(94)0105 - C3-0242/94 - 94/0099(COD))

(Codecision procedure: first reading)

The European Parliament,

- having regard to the Commission proposal to Parliament and the Council, COM(94)0105 - 94/0099(COD) ((OJ C 142, 25.5.1994, p. 8.)),

- having regard to Articles 189b(2) and 57(2) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C3-0242/94),

- having regard to Rule 58 of its Rules of Procedure,

- having regard to the report of the Committee on Legal Affairs and Citizens' Rights and the opinion of the Committee on Economic and Monetary Affairs and Industrial Policy (A4-0009/95),

1. Approves the Commission proposal, subject to Parliament's amendments;

2. Calls on the Commission to alter its proposal accordingly, pursuant to Article 189a(2) of the EC Treaty;

3. Calls on the Council to incorporate Parliament's amendments in the common position that it adopts in accordance with Article 189b(2) of the EC Treaty;

4. Should the Council intend to depart from the text approved by Parliament, calls on the Council to notify Parliament and requests that the conciliation procedure be initiated;

5. Points out that the Commission is required to submit to Parliament any modification it may intend to make to its proposal as amended by Parliament;

6. Instructs its President to forward this opinion to the Council and Commission.