CELEX: 
Language: en
Date: 2020-09-01 00:00:00
Title: COMMISSION DELEGATED REGULATION (EU) …/... amending Delegated Regulation (EU) No 876/2013 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council as regards changes to the composition, functioning and management of colleges for central counterparties

EXPLANATORY MEMORANDUM
            
            
               1.CONTEXT OF THE DELEGATED ACT
            
            
               On 27 September 2012, the European Securities and Markets Authority (ESMA) published its proposal for draft Regulatory Technical Standards on colleges for central counterparties under Article 18(6) of Regulation (EU) No 648/2012 which were adopted by the Commission, subject to some adjustments, with the Commission Delegated Regulation (EU) No 876/2013 of 28 May 2013 on colleges for central counterparties.
            
            
               Regulation (EU) No 648/2012 was recently amended by Regulation (EU) 2019/2099 of the European Parliament and of the Council of 23 October 2019 as regards the procedures and authorities involved for the authorisation of CCPs and requirements for the recognition of third-country CCPs (EMIR 2.2). Article 18(6) of Regulation (EU) No 648/2012 as amended renewed the mandate to ESMA in cooperation with the ESCB, to develop draft regulatory technical standards specifying the conditions under which the Union currencies are to be considered as the most relevant and the details of the practical arrangements for the functioning of the CCP colleges.
            
            
               In order to ensure Union-wide coherence of the processes within colleges, EMIR 2.2 mandates that the written agreements determining the practical arrangements for the functioning of colleges should be refined and more standardised. To further promote the role of the members of colleges, they should be entitled to contribute to the agenda-setting of college meetings.
            
            
               ESMA’s proposal includes amendments of Commission Delegated Regulation (EU) 876/2013 in order to facilitate a smooth adjustment of CCP colleges to the amended provisions.
            
            
               2.CONSULTATIONS PRIOR TO THE ADOPTION OF THE ACT
            
            
               The proposed amendments to the Delegated regulation are straightforward and limited in scope. Furthermore, they only concern competent authorities and do not impose any additional requirements on market participants. Therefore, with a view to facilitate as soon as possible proper adjustment of CCP colleges to the new provisions of EMIR, in accordance with Article 10(1) of the ESMA Regulation, ESMA has not conducted any open public consultation. However, the Securities and Markets Stakeholder Group of ESMA has been consulted and did not raised any comments.
            
            
               3.LEGAL ELEMENTS OF THE DELEGATED ACT
            
            
               The draft Delegated Act is based on the draft proposal from ESMA and has not been modified.
            
            
               The draft Delegated Act proposes the following amendments to Commission Delegated Regulation (EU) No 876/2013:
            
            
               –A new paragraph 4a is to be introduced in Article 2 of the Delegated Regulation to reflect the changes introduced in Article 18(2) of Regulation (EU) No 648/2012 specifying the procedure under which competent authorities and central banks of issue referred to in points (ca) and (i), respectively, of Article 18(2) of Regulation (EU) No 648/2012 can apply for membership in a college as non-voting members. It specifies that such authorities should apply to the competent authority of the CCP. If the competent authority refuses the request it should provide reasons therefor.
            
            
               –Article 3(4) of the Delegated Regulation is amended to add a reference to the new point (i) of Article 18(2) of Regulation (EU) No 648/2012, i.e. to central banks of issue of currencies other than the most relevant.
            
            
               –A new paragraph 6 is introduced in Article 3 of the Delegated Regulation to reflect the changes introduced in the third sub-paragraph of Article 19(3) of Regulation (EU) No 648/2012 specifying that the ECB has two votes in a college where it is a member pursuant to both point (c) and point (h) of Article 18(2) of Regulation (EU) No 648/2012; and to reflect the mandate in point (i) of the second sub-paragraph of Article 18(5) of Regulation (EU) No 648/2012 regarding voting procedure.
            
            
               –New sub-paragraphs are introduced in Article 4 of the Delegated Regulation to reflect the mandate in points (ii) and (v) of the second sub-paragraph of Article 18(5) of Regulation (EU) No 648/2012 regarding the setting of the agenda of college meetings and the appropriate minimum timeframes for the assessment of the relevant documentation by the college members; and to reflect changes in the last sub-paragraph of Article 18(4) of Regulation (EU) No 648/2012 specifying that college members are entitled to contribute to the setting of the agenda for college meetings. It specifies the timeframes within which agendas for college meetings need to be distributed and finalised. It further details the procedure for recording and distributing minutes of college meetings.
            
            
               –The second sub-paragraph of Article 4(5) of the Delegated Regulation is amended to specify that college members may request a meeting of the college to reflect the mandate in point (iii) of the second sub-paragraph of Article 18(5) of Regulation (EU) No 648/2012 regarding frequency of college meetings.
            
            
               –New paragraph (8) is introduced in Article 4 of the Delegated Regulation to specify that a vote can be taken by a written procedure to reflect the mandate in point (i) of the second sub-paragraph of Article 18(5) of Regulation (EU) No 648/2012 regarding voting procedure.
            
            
               –Article 5(2) of the Delegated Regulation is amended to clarify that the CCP’s competent authority should provide information to college members.
            
            
               –A new point (r) is added to Article 5(2) of the Delegated Regulation to include a reference to outsourcing arrangements to reflect the change introduced in Article 18(1) of Regulation (EU) No 648/2012.
            
         
         
            
               –A new point (s) is added to Article 5(2) of the Delegated Regulation to add reference to changes in the CCP’s participation requirements, clearing membership models and account segregation models.
            
            
               –A new point (t) is added to Article 5(2) of the Delegated Regulation to add reference to changes in the CCP’s default management procedures, and reports on the CCP’s test of its default management procedures conducted in accordance with Article 49(2) of Regulation (EU) No 648/2012.
            
            
               –A new point (u) is added to Article 5(2) of the Delegated Regulation to add reference to changes in the CCP’s payment and settlement arrangements.
            
            
               –A new paragraph (5) is added to Article 5 of the Delegated Regulation to reflect the changes introduced by the mandate in point (vi) of the second sub-paragraph of Article 18(5) of Regulation (EU) No 648/2012 regarding modalities of communication between college members. It specifies that transmission of confidential information should be done via secure means of communication and that college members should always be informed on an equal basis.
            
            
               –A new Article 5a on review and evaluation is added to the Delegated Regulation to reflect changes introduced by the mandate in point (v) of the second sub-paragraph of Article 18(5) of Regulation (EU) No 648/2012. It specifies that the report pursuant to Article 21(4) of Regulation (EU) No 648/2012 should be submitted by the CCP’s competent authority to the college within an appropriate timescale and that college members should be able to raise any points of interest or concern with regard to the review or evaluation.
            
            
               COMMISSION DELEGATED REGULATION (EU) …/...
            
            
               of 1.9.2020
            
            
               amending Delegated Regulation (EU) No 876/2013 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council as regards changes to the composition, functioning and management of colleges for central counterparties
            
            
               (Text with EEA relevance)
            
            
               THE EUROPEAN COMMISSION,
            
            
               Having regard to the Treaty on the Functioning of the European Union,
            
            
               Having regard to Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories
                  1
               , and in particular Article 18(6) thereof,
            
            
               Whereas:
            
            
               (1)Regulation (EU) No 648/2012 has been amended by Regulation (EU) 2019/2099 of the European Parliament and of the Council
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                as regards, among other things, the procedures for the authorisation of CCPs and the authorities involved in such authorisation, and requirements for the recognition of third-country CCPs. Those amendments include changes to the composition, functioning and management of CCP colleges. Those changes should be reflected in Commission Delegated Regulation (EU) No 876/2013
                  3
               .
            
            
               (2)According to Article 18(2), points (ca) and (i), of Regulation (EU) No 648/2012, the CCP’s competent authority is to provide full and detailed reasons in writing if it does not consent to a competent authority or a central bank of issue participating in the college at their request. For reasons of efficiency and legal certainty, it is important that those reasons are given within a reasonable time-limit.
            
            
               (3)In accordance with Article 19(3) of Regulation (EU) No 648/2012,the European Central Bank (“ECB”) has two votes when it is a member of a CCP college both in the framework of its tasks concerning the prudential supervision of credit institutions within the single supervisory mechanism and as the central bank of issue of one of the most relevant Union currencies of the financial instruments cleared. In order to reflect the appropriate representation of the ECB, it should be laid down that in such cases, the ECB should have two participants with voting rights. 
            
            
               (4)It is necessary to ensure an efficient flow of documentation between college members and to give college members enough time to prepare for the college meetings. The CCP’s competent authority should therefore circulate the agenda of the college meeting and all information relevant for the preparation of that meeting well in advance.
            
            
               (5)In order to ensure a proper functioning of colleges and to ensure that a college meets on a regular basis, a meeting of a CCP college should be held at least annually. College members may also request that a meeting of the CCP college be held when they consider such meeting to be necessary.
            
            
               (6)A physical meeting of the college may not always be possible. The CCP college should therefore be able to vote by written procedure where considered appropriate by the CCP’s competent authority or at the request of a college member.
            
            
               (7)Article 18(1) of Regulation (EU) No 648/2012 as amended by Regulation (EU) 2019/2099 attributes new responsibilities to CCP colleges, including for outsourcing arrangements. The CCP’s competent authority should therefore provide college members with information about any changes in a CCP’s outsourcing arrangements for major activities linked to risk management.
            
         
         
            
               (8)In order to enable the college to perform its duties, the CCP’s competent authority should provide college members with information about changes in the CCP’s participation requirements, clearing membership models, account segregation models, changes in the CCP’s default management procedures and changes in the CCP’s payment and settlement arrangements, and with reports on the CCP’s test of its default procedures conducted in accordance with Article 49(2) of Regulation (EU) No 648/2012.
            
            
               (9)In order to protect confidential information and to ensure that college members are informed on an equal basis, confidential information should be exchanged by secure means.
            
            
               (10)In order to provide college members with sufficient time to prepare for the CCP college meeting and to enable them to raise any points of interest or concern regarding the competent authority’s review or evaluation as referred to in Article 21 of Regulation (EU) No 648/2012, the information referred to in paragraph 4 of that Article should be submitted to the college members early enough for them to review and discuss that information in advance.
            
            
               (11)Delegated Regulation (EU) No 876/2013 should therefore be amended accordingly.
            
            
               (12)This Regulation is based on draft regulatory technical standards submitted to the Commission by the European Securities and Markets Authority following consultation of the European System of Central Banks.
            
            
               (13)The amendments are limited in scope and concern only competent authorities without imposing any additional requirements on market participants. In addition, it is important that CCP colleges can adjust as soon as possible to the new requirements introduced by Regulation (EU) 2019/2099. Because of the limited scope and impact of the amendments and the urgency of their application, the European Securities and Markets Authority considered it highly disproportionate to conduct open public consultations on the draft regulatory technical standards on which this Regulation is based, and to analyse the potential related costs and benefits. The European Securities and Markets Authority has however requested the advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council
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               . 
            
            
               HAS ADOPTED THIS REGULATION:
            
            
               Article 1
               Amendments to Delegated Regulation (EU) No 876/2013
            
            
               Delegated Regulation (EU) No 876/2013 is amended as follows:
            
            
               (1)in Article 2, the following paragraph 4a is inserted:
            
            
               ‘4a.
                     Competent authorities as referred to in Article 18(2), point (ca), of Regulation (EU) No 648/2012, and central banks of issue as referred to in Article 18(2), point (i), of that Regulation, that wish to participate in the college shall submit a reasoned request to the CCP’s competent authority. The CCP’s competent authority shall, within 20 calendar days of the receipt of the request, either provide the requesting competent authority or central bank with a copy of the written agreement for review and approval, or substantiating in writing why the request has been rejected.’;
            
            
               (2)in Article 3, paragraph 4 is replaced by the following:
            
            
               ‘4.
                     Where an authority has the right to participate in the college under more than one of points (c) to (i) of Article 18(2) of Regulation (EU) No 648/2012, it may nominate additional participants who shall have no voting rights.’;
            
            
               (3)in Article 3, the following paragraph 6 is added:
            
            
               ‘6.
                     By way of derogation from paragraphs 4 and 5, the ECB may nominate two participants with voting rights where it is a member of the college pursuant to both points (c) and (h) of Article 18(2) of Regulation (EU) No 648/2012.’;
            
            
               (4)in Article 4(4), the following sub-paragraphs are added:
            
            
               ‘For the purposes of point (b), the CCP’s competent authority shall circulate a draft agenda for each meeting of the college, other than for meetings called in emergency situations, well in advance of each meeting, in order to enable the members of the college to contribute to the setting of the agenda, in particular by adding points to the agenda.
            
            
               The agenda shall be finalised and distributed by the CCP’s competent authority to college members sufficiently in advance of a meeting of the college. The CCP’s competent authority and other college members shall distribute any information to be considered at a meeting of the college well in advance of the meeting.
            
            
               For the purposes of point (c), the CCP’s competent authority shall distribute the minutes of meetings to college members as soon as practicable following the meetings and give them sufficient time to comment.’;
            
            
               (5)in Article 4(5), the following sub-paragraph is added:
            
         
         
            
               ‘College members may request that the CCP’s competent authority holds a meeting of the college. The CCP’s competent authority shall duly provide reasons for any rejection of such request.’;
            
            
               (6)in Article 4, the following paragraph 8 is added:
            
            
               ‘8.
                     The college may vote by written procedure where proposed by the CCP’s competent authority or at the request of a college member.’;
            
            
               (7)Article 5(2) is amended as follows:
            
            
               (a)the introductory sentence is replaced by the following:
            
            
               ‘The CCP’s competent authority shall at least provide the following information to the college members;’;
            
            
               (b)the following points are added:
            
            
               ‘(r)changes in any outsourcing arrangements of the CCP for major activities linked to risk management;
            
            
               (s)changes in the participation requirements, clearing membership models and account segregation models of the CCP;
            
            
               (t)changes in the default procedures of the CCP, and reports on the test of the CCP’s default procedures conducted by the CCP in accordance with Article 49(2) of Regulation (EU) No 648/2012;
            
            
               (u)changes in the payment and settlement arrangements of the CCP.’;
            
            
               (8)in Article 5, the following paragraph 6 is added:
            
            
               ‘6.
                     College members shall exchange confidential information by secure means of communication and on an equal basis.’;
            
            
               (9)the following Article 5a is inserted:
            
            
               ‘Article 5a
               College input on review and evaluation
            
            
               1.
                     The information referred to in Article 21(4) of Regulation (EU) No 648/2012 shall be submitted to the college members in time for them to review and discuss that information before the next college meeting.
            
            
               2.
                     College members may raise any point of interest or of concern they may have with regard to the review or evaluation by the CCP’s competent authority referred to in Article 21 of Regulation (EU) No 648/2012. The CCP’s competent authority shall take such points of interest or of concern into account to the extent possible and shall inform the college member who raised them how they were taken into account.’.
            
            
               Article 2
               Entry into force
            
            
               This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. 
            
            
               This Regulation shall be binding in its entirety and directly applicable in all Member States.
            
         
         
            
               Done at Brussels, 1.9.2020
            
            
               
                     For the Commission
               
               
                     The President
                     Ursula VON DER LEYEN
               
            
         
         
            
                  
                     (1)
                  
                        OJ L 201, 27.7.2012, p. 1.
               
               
                  
                     (2)
                  
                        Regulation (EU) 2019/2099 of the European Parliament and of the Council of 23 October 2019 amending Regulation (EU) No 648/2012 as regards the procedures and authorities involved for the authorisation of CCPs and requirements for the recognition of third-country CCPs (OJ L 322, 12.12.2019, p. 1).
               
               
                  
                     (3)
                  
                        Commission Delegated Regulation (EU) No 876/2013 of 28 May 2013 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on colleges for central counterparties (OJ L 244, 13.9.2013, p. 19).
               
               
                  
                     (4)
                  
                        Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331 15.12.2010, p. 84).