Legal provisions of COM(2021)727 - Amending regulation 600/2014 on enhancing market data transparency, removing obstacles, optimising trading obligations and prohibiting payments for forwarding client orders

Please note

This page contains a limited version of this dossier in the EU Monitor.

dossier COM(2021)727 - Amending regulation 600/2014 on enhancing market data transparency, removing obstacles, optimising trading obligations and ...
document COM(2021)727 EN
date February 28, 2024

Contents

Article 1 - Amendments to Regulation (EU) No 600/2014

(1) Article 1 is amended as follows:

(a)in paragraph 1, the following point (i) is added:

(h)    the scope of multilateral trading.’;

(b)paragraph 3 is replaced by the following:

‘3.    Title V of this Regulation shall also apply to all financial counterparties referred to in Article 4a(1), second subparagraph, of Regulation (EU) No 648/2012 and to all non-financial counterparties referred to in Article 10(1), second subparagraph, of that Regulation.’;

(c)the following paragraph 7a is inserted:

‘7a.    All multilateral systems shall operate either in accordance with the provisions of Title II of Directive 2014/65/EU concerning MTFs or OTFs, or the provisions of Title III of that Directive concerning regulated markets.

All investment firms which, on an organised, frequent, systematic and substantial basis, deal on own account when executing client orders outside a regulated market, an MTF or an OTF shall operate in accordance with Title III of this Regulation.

Without prejudice to Articles 23 and 28, all investment firms concluding transactions in financial instruments which are not concluded on multilateral systems or systematic internalisers shall comply with Articles 20, 21, 22, 22a, 22b and 22c, of this Regulation.’;

(2) in Article 2, paragraph 1 is amended as follows:

(a)point (11) is replaced by the following:

‘(11)    ‘multilateral system’ means any system or facility in which multiple third-party buying and selling trading interest in financial instruments are able to interact in the system;’;

(b)the following point (34a) is inserted:

‘(34a) ‘market data contributor’ means a trading venue, an investment firm, including systematic internalisers, or an APA;’;

(c)point (35) is replaced by the following:

‘(35)    ‘consolidated tape provider’ or ‘CTP’ means a person authorised in accordance with Title IVa, Chapter 1 of this Regulation to provide the service of collecting market data for shares, ETFs, bonds or derivatives, from market data contributors, and of consolidating those data into a continuous electronic live data stream providing core market data per share, ETF, bond or derivatives and of providing them to user of market data;’;

(d)the following points (36b) and (36c) are inserted:

(36b)    ‘core market data’ means:

(a)all of the following data on equities:

(i)the best bids and offers with corresponding volumes;

(ii)the transaction price and volume executed at the stated price;

(iii)the intra-day auction information;

(iv)the end-of-day auction information;

(v)the market identifier code identifying the execution venue;

(vi)the standardised instrument identifier that applies across venues;

(vii)the timestamp information on all of the following:

- the time of execution of the trade;

- the time of publication of the trade;

- the receipt of market data from the market data contributors;

- the receipt of market data by the consolidated tape provider;

- the dissemination of consolidated market data to subscribers;

(viii)the trading protocols and the applicable waivers or deferrals;

(b)all of the following data on non-equities:

(i)the transaction price and quantity/size executed at the stated price;

(ii)the market identifier code identifying the execution venue;

(iii)standardised instrument identifier that applies across venues;

(iv)the timestamp information on all of the following:

- the time of execution of the trade;

- the time of publication of the trade;

- the receipt of market data from the market data contributors;

- the receipt of market data at the consolidator’s aggregation/consolidation mechanism;

- the dissemination of consolidated market data to subscribers;

(v)the trading protocols and the applicable waivers or deferrals;

(36c)    ‘regulatory data’ means data related to the status of systems matching orders in financial instruments, including information about circuit breakers, trading halts, and opening and closing prices of those financial instruments;’

(3) Article 4 is amended as follows:

(a)paragraph 1 is amended as follows:

(i)point (a) is replaced by the following:

‘(a)systems matching orders that are larger than twice the standard market size and that are based on a trading methodology by which the price of the financial instruments referred to in Article 3(1) is derived from either of the following:

(i)the price of those financial instruments at the trading venues where those financial instruments were first admitted to trading;

(ii)the price of those financial instruments at the most relevant market in terms of liquidity where that price is widely published and is regarded by market participants as a reliable reference price;

(iii)the consolidated tape for shares or ETFs.’;

(ii)the following subparagraph is added:

‘For the purposes of point (a), the continued use of that waiver shall be subject to the conditions set out in Article 5.’;

(b)in paragraph 2, the first subparagraph is replaced by the following:

‘The reference price referred to in paragraph 1, point (a) shall be established by obtaining either of the following:

(a)the midpoint within the current bid and offer prices of any of the following:

(i)the trading venue where those financial instruments were first admitted to trading;

(ii)the most relevant market in terms of liquidity;

(iii)the consolidated tape for shares or ETFs;

(b)when the price referred to in point (a) is not available, the opening or closing price of the relevant trading session.’;

(4) Article 5 is amended as follows:

(a)the title is replaced by the following:

‘Article 5
Volume cap’;

(b)paragraph 1 is replaced by the following:

‘1.    Trading venues shall suspend their use of the waivers referred to in Article 4(1), point (a), and 4(1), point (b)(i) where the percentage of volume traded in the Union in a financial instrument carried out under those waivers exceeds 7% of the total volume traded in that financial instrument in the Union. Trading venues shall base their decision to suspend the use of those waivers on the data published by ESMA in accordance with paragraph 4, and shall take such decision within two working days after this publication of those data and for a period of six months.’;

(c)paragraph 2 and 3 are deleted;

(d)paragraph 4 is replaced by the following:

‘4.    ESMA shall publish within five working days of the end of each calendar month all of the following data:

(a)the total volume of Union trading per financial instrument in the previous 12 months;

(b)the percentage of trading in a financial instrument carried out across the Union under the waivers referred to in Article 4(1), point (a), and Article 4(1), point (b)(i);

(c)the methodology that is used to derive the percentage referred to in point (b).’;

(e)paragraph 5 is deleted;

(f)paragraph 7 is replaced by the following:

‘7.    To ensure a reliable basis for monitoring the trading taking place under the waivers referred to in Article 4(1), point (a), and Article 4(1), point (b)(i) and for determining whether the limits referred to in paragraph 1 have been exceeded, operators of trading venues shall have in place systems and procedures to enable the identification of all trades which have taken place on their venue under those waivers.’;

(5) Article 9 is amended as follows:

(a)in paragraph 1, point (b) is deleted;

(b)in paragraph 5, point (d) is deleted;

(6) Article 11 is amended as follows:

(a)paragraph 1 is amended as follows:

(i)the first subparagraph is replaced by the following:

‘Based on the deferral regime as set out in paragraph 4, competent authorities shall authorise market operators and investment firms operating a trading venue to defer the publication of the price of transactions until the end of the trading day, or the volume of transactions for a maximum of two weeks.’;

(ii)in the second subparagraph, point (c) is deleted;

(b)paragraph 3 is replaced by the following:

‘3.    Competent authorities may, when authorising a deferred publication as referred to in paragraph 1 with regard to transactions in sovereign debt, allow market operators and investment firms operating a trading venue: 

(a)to allow the omission of the publication of the volume of an individual transaction during an extended time period of deferral; or

(b)to publish in an aggregated form several transactions in sovereign debt for an indefinite period of time.’

(c)paragraph 4 is amended as follows:

(i)the first subparagraph is amended as follows:

point (c) is replaced by the following:

‘(c)    the transactions eligible for price or volume deferral, and the transactions for which competent authorities shall authorise market operators and investment firms operating a trading venue to provide for deferred publication of the volume or price for one of the following durations:

(i)15 minutes;

(ii)end of trading day;

(iii)two weeks.’;

(ii)the following subparagraph is inserted after the first subparagraph:

‘For the purposes of the first subparagraph, point (c), ESMA shall specify the buckets for which the deferral period shall apply across the Union by using the following criteria:

(a)the liquidity determination;

(b)the size of the transaction, in particular transactions in illiquid markets or transactions that are large in scale;

(c)for bonds, the classification of the bond as investment grade or high yield.’;

(7) in Article 13, the following paragraph 3 is added:

‘3.    ESMA shall develop draft regulatory technical standards to specify the content, format and terminology of the reasonable commercial basis information that trading venues, APAs, CTPs and systematic internalisers have to make available to the public.

ESMA shall submit those draft regulatory technical standards to the Commission by [OP please insert nine months after entry into force].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(8) Article 14 is amended as follows:

(a)paragraphs 2 and 3 are replaced by the following:

‘2.    This Article and Articles 15, 16 and 17 shall apply to systematic internalisers when they deal in sizes up to twice the standard market size. Systematic internalisers shall not be subject to this Article and Articles 15, 16 and 17 when they deal in sizes above twice the standard market size.

3. Systematic internalisers are allowed to quote any size. The minimum quoting size shall be at least the equivalent of twice the standard market size of a share, depositary receipt, ETF, certificate, or other financial instrument that is similar to those financial instruments and that is traded on a trading venue. For a particular share, depository receipt, ETF, certificate or other financial instrument that is similar to those financial instruments and that is traded on a trading venue, each quote shall include a firm bid and offer price, or firm bid and offer prices for a size or sizes which could be up to twice the standard market size for the class of shares, depositary receipts, ETFs, certificates or financial instruments that are similar to those financial instruments, to which the financial instrument belongs. The price or prices shall reflect the prevailing market conditions for that share, depositary receipt, ETF, certificate or financial instrument that is similar to those financial instruments.’;

(b)the following paragraph 6a is inserted:

‘6a.    Systematic internalisers shall not match orders at the mid-point within the current bid and offer prices.’;

(9) Article 17a is replaced by the following:

‘Article 17a
Tick sizes

1. Systematic internalisers’ quotes, price improvements on those quotes and execution prices shall comply with the tick sizes set in accordance with Article 49 of Directive 2014/65/EU.

2. The application of the tick sizes set in accordance with Article 49 of Directive 2014/65/EU shall not prevent systematic internalisers from matching orders large in scale at mid‐point within the current bid and offer prices. Matching orders at mid-point within the current bid and offer prices below large in scale but above twice the standard market size shall be allowed in so far as those tick sizes are complied with.’;

(10) the following Articles 22a, 22b and 22c are inserted:

‘Article 22a
Provision of market data to the CTP

1. Market data contributors shall, with regard to shares, ETFs and bonds that are traded on a trading venue, and with regard to OTC derivatives as defined in Article 2(7) of Regulation (EU) No 648/2012 that are subject to the clearing obligation as referred to in Article 4 of that Regulation, provide the CTP with all the market data as set out in Article 22b(2) as needed for the CTP to be operational. Those market data shall be provided in a harmonised format, through a high quality transmission protocol, and as close to real-time as is technically possible.

2. Each CTP shall be free to choose, from among the types of connection that the market data contributors offer to other users, which connection it wishes to use for the provision of those data. Market data contributors shall not receive any remuneration for providing the connectivity other than the revenue sharing for shares, as specified in the conditions for appointment of the CTP in the selection process laid down in 27da.

3. Market data contributors shall, with regard to transactions in the instruments referred to in paragraph 1 that are concluded by investment firms outside a trading venue, provide the CTP with the market data concerning those transactions either directly or through an APA.

4. Market data contributors shall not receive any remuneration for the market data provided other than the revenue sharing as referred to in Article 27da(2), point (c).

5. Market data contributors shall provide the information with regard to waivers and deferrals as laid down in Articles 4, 7, 11, 14, 20 and 21.

Article 22 - b Market data quality

1. The Commission shall set up an expert stakeholder group by [OP add 3 months as of entry into force] to provide advice on the quality and the substance of market data, the common interpretation of market data and the quality of the transmission protocol referred to in Article 22a(1). The expert stakeholder group shall provide advice on a yearly basis. That advice shall be made public.

2. The Commission shall be empowered to adopt delegated acts in accordance with Article 50 to specify the quality and the substance of the market data and the quality of the transmission protocol.

Those delegated acts shall in particular specify all of the following:

(a)the market data, contributors need to provide to the CTP in order to produce the core market data needed for the CTP to be operational, including the substance and the format of those market data;

(b)what constitutes core market data referred to in Article 2(1)(36b) and the regulatory data referred to in Article 2(1)(36c).

For the purposes of the first subparagraph, the Commission shall take into account the advice from ESMA and from the technical expert group established in accordance with paragraph 2, international developments, and standards agreed at Union or international level. The Commission shall ensure that the delegated acts adopted take into account the reporting requirements laid down in Articles 3, 6, 8, 10, 14, 18, 20, 21 and 27g.

Article 22 - c Synchronisation of business clocks

1. Trading venues and their members or participants, systematic internalisers, APAs and CTPs shall synchronise their business clocks to record the date and time of any reportable event.

2. ESMA shall, in accordance with international standards, develop draft regulatory technical standards to specify the level of accuracy to which clocks are to be synchronised.

ESMA shall submit those draft regulatory technical standards to the Commission by [OP insert a date 6 months as of entry into force].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(11) in Article 23, paragraph 1 is replaced by the following:

‘1.    An investment firm shall ensure that the trades it undertakes in shares with an EEA International Securities Identification Number (ISIN) shall take place on a regulated market, MTF, systematic internaliser or a third-country trading venue assessed as equivalent in accordance with Article 25(4), point (a) of Directive 2014/65/EU, as appropriate, unless :

(a)those shares are traded on a third-country venue in the local currency;; or

(b)those trades are carried out between eligible counterparties, between professional counterparties or between eligible and professional counterparties and do not contribute to the price discovery process.

ESMA shall publish a list on its website containing the shares with an EEA ISIN subject to the share trading obligation and shall update that list regularly.’;

(12) Article 26(9) is amended as follows:

(a)the following point (j) is added:

‘(j)    the date by which transactions are to be reported.’;

(b)the following subparagraph is inserted after the first subparagraph:

‘When drafting those regulatory technical standards, ESMA shall take into account international developments and standards agreed upon at Union or global level, and their consistency with the reporting requirements laid down in Regulation (EU) 2019/834 and Regulation (EU) 2015/2365.’;

(13) in Article 26, the following paragraph 11 is added:

‘11.    By [OP insert date 2 years as of date of publication], ESMA shall submit to the Commission a report assessing the feasibility of more integration in transaction reporting and streamlining of data flows under Article 26 of this Regulation to:

(a)reduce duplicative or inconsistent requirements for transaction data reporting, and in particular duplicative or inconsistent requirements laid down in this Regulation and Regulation (EU) 2019/834 of the European Parliament and of the Council*1 and Regulation (EU) 2015/2365;

(b)improve data standardisation and efficient sharing and use of data reported within any Union reporting framework by any relevant competent authority, both Union and national.

When preparing the report, ESMA shall, where relevant, work in close cooperation with the other bodies of the European System of Financial Supervision and the European Central Bank.

________________________________________________________

*1    Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories (OJ L 141, 28.5.2019, p. 42)’;

(14) Article 27(3) is amended as follows:

(a)the following point (c) is added:

‘(c)    the date by which reference data are to be reported’.

(b)the following subparagraph is inserted after the first subparagraph:

‘When drafting those draft regulatory technical standards, ESMA shall take into account international developments and standards agreed upon at Union or global level, and the consistency of those draft regulatory technical standards with the reporting requirements laid down in Regulation (EU) 2019/834 and Regulation (EU) 2015/2365.’;

(15) the following Article 27da is inserted:

‘Article 27da
Selection process for the authorisation of a single consolidated tape provider for each asset class

1. By [OP insert date 3 months as of entry into force], ESMA shall organise a selection procedure for the appointment of the CTP for a five year term. ESMA shall organise a separate selection procedure for each of the following asset classes: shares, exchange traded funds, bonds and derivatives (or relevant subclasses of derivatives).

2. For each of the asset classes referred to in paragraph 1, ESMA shall assess the applications on the basis of the following criteria:

(a)the technical ability of the applicants to provide a resilient consolidated tape throughout the Union;

(b)the capacity of the applicants to comply with the organisational requirements laid down in Article 27h;

(c)the governance structure of the applicants;

(d)the speed at which the applicants can disseminate core market data;

(e)the capacity of the applicants to disseminate good quality data;

(f)the total expenditure needed by the applicants to develop the consolidated tape and the costs of operating the consolidated tape on an ongoing basis;

(g)the level of the fees that the applicant intends to charge to the different types of users of the core market data;

(h)the possibility of the applicants to use modern interface technologies for the provision of the core market data and for connectivity;

(i)the storage medium the applicants will use for the storage of historic data;

(j)the protocols the applicants will use to prevent and address outages.

3. The first selection procedure organised for shares shall only invite bids for the provision of a consolidated tape containing post trade data. Prior to subsequent selection procedures, ESMA shall assess market demand and revenue impacts on regulated markets and based on that assessment, report to the Commission on the opportunity of adding best bids and offers and corresponding volumes to the tape. Based on that report and on the experience gained further to the first selection procedure, the Commission is empowered to adopt a delegated act specifying the appropriate level of pre-trade data to be contributed to the CTP.

4. The selection of the CTP for shares shall, in addition to the criteria in paragraph 2, consider the revenue participation scheme, and in particular the formula, applicable to regulated markets that are market data contributors. ESMA shall, when considering the competing tenders, select the CTP for shares that offers the revenue participation scheme that provides regulated markets, in particular smaller regulated markets, with the highest amount of revenue that remains for distribution once deducted operating costs and a reasonable margin. This revenue shall be distributed in accordance with Article 27h(1)(c), and in a manner commensurate to the market data contributed according to Article 22a.

5. ESMA shall adopt a fully reasoned decision selecting and authorising the entities operating the consolidated tapes within 3 months as of initiation of the selection procedure referred to in paragraph 2. Such reasoned decision shall specify the conditions under which the CTPs shall operate, and in particular the level of fees referred to in paragraph 2, point (g) and for shares the level of the participation referred to in paragraph 3, in particular for smaller regulated markets.

6. The selected CTPs shall comply at all times with the organisational requirements set out in Article 27h and with the conditions set out in the decision of ESMA authorising the CTP referred to in paragraph 3. A CTP that is no longer able to comply with those requirements and conditions, including the requirements and conditions on system disruptions and intrusions, shall inform ESMA thereof without undue delay.

7. The withdrawal of the authorisation referred to in Article 27e shall only take effect as of the moment that a new CTP has been selected and authorised in accordance with paragraphs 1 to 4. 

(16) Article 27h is replaced by the following:

‘Article 27h

Organisational requirements for consolidated tape providers

1. CTPs shall, in accordance with the conditions for authorisation referred to in Article 27da:

(a)collect all market data provided through contributions in relation to the asset class for which they are authorised;

(b)collect monthly subscription fees from users;

(c)in the case of market data concerning shares, redistribute part of their revenues for the purposes of covering the cost related to mandatory contribution and of ensuring a fair level of participation for regulated markets, and in particular smaller regulated markets, in the revenue generated by the consolidated tape, in accordance with Article 27da(4);

(d)make consolidated core market data, for the provision of which the CTP is selected in accordance with Article 27da, available in accordance with the data quality requirements set out in Article 22b to users into a continuous electronic data stream on non-discriminatory terms as close to real time as technically possible;

(e)ensure that the publication of the core market data complies with the applicable waivers and deferrals in Articles 4, 7, 11, 14, 20 and 21;

(f)ensure that the consolidated core market data is easily accessible, machine readable and utilisable for all users, including retail investors.

For the purpose of establishing the participation in point (c), the revenue of the CTP shall be allocated among regulated markets according to a formula that reflects the proportion of pre-trade transparent liquidity in shares displayed by a regulated market relative to the average daily turnover in these shares in the Union.

2. CTPs shall adopt and publish on their website service level standards covering all of the following:

(a)an inventory of market data contributors from whom market data are received;

(b)modes and speed of delivery of consolidated market data to users;

(c)measures taken to ensure operational continuity in the provision of consolidated market data.

3. CTPs shall have sound security mechanisms in place designed to guarantee the security of the means of transfer of market data between the market data contributors and the CTP and between the CTP and the users and to minimise the risk of data corruption and unauthorised access. CTPs shall maintain adequate resources and have back-up facilities in place to offer and maintain its services at all times.

4. After 12 months of full operation of the CTP for shares, ESMA shall provide the Commission with a motivated opinion on the effectiveness and fairness of the level of participation of regulated markets in the revenues generated by the CTP as set out in accordance with the second subparagraph of paragraph 1. The Commission may request ESMA to provide further opinions, where necessary or appropriate. The Commission shall be empowered to adopt a delegated act in accordance with Article 50 to revise the allocation key for the revenue redistribution, where appropriate.’;

(17) the following Article 27ha is inserted:

‘Article 27ha
Reporting obligations for consolidated tape providers

1. CTPs shall, at the end of each quarter, publish on their website, which shall be accessible for free, performance statistics and incident reports relating to data quality and systems.

2. 2. ESMA shall develop draft regulatory technical standards to specify the content, timing, format and terminology of the reporting obligation.

ESMA shall submit those draft regulatory technical standards to the Commission by [OP please insert nine months after entry into force].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

3. CTPs shall keep and preserve records relating to their business for a period of no less than five years. Information concerning the first two years shall be kept in an easily accessible place, and the CTP shall promptly provide ESMA with such records upon request.’;

(18) in Article 28(1), paragraph 1, the introductory wording is replaced by the following:

‘1.    Financial counterparties that meet the conditions set out in Article 4a(1), second subparagraph, of Regulation (EU) No 648/2012, and non-financial counterparties that meet the conditions set out in Article 10(1), second subparagraph, of that Regulation, shall conclude transactions, which are neither intragroup transactions as defined in Article 3 of that Regulation nor transactions covered by the transitional provisions laid down in Article 89 of that Regulation, with other such financial counterparties or other such non-financial counterparties in derivatives pertaining to a class of derivatives that has been declared subject to the trading obligation in accordance with the procedure set out in Article 32 of this Regulation and listed in the register referred to in Article 34 of this Regulation only on:’;

(19) in Article 32, the following paragraphs 7, 8 and 9 are added:

‘7.    Where ESMA considers that the suspension of the clearing obligation as referred to in Article 6a of Regulation (EU) No 648/2012 is a material change in the criteria for the trading obligation to take effect, as referred to in paragraph 5 of this Article, ESMA may request the Commission to suspend the trading obligation laid down in Article 28(1) and (2) of this Regulation for the same classes of OTC derivatives that are subject to the request to suspend the clearing obligation.

8. The request referred to in paragraph 7 shall not be made public.

9. After having received the request referred to in paragraph 7, the Commission shall, without undue delay and, on the basis of the reasons and evidence provided by ESMA, do either of the following:

(a)in an implementing act suspend the trading obligation for the classes of OTC derivatives that are subject to the request to suspend the clearing obligation;

(b)reject the requested suspension.

For the purposes of point (b), the Commission shall inform ESMA of the reasons why it rejected the requested suspension. The Commission shall immediately inform the European Parliament and the Council of that rejection and forward them the reasons provided to ESMA. The information provided to the European Parliament and the Council regarding the rejection and the reasons for that rejection shall not be made public.’;

(20) the following Article 32a is inserted:

‘Article 32a
Stand-alone suspension of the trading obligation

1. At the request of the competent authority of a Member State, the Commission may suspend the derivatives trading obligation with respect to certain investment firms in accordance with the procedure referred to in Article 51 and after having consulted ESMA. The competent authority shall indicate why it considers that the conditions for a suspension are met. In particular, the competent authority shall demonstrate that an investment firm within its jurisdiction:

(a)regularly receives requests for a quote for the derivatives subject to the derivatives trading obligation;

(b)from a non-EEA counterpart which has no active membership on a EU trading venue that offers trading in the derivative subject to the trading obligation; and

(c)regularly acts as a market maker in the derivative subject to the derivatives trading obligation.

2. When assessing whether to suspend the trading obligation in accordance with paragraph 1, the Commission shall take into account whether such suspension of the trading obligation would have a distortive effect on the clearing obligation laid down in Article 4(1) of Regulation (EU) No 648/2012.

3. The implementing act referred to in paragraph 1 shall be accompanied by the evidence presented by the competent authority requesting the suspension.

4. The implementing act referred to in paragraph 1 shall be communicated to ESMA and shall be published in the ESMA register referred to in Article 34 of this Regulation.

5. The Commission shall regularly review whether the grounds for the suspension of the trading obligation continue to apply.’;

(21) Article 35 is amended as follows:

(a)in paragraph 1, first subparagraph, the introductory wording is replaced by the following:

‘1.    Without prejudice to Article 7 of Regulation (EU) No 648/2012, a CCP shall accept to clear financial instruments on a non-discriminatory and transparent basis, including as regards collateral requirements and fees relating to access, regardless of the trading venue on which a transaction is executed.

The requirement in the first subparagraph shall not apply to exchange-traded derivatives.

The CCP shall in particular ensure that a trading venue has the right to non-discriminatory treatment of contracts traded on that trading venue in terms of:’;

(b)paragraph 3 is replaced by the following:

‘3.    The CCP shall provide a written response to the trading venue either within three months of permitting access, on condition that a relevant competent authority has granted access pursuant to paragraph 4, or within three months of denying access. The CCP may deny a request for access only under the conditions specified in paragraph 6(a). Where a CCP denies access, it shall provide full reasons in its response and inform its competent authority in writing of the decision. Where the trading venue is established in a Member State other than the one of the CCP, the CCP shall also provide such notification and reasoning to the competent authority of that trading venue. The CCP shall provide access within three months of providing a positive response to the access request.’;

(22) Article 36 is amended as follows:

(a)in paragraph 1, the first subparagraph is replaced by the following:

‘Without prejudice to Article 8 of Regulation (EU) No 648/2012, a trading venue shall, upon request, provide trade feeds on a non-discriminatory and transparent basis, including as regards fees related to access, to any CCP authorised or recognised by that Regulation that wishes to clear transactions in financial instruments that are concluded on that trading venue. That requirement shall not apply to:

(a)any derivative contract that is already subject to the access obligations under Article 8 of Regulation (EU) No 648/2012;

(b)exchange-traded derivatives.’;

(b)paragraph 3 is replaced by the following:

‘3.    The trading venue shall provide a written response to the CCP within three months either permitting access, under the condition that the relevant competent authority has granted access pursuant to paragraph 4, or denying access. The trading venue may deny access only under the conditions specified pursuant to paragraph 6, point (a). When access is denied, the trading venue shall provide full reasons in its written response and forward that written response to its competent authority. Where the CCP is established in a different Member State than the trading venue, the trading venue shall also forward that written response to the competent authority of the CCP. The trading venue shall provide access within three months of providing a positive response to the access request.’;

(c)paragraph 5 is deleted;

(23) in Article 38, paragraph 1 is replaced by the following:

‘1.    A trading venue established in a third country may request access to a CCP established in the Union only if the Commission has adopted a decision in accordance with Article 28(4) relating to that third country.

A CCP established in a third country may request access to a trading venue in the Union subject to that CCP being recognised under Article 25 of Regulation (EU) No 648/2012.

CCPs and trading venues established in third countries shall only be permitted to make use of the access rights referred to in Articles 35 and 36 with regard to financial instruments covered by those Articles and provided that the Commission has adopted a decision in accordance with paragraph 3 of this Article, determining that the legal and supervisory framework of the third country is considered to provide for an effective equivalent system for permitting CCPs and trading venues authorised under foreign regimes access to CCPs and trading venues established in that third country.’;

(24) in Article 38g(1), the introductory wording is replaced by the following:

‘Where ESMA finds that a person listed in Article 38b(1), point (a), has not complied with any of the requirements laid down in Article 22a, Article 22b, or Title IVa, it shall take one or more of the following actions:’;

(25) in Article 38h(1), the first subparagraph is replaced by the following:

‘Where ESMA, in accordance with Article 38k(5), finds that a person listed in Article 38b(1), point (a), has intentionally or negligently not complied with any of the requirements provided for in Article 22a, Article 22b, or in Title IVa, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article.’;

(26) the following Article 39a is inserted:

‘Article 39a
Ban on payment for forwarding client orders for execution

Investment firms acting on behalf of clients shall not receive any fee or commission or non-monetary benefits from any third party for forwarding client orders to such third party for their execution.’;

(27) Article 50 is amended as follows:

(a)paragraph 2 is replaced by the following:

‘2.    The power to adopt delegated acts as referred to in the following provisions shall be conferred for an indeterminate period from 2 July 2014: Article 1(9), Article 2(2) and (3), 13(2), 15(5), 17(3), Article 19(2) and (3), and Articles 22b(2), 27(4), 27da(3), 27g(7), 27h(4), 31(4), 38k(10), 38n(3), 40(8), 41(8), 42(7), 45(10) and 52(10).’;

(b)in paragraph 3, the first sentence is replaced by the following:

‘The delegation of power referred to in the following provisions may be revoked at any time by the European Parliament or by the Council: Article 1(9), Article 2(2) and (3), Articles 13(2), 15(5), 17(3), Article 19(2) and (3), and Articles 22b(2), 27(4), 27da(3), 27g(7), 27h(4), 31(4), 38k(10), 38n(3), 40(8), 41(8), 42(7), 45(10) and 52(10).”;

(c)in paragraph 5, the first sentence is replaced by the following:

‘A delegated act adopted pursuant to Article 1(9), Article 2(2) and (3), Articles 13(2), 15(5), 17(3), Article 19(2) and (3), and Articles 22b(2), 27(4), 27da(3), 27g(7), 27h(4), 31(4), 38k(10), 38n(3), 40(8), 41(8), 42(7), 45(10) and 52(10) shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of three months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object.”;

(28) Article 52 is amended as follows:

(a)paragraphs 11 and 12 are replaced by the following:

‘11.    Three years after the first authorisation of a consolidated tape, the Commission shall, after having consulted ESMA, submit a report to the European Parliament and to the Council on the following:

(a)the asset classes covered by a consolidated tape;

(b)the timeliness and delivery quality of market data consolidation;

(c)the role of market data consolidation in reducing implementation shortfall;

(d)the number of subscribers to consolidated market data per asset class;

(e)the effect of market data consolidation on remedying information asymmetries between various capital market participants;

(f)the appropriateness and functioning of the participation scheme for market data contributions;

(g)the effects of the consolidated market data on investments in SMEs.

(h)the possibility that the tape facilitates the identification of financial instruments which display features aligned with Regulation [PO please insert reference to the Regulation on European green bonds]

12. If by [OP insert date 1 year as of entry into force], no consolidated tape has emerged through the selection procedure organised by ESMA as referred to in Article 27da, the Commission shall review the framework and may accompany that review, where appropriate and after having consulted ESMA, with a legislative proposal setting out how ESMA should provide a consolidated tape.’;

(b)paragraph 14 is deleted;

(29) in Article 54, paragraph 2 is deleted.

Article 2 - Entry into force and application

This Regulation shall enter into force and apply 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.