The Commission informed ESMA that it intended to endorse the ESMA standard on transparency requirements in respect of bonds, structured finance products, emission allowances and derivatives once the amendments below are introduced.
Overall, the Commission is supportive of the general approach that ESMA has taken to this standard. However, in the areas set out below the Commission considers necessary to take a more cautious approach to the calibration of the regime in the initial years, gradually building towards ESMA's proposed calibrations once the data reporting system is effectively up and running and the effects of that regime can be properly assessed. Such an approach is also reflective of the concerns raised by the European Parliament's ECON Committee and some members of the Council.
The Commission considers that the proposed main business test should include a wider range of factors when determining the extent to which activities constitute a minority of activities at a group level. In particular, the empowerment contained in Article 2(4) of Directive 2014/65/EU refers to the capital employed for carrying out the ancillary activity relative to the capital employed for carrying out the main business. The capital employed is an important parameter foreseen by the co-legislators to measure the proportion of financial and non-financial activities of a group that should only be set aside if it is manifestly unable to determine the "centre of gravity" of a given group's business activities.
The narrow definition of EEOTC proposed could allow for easy circumvention of the regime using OTC contracts, which would have similar economic exposures, by simply changing a minor parameter of the exchange traded contract. This result hinders the objective pursued by the position limits' mechanism devised in Article 57 with respect to commodity derivatives.
Commission letter (non-equity transparency)
Commission letter (ancillary activities)
Commission letter (position limits)
© European Commission
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