Directive (EU) 2024/2994 of the European Parliament and of the Council of 27 November 2024 amending Directives 2009/65/EC, 2013/36/EU and (EU) 2019/2034 as regards the treatment of concentration risk arising from exposures towards central counterparties and of counterparty risk in centrally cleared derivative transactions (Text with EEA relevance)
Directive (EU) 2024/2994 of the European Parliament and of the Councilof 27 November 2024amending Directives 2009/65/EC, 2013/36/EU and (EU) 2019/2034 as regards the treatment of concentration risk arising from exposures towards central counterparties and of counterparty risk in centrally cleared derivative transactions(Text with EEA relevance)THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty on the Functioning of the European Union, and in particular Article 53(1) thereof,Having regard to the proposal from the European Commission,After transmission of the draft legislative act to the national parliaments,Having regard to the opinion of the European Central BankOJ C 204, 12.6.2023, p. 3.,Acting in accordance with the ordinary legislative procedurePosition of the European Parliament of 24 April 2024 (not yet published in the Official Journal) and decision of the Council of 19 November 2024.,Whereas:(1)To ensure consistency with Regulation (EU) No 648/2012 of the European Parliament and of the CouncilRegulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (OJ L 201, 27.7.2012, p. 1). and to ensure the proper functioning of the internal market, it is necessary to lay down in Directive 2009/65/EC of the European Parliament and of the CouncilDirective 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32). a uniform set of rules to address counterparty risk in derivative transactions performed by undertakings for collective investment in transferable securities (UCITS), where such transactions have been cleared by a central counterparty (CCP) that is authorised or recognised in accordance with that Regulation. Directive 2009/65/EC imposes regulatory limits on counterparty risk only in respect of over-the-counter (OTC) derivative transactions, irrespective of whether the derivatives have been centrally cleared. As central clearing arrangements mitigate the counterparty risk that is inherent in derivative contracts, it is necessary to take into consideration whether a derivative has been centrally cleared by a CCP that is authorised or recognised in accordance with Regulation (EU) No 648/2012 and to establish a level playing-field between exchange-traded and OTC derivatives, when determining the applicable counterparty risk limits. It is also necessary, for regulatory and harmonisation purposes, to remove counterparty risk limits only when the counterparties use CCPs that are authorised or recognised in accordance with Regulation (EU) No 648/2012 to provide clearing services to clearing members and their clients.(2)In order to contribute to the objectives of the capital markets union, it is necessary, for the efficient use of CCPs, to address certain impediments to the use of central clearing in Directive 2009/65/EC and to provide clarifications in Directives 2013/36/EUDirective 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338). and (EU) 2019/2034Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (OJ L 314, 5.12.2019, p. 64). of the European Parliament and of the Council. The excessive reliance of the Union financial system on systemically important third-country CCPs (Tier 2 CCPs) could pose financial stability concerns that need to be addressed appropriately. In order to ensure financial stability in the Union and to adequately mitigate potential risks of contagion across the Union financial system, appropriate measures should therefore be introduced to foster the identification, management and monitoring of concentration risk arising from exposures towards CCPs. In that context, Directives 2013/36/EU and (EU) 2019/2034 should be amended to encourage institutions and investment firms to take the necessary steps to adapt their business models to ensure consistency with the new requirements for clearing introduced by the amendments to Regulation (EU) No 648/2012 contained in Regulation (EU) 2024/2987 of the European Parliament and of the CouncilRegulation (EU) 2024/2987 of the European Parliament and of the Council of 27 November 2024 amending Regulations (EU) No 648/2012, (EU) No 575/2013 and (EU) 2017/1131 as regards measures to mitigate excessive exposures to third-country central counterparties and improve the efficiency of Union clearing markets (OJ L, 2024/2987, 4.12.2024, ELI: http://data.europa.eu/eli/reg/2024/2987/oj). and to enhance overall their risk management practices, also having regard to the nature, scope and complexity of their market activities. While competent authorities already have a comprehensive set of supervisory measures and powers to address deficiencies in the risk management practices of institutions and investment firms, including the requirement to have additional own funds for risks that are not, or not adequately, covered by the existing capital requirements, that set of supervisory measures and powers should be enhanced with additional, more specific tools and powers under Pillar 2 in the context of excessive concentration risk arising from exposures towards CCPs.(3)Since the objectives of this Directive, namely ensuring that credit institutions, investment firms and their competent authorities adequately monitor and mitigate the concentration risk arising from exposures towards Tier 2 CCPs which offer services of substantial systemic importance and eliminating counterparty risk limits for derivative transactions that are centrally cleared by a CCP authorised or recognised in accordance with Regulation (EU) No 648/2012, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale and effects of the action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.(4)Directives 2009/65/EC, 2013/36/EU and (EU) 2019/2034 should therefore be amended accordingly,HAVE ADOPTED THIS DIRECTIVE: