Regulation (EU) 2019/2175 of the European Parliament and of the Council of 18 December 2019 amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority), Regulation (EU) No 1094/2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), Regulation (EU) No 1095/2010 establishing a European Supervisory Authority (European Securities and Markets Authority), Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, and Regulation (EU) 2015/847 on information accompanying transfers of funds (Text with EEA relevance) (Text with EEA relevance)

(14) Article 17 is amended as follows: (a) paragraph 2 is amended as follows: (i) the first subparagraph is replaced by the following: ‘2. Upon request from one or more competent authorities, the European Parliament, the Council, the Commission, the relevant Stakeholder Group, or on its own initiative, including when this is based on well substantiated information from natural or legal persons, and after having informed the competent authority concerned, the Authority shall outline how it intends to proceed with the case and, where appropriate, investigate the alleged breach or non-application of Union law.’; (ii) the following subparagraphs are added: ‘Without prejudice to the powers laid down in Article 35, the Authority may, after having informed the competent authority concerned, address a duly justified and reasoned request for information directly to other competent authorities whenever requesting information from the competent authority concerned has proven, or is deemed to be, insufficient to obtain the information that is deemed necessary for the purpose of investigating an alleged breach or non-application of Union law. The addressee of such a request shall provide the Authority with clear, accurate and complete information without undue delay.’; (b) the following paragraph is inserted: ‘2a. Without prejudice to powers under this Regulation, and before issuing a recommendation as set out in paragraph 3, the Authority shall engage with the competent authority concerned where it considers such engagement appropriate in order to resolve a breach of Union law, in an attempt to reach agreement on actions necessary for the competent authority to comply with Union law.’; (c) paragraphs 6 and 7 are replaced by the following: ‘6. Without prejudice to the powers of the Commission pursuant to Article 258 TFEU, where a competent authority does not comply with the formal opinion referred to in paragraph 4 of this Article within the period specified therein, and where it is necessary to remedy in a timely manner such non-compliance in order to maintain or restore neutral conditions of competition in the market or ensure the orderly functioning and integrity of the financial system, the Authority may, where the relevant requirements of the legislative acts referred to in Article 1(2) of this Regulation are directly applicable to financial institutions, adopt an individual decision addressed to a financial institution requiring it to take all necessary action to comply with its obligations under Union law, including the cessation of any practice. The decision of the Authority shall be in conformity with the formal opinion issued by the Commission pursuant to paragraph 4.

When taking action in relation to issues which are subject to a formal opinion pursuant to paragraph 4 or to a decision pursuant to paragraph 6, competent authorities shall comply with the formal opinion or the decision, as the case may be.’;

(15) the following article is inserted: ‘Article 17a Protection of reporting persons

(16) in Article 18, paragraph 3 is replaced by the following: ‘3. Where the Council has adopted a decision pursuant to paragraph 2 of this Article and, in exceptional circumstances, where coordinated action by competent authorities is necessary to respond to adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Union, or customer and consumer protection, the Authority may adopt individual decisions requiring competent authorities to take the necessary action in accordance with the legislative acts referred to in Article 1(2) to address any such developments by ensuring that financial institutions and competent authorities satisfy the requirements laid down in those legislative acts.’;

(17) Article 19 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1. In cases specified in the legislative acts referred to in Article 1(2) and without prejudice to the powers laid down in Article 17, the Authority may assist the competent authorities in reaching an agreement in accordance with the procedure set out in paragraphs 2 to 4 of this Article in either of the following circumstances: (a) at the request of one or more of the competent authorities concerned where a competent authority disagrees with the procedure or content of an action, proposed action, or inactivity of another competent authority; (b) in cases where the legislative acts referred to in Article 1(2) provide that the Authority may assist, on its own initiative, where on the basis of objective reasons, disagreement can be determined between competent authorities. In cases where the legislative acts referred to in Article 1(2) require a joint decision to be taken by competent authorities, and where in accordance with those acts the Authority may assist, on its own initiative in reaching an agreement in accordance with the procedure set out in paragraphs 2 to 4 of this Article, the competent authorities concerned, a disagreement shall be presumed in the absence of a joint decision being taken by those authorities within the time limits set out in those acts.’; (b) the following paragraphs are inserted: ‘1a. The competent authorities concerned shall, in the following cases, notify the Authority without undue delay that an agreement has not been reached: (a) where a time limit for reaching an agreement between competent authorities has been provided for in the legislative acts referred to in Article 1(2), and either of the following occurs: (i) the time limit has expired; or (ii) at least two competent authorities concerned conclude that a disagreement exists, on the basis of objective reasons; (b) where no time limit for reaching an agreement between competent authorities has been provided for in the legislative acts referred to in Article 1(2), and either of the following occurs: (i) at least two competent authorities concerned conclude that a disagreement exists on the basis of objective reasons; or (ii) two months have elapsed from the date of receipt by a competent authority of a request from another competent authority to take certain action in order to comply with those acts and the requested authority has not yet adopted a decision that satisfies the request. 1b. The Chairperson shall assess whether the Authority should act in accordance with paragraph 1. Where the intervention is at the Authority’s own initiative, the Authority shall notify the competent authorities concerned of its decision regarding the intervention. Pending the Authority’s decision in accordance with the procedure set out in Article 44(4), in cases where the legislative acts referred to in Article 1(2) require a joint decision to be taken, all competent authorities involved in the joint decision shall defer their individual decisions. Where the Authority decides to act, all the competent authorities involved in the joint decision shall defer their decisions until the procedure set out in paragraphs 2 and 3 of this Article is concluded.’; (c) paragraph 3 is replaced by the following: ‘3. Where the competent authorities concerned fail to reach an agreement within the conciliation phase referred to in paragraph 2, the Authority may take a decision requiring those authorities to take specific action, or to refrain from certain action, in order to settle the matter, and to ensure compliance with Union law. The decision of the Authority shall be binding on the competent authorities concerned. The Authority’s decision may require competent authorities to revoke or amend a decision that they have adopted or to make use of the powers which they have under the relevant Union law.’; (d) the following paragraph is inserted: ‘3a. The Authority shall notify the competent authorities concerned of the conclusion of the procedures under paragraphs 2 and 3 together with, where applicable, its decision taken under paragraph 3.’; (e) paragraph 4 is replaced by the following: ‘4. Without prejudice to the powers of the Commission pursuant to Article 258 TFEU, where a competent authority does not comply with the decision of the Authority, and thereby fails to ensure that a financial institution complies with requirements directly applicable to it by virtue of the legislative acts referred to in Article 1(2) of this Regulation, the Authority may adopt an individual decision addressed to that financial institution requiring it to take all necessary action to comply with its obligations under Union law, including the cessation of any practice.’;

(18) Article 21 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1. The Authority shall, promote and monitor within the scope of its powers, the efficient, effective and consistent functioning of the colleges of supervisors where established by legislative acts referred to in Article 1(2) and foster the consistency and coherence of the application of Union law among the colleges of supervisors. With the objective of converging supervisory best practices, the Authority shall promote joint supervisory plans and joint examinations, and staff from the Authority shall have full participation rights in the colleges of supervisors and, as such, shall be able to participate in the activities of the colleges of supervisors, including on-site inspections, carried out jointly by two or more competent authorities.’; (b) paragraph 2 is amended as follows: (i) the first subparagraph is replaced by the following: ‘2. The Authority shall lead in ensuring a consistent and coherent functioning of colleges of supervisors for cross-border institutions across the Union, taking account of the systemic risk posed by financial institutions referred to in Article 23, and shall, where appropriate, convene a meeting of a college of supervisors.’; (ii) in the third subparagraph, point (b) is replaced by the following: ‘(b) initiate and coordinate Union-wide stress tests in accordance with Article 32 to assess the resilience of financial institutions, in particular the systemic risk posed by financial institutions as referred to in Article 23, to adverse market developments, and evaluate the potential for systemic risk to increase in situations of stress, ensuring that a consistent methodology is applied at national level to such tests and, where appropriate, address a recommendation to the competent authority to correct issues identified in the stress test, including a recommendation to conduct specific assessments; it may recommend competent authorities to carry out on-site inspections, and may participate in such on-site inspections, in order to ensure comparability and reliability of methods, practices and results of Union-wide assessments;’; (c) paragraph 3 is replaced by the following: ‘3. The Authority may develop draft regulatory and implementing technical standards in accordance with the empowerments laid down in the legislative acts referred to in Article 1(2), and in accordance with Articles 10 to 15, to ensure uniform conditions of application with respect to the provisions regarding the operational functioning of colleges of supervisors. The Authority may issue guidelines and recommendations in accordance with Article 16 to promote convergence in supervisory functioning and best practices that have been adopted by the colleges of supervisors.’;

(19) Article 22 is amended as follows: (a) the title is replaced by the following: ‘General provisions on systemic risk’; (b) in paragraph 2, the first subparagraph is replaced by the following: ‘2. The Authority shall, in collaboration with the ESRB, and in accordance with Article 23, develop a common approach to the identification and measurement of systemic importance, including quantitative and qualitative indicators as appropriate.’; (c) paragraph 4 is replaced by the following: ‘4. Upon request from one or more competent authorities, the European Parliament, the Council or the Commission, or on its own initiative, the Authority may conduct an inquiry into a particular type of financial institution or type of product or type of conduct in order to assess potential threats to the stability of the financial system or to the protection of customers or consumers. Following an inquiry conducted pursuant to the first subparagraph, the Board of Supervisors may make appropriate recommendations for action to the competent authorities concerned. For those purposes, the Authority may use the powers conferred on it under this Regulation, including Article 35.’;

(20) in Article 23, paragraph 1 is replaced by the following: ‘1. The Authority shall, in consultation with the ESRB, develop criteria for the identification and measurement of systemic risk and an adequate stress-testing regime which includes an evaluation of the potential for systemic risk posed by, or to, financial market participants to increase in situations of stress, including potential environmental-related systemic risk. The financial market participants that may pose a systemic risk shall be subject to strengthened supervision, and where necessary, the recovery and resolution procedures referred to in Article 25.’;

(21) Article 29 is amended as follows: (a) paragraph 1 is amended as follows: (i) the following points are inserted: ‘(aa) establishing Union strategic supervisory priorities in accordance with Article 29a; (ab) establishing coordination groups in accordance with Article 45b to promote supervisory convergence and identify best practices;’; (ii) point (b) is replaced by the following: ‘(b) promoting an effective bilateral and multilateral exchange of information between competent authorities, pertaining to all relevant issues, including cyber security and cyber-attacks, with full respect for the applicable confidentiality and data protection provisions provided for in the relevant Union legislative acts;’; (iii) point (e) is replaced by the following: ‘(e) establishing sectoral and cross-sectoral training programmes, including with respect to technological innovation, different forms of cooperatives and mutuals, facilitating personnel exchanges and encouraging competent authorities to intensify the use of secondment schemes and other tools;’; (iv) the following point is added: ‘(f) putting in place a monitoring system to assess material environmental, social and governance-related risks, taking into account the Paris Agreement to the United Nations Framework Convention on Climate Change;’; (b) paragraph 2 is replaced by the following: ‘2. The Authority may, as appropriate, develop new practical instruments and convergence tools to promote common supervisory approaches and practices. For the purpose of establishing a common supervisory culture, the Authority shall develop and maintain an up-to-date Union supervisory handbook on the supervision of financial institutions in the Union, which duly takes into account the nature, scale and complexity of risks, business practices, business models and size of financial institutions and of markets. The Union supervisory handbook shall set out best practices and shall specify high- quality methodologies and processes. The Authority shall, where appropriate, conduct open public consultations regarding the opinions referred to in point (a) of paragraph 1, tools and instruments referred to in this paragraph. It shall also, where appropriate, analyse the related potential costs and benefits. Such consultations and analyses shall be proportionate in relation to the scope, nature and impact of the opinions or tools and instruments. The Authority shall, where appropriate, also request advice from the relevant Stakeholder Group referred to in Article 37.’;

(22) the following Article is inserted: ‘Article 29a Union strategic supervisory priorities Following a discussion in the Board of Supervisors and taking into account contributions received from competent authorities, existing work by the Union institutions, and analysis, warnings and recommendations published by the ESRB, the Authority shall, at least every three years, by 31 March, identify up to two priorities of Union-wide relevance which shall reflect future developments and trends. Competent authorities shall take those priorities into account when drawing up their work programmes and shall notify the Authority accordingly. The Authority shall discuss the relevant activities by the competent authorities in the following year and draw conclusions. The Authority shall discuss possible follow up which may include guidelines, recommendations to competent authorities, and peer reviews, in the respective area. The priorities of Union-wide relevance identified by the Authority shall not prevent competent authorities from applying their best practices, acting on their additional priorities and developments, and national specificities shall be considered.’;

(23) Article 30 is replaced by the following: ‘Article 30 Peer reviews of competent authorities

(a) the adequacy of resources, the degree of independence, and governance arrangements of the competent authority, with particular regard to the effective application of the legislative acts referred to in Article 1(2) and the capacity to respond to market developments; (b) the effectiveness and the degree of convergence reached in the application of Union law and in supervisory practice, including regulatory technical standards and implementing technical standards, guidelines and recommendations adopted pursuant to Articles 10 to 16, and the extent to which the supervisory practice achieves the objectives set out in Union law; (c) the application of best practices developed by competent authorities whose adoption might be of benefit for other competent authorities; (d) the effectiveness and the degree of convergence reached with regard to the enforcement of the provisions adopted in the implementation of Union law, including the administrative sanctions and other administrative measures imposed against persons responsible where those provisions have not been complied with.

In accordance with Article 16(3), the competent authorities shall make every effort to comply with any guidelines and recommendations issued. When developing draft regulatory technical standards or draft implementing technical standards in accordance with Articles 10 to 15, or guidelines or recommendations in accordance with Article 16, the Authority shall take into account the outcome of the peer review, along with any other information acquired by the Authority in carrying out its tasks, in order to ensure convergence of the highest quality supervisory practices.

(24) Article 31 is amended as follows: (a) the first paragraph is replaced by the following: ‘1. The Authority shall fulfil a general coordination role between competent authorities, in particular in situations where adverse developments could potentially jeopardise the orderly functioning and integrity of financial markets or the stability of the financial system or in situations of cross-border business potentially affecting the protection of policyholders, pension scheme members and beneficiaries in the Union.’; (b) the second paragraph is amended as follows: (i) the introductory part is replaced by the following: ‘2. The Authority shall promote a coordinated Union response, inter alia, by:’; (ii) point (e) is replaced by the following: ‘(e) taking appropriate measures in the event of developments which may jeopardise the functioning of the financial markets with a view to the coordination of actions undertaken by relevant competent authorities;’; (iii) the following point is inserted: ‘(ea) taking appropriate measures to coordinate actions undertaken by relevant competent authorities with a view to facilitating the entry into the market of actors or products relying on technological innovation;’; (c) the following paragraph is added: ‘3. In order to contribute to the establishment of a common European approach towards technological innovation, the Authority shall promote supervisory convergence, with the support, where relevant, of the Committee on consumer protection and financial innovation, facilitating entry into the market of actors or products relying on technological innovation, in particular through the exchange of information and best practices. Where appropriate, the Authority may adopt guidelines or recommendations in accordance with Article 16.’;

(25) the following Article is inserted: ‘Article 31a Information exchange on fitness and propriety The Authority shall, together with the European Supervisory Authority (European Banking Authority) and with the European Supervisory Authority (European Securities and Markets Authority), establish a system for the exchange of information relevant to the assessment of the fitness and propriety of holders of qualifying holdings, directors and key function holders of financial institutions by competent authorities in accordance with the legislative acts referred to in Article 1(2).’;

(26) Article 32 is amended as follows: (a) the title is replaced by the following: ‘Assessment of market developments, including stress tests’; (b) paragraph 1 is replaced by the following: ‘1. The Authority shall monitor and assess market developments in the area of its competence and, where necessary, inform the European Supervisory Authority (European Banking Authority) and the European Supervisory Authority (European Securities and Markets Authority), the ESRB, and the European Parliament, the Council and the Commission about the relevant micro-prudential trends, potential risks and vulnerabilities. The Authority shall include, in its assessments, an analysis of the markets in which financial institutions operate and an assessment of the impact of potential market developments on such institutions.’; (c) paragraph 2 is amended as follows: (i) the introductory part is replaced by the following: ‘2. The Authority shall initiate and coordinate Union-wide assessments of the resilience of financial institutions to adverse market developments. To that end, it shall develop:’; (ii) point (a) is replaced by the following: ‘(a) common methodologies for assessing the effect of economic scenarios on a financial institution’s financial position taking into account inter alia risks stemming from adverse environmental developments;’; (iii) the following point is inserted: ‘(aa) common methodologies for identifying financial institutions to be included in Union-wide assessments;’; (iv) the following point is added: ‘(d) common methodologies for assessing the effect of environmental risks on the financial stability of financial institutions.’; (v) the following subparagraph is added: ‘For the purposes of this paragraph, the Authority shall cooperate with the ESRB.’; (d) in paragraph 3, the first subparagraph is replaced by the following: ‘3. Without prejudice to the tasks of the ESRB set out in Regulation (EU) No 1092/2010, the Authority shall, once a year, and more frequently where necessary, provide assessments to the European Parliament, to the Council, to the Commission and to the ESRB of trends, potential risks and vulnerabilities in its area of competence, in combination with the indicators referred to in Article 22(2) of this Regulation.’;

(27) Article 33 is replaced by the following: ‘Article 33 International relations including equivalence

Where a third country, in accordance with a delegated act, which is in force, adopted by the Commission pursuant to Article 9 of Directive (EU) 2015/849, is on the list of jurisdictions which have strategic deficiencies in their national anti-money laundering and in countering the financing of terrorism regimes that pose significant threats to the financial system of the Union, the Authority shall not conclude administrative arrangements with the regulatory and supervisory authorities of that third country. This shall not preclude other forms of cooperation between the Authority and the respective third-country authorities with a view to reducing threats to the financial system of the Union.

Furthermore, it shall verify whether the criteria on the basis of which those equivalence decisions have been taken, and any conditions set out therein are still fulfilled. The Authority may liaise with relevant authorities in third countries. The Authority shall submit a confidential report to the European Parliament, to the Council, to the Commission and to the European Supervisory Authority (European Banking Authority) and to the European Supervisory Authority (European Securities and Markets Authority) summarising the findings of its monitoring of all equivalent third countries. The report shall focus in particular on implications for financial stability, market integrity, policy holder protection or the functioning of the internal market. Where the Authority identifies relevant developments in relation to the regulation and supervision or the enforcement practices in the third countries referred to in this paragraph that may affect the financial stability of the Union or of one or more of its Member States, market integrity, policy holder protection or the functioning of the internal market, it shall inform the European Parliament, the Council and the Commission on a confidential basis and without undue delay.

(a) the mechanisms which allow the Authority to obtain relevant information, including information on the regulatory regime, the supervisory approach, relevant market developments and any changes that may affect the equivalence decision; (b) to the extent necessary for the follow-up of such equivalence decisions, the procedures concerning the coordination of supervisory activities including, where necessary, on-site inspections The Authority shall inform the Commission, where a third-country competent authority refuses to conclude such administrative arrangements or when it refuses to effectively cooperate.

In the report referred to in Article 43(5), the Authority shall include information on the administrative arrangements agreed upon with supervisory authorities, international organisations or administrations in third countries, the assistance provided by the Authority to the Commission in preparing equivalence decisions and the monitoring by the Authority in accordance with paragraph 3 of this Article.

(28) Article 34 is deleted;

(29) Article 36 is amended as follows: (a) paragraph 3 is deleted; (b) paragraphs 4 and 5 are replaced by the following: ‘4. On receipt of a warning or recommendation from the ESRB addressed to the Authority, the Authority shall discuss that warning or recommendation at the next meeting of the Board of Supervisors or, where appropriate, earlier, in order to assess the implications of, and possible follow-up to, such a warning or recommendation for the fulfilment of its tasks. It shall decide, by the relevant decision-making procedure, on any actions to be taken in accordance with the powers conferred upon it by this Regulation for addressing the issues identified in the warnings and recommendations. If the Authority does not act on a warning or recommendation, it shall explain to the ESRB its reasons for not doing so. The ESRB shall inform the European Parliament thereof in accordance with Article 19(5) of Regulation (EU) No 1092/2010. The ESRB shall also inform the Council thereof.

Where the addressee intends not to follow the recommendation of the ESRB, it shall inform and discuss with the Board of Supervisors its reasons for not acting. Where the competent authority, in accordance with Article 17(1) of Regulation (EU) No 1092/2010, informs the European Parliament, the Council, the Commission and the ESRB of the actions it has undertaken in response to a recommendation of the ESRB, it shall take due account of the views of the Board of Supervisors.’; (c) paragraph 6 is deleted;

(30) Article 37 is amended as follows: (a) paragraphs 2, 3 and 4 are replaced by the following: ‘2. The Insurance and Reinsurance Stakeholder Group shall be composed of 30 members. Those members shall comprise of: (a) 13 members representing, in balanced proportions, insurance and reinsurance undertakings and insurance intermediaries operating in the Union, of whom three shall represent cooperative and mutual insurers or reinsurers; (b) 13 members representing employees’ representatives of insurance and reinsurance undertakings and insurance intermediaries operating in the Union, consumers, users of insurance and reinsurance services, representatives of SMEs and representatives of relevant professional associations; and (c) four members who are independent top-ranking academics.

(a) 13 members representing in balanced proportions institutions for occupational retirement provision operating in the Union; (b) 13 members representing representatives of employees, representatives of beneficiaries, representatives of SMEs and representatives of relevant professional associations; and (c) four members who are independent top-ranking academics.

(b) the following paragraph is inserted: ‘4a. Members of the relevant Stakeholder Group shall elect a Chair from among its members. The position of the Chair shall be held for a period of two years. The European Parliament may invite the Chair of any Stakeholder Group to make a statement before it and answer any questions from its members whenever so requested.’; (c) in paragraphs 5, the first subparagraph is replaced by the following: ‘5. The Authority shall provide all necessary information subject to professional secrecy as set out in Article 70 of this Regulation and ensure adequate secretarial support for the Stakeholder Groups. Adequate compensation shall be provided to members of the Stakeholder Groups representing non-profit organisations, excluding industry representatives. This compensation shall take into account the members’ preparatory and follow-up work and shall be at least equivalent to the reimbursement rates of officials pursuant to Title V, Chapter 1, Section 2 of the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union, laid down in Council Regulation (EEC, Euratom, ECSC) No 259/68 (^*33) (the Staff Regulations). The Stakeholder Groups may establish working groups on technical issues. Members of the Insurance and Reinsurance Stakeholder Group and of the Occupational Pensions Stakeholder Group shall serve for a period of four years, following which a new selection procedure shall take place. (d) paragraph 6 is replaced by the following: ‘6. The Stakeholder Groups may submit advice to the Authority on any issue related to the tasks of the Authority with particular focus on the tasks set out in Articles 10 to 16, and 29, 30 and 32. Where members of the Stakeholder Groups cannot agree on advice, one third of their members or the members representing one group of stakeholders shall be permitted to issue separate advice. The Insurance and Reinsurance Stakeholder Group, the Occupational Pensions Stakeholder Group, the Banking Stakeholder Group, and the Securities and Markets Stakeholder Group may issue joint advice on issues related to the work of the ESAs under Article 56 on joint positions and common acts.’; (e) paragraph 8 is replaced by the following: ‘8. The Authority shall make public the advice of the Stakeholder Groups, the separate advice of its members, and the results of its consultations as well as information on how advice and results of consultations have been taken into account.’;

(31) Article 39 is replaced by the following: ‘Article 39 Decision-making procedures

(32) Article 40 is amended as follows (a) in paragraph 1, point (a) is replaced by the following: ‘(a) the Chairperson;’; (b) the following paragraph is added: ‘6. Where the national public authority referred to in point (b) of paragraph 1 is not responsible for the enforcement of consumer protection rules, the member of the Board of Supervisors referred to in that point may decide to invite a representative from the Member State’s consumer protection authority, who shall be non-voting. In the case where the responsibility for consumer protection is shared by several authorities in a Member State, those authorities shall agree on a common representative.’;

(33) Articles 41 and 42 are replaced by the following: ‘Article 41 Internal committees

Each member of the panel shall have one vote. Decisions of the panel shall be taken where at least four members vote in favour.

Each member of the panel shall have one vote. Decisions of the panel shall be taken where at least four members vote in favour.

Each member of the panel shall have one vote. Decisions of the panel shall be taken where at least four members vote in favour.

Article 42

Independence of the Board of Supervisors

(34) Article 43 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1. The Board of Supervisors shall give guidance to the work of the Authority and shall be in charge of taking the decisions referred to in Chapter II. The Board of Supervisors shall adopt the opinions, recommendations, guidelines and decisions of the Authority, and issue the advice referred to in Chapter II, based on a proposal of the relevant internal committee or panel, the Chairperson, or of the Management Board, as applicable.’; (b) paragraphs 2 and 3 are deleted; (c) paragraph 5 is replaced by the following: ‘5. The Board of Supervisors shall adopt, on the basis of a proposal by the Management Board, the annual report on the activities of the Authority, including on the performance of the Chairperson’s duties, and shall transmit that report to the European Parliament, to the Council, to the Commission, to the Court of Auditors and to the European Economic and Social Committee by 15 June each year. The report shall be made public.’; (d) paragraph 8 is replaced by the following: ‘8. The Board of Supervisors shall exercise disciplinary authority over the Chairperson and the Executive Director. It may remove the Executive Director from office in accordance with Article 51(5).’;

(35) the following Article is inserted: ‘Article 43a Transparency of decisions adopted by the Board of Supervisors Notwithstanding Article 70, within six weeks of each meeting of the Board of Supervisors, the Authority shall, at least, provide the European Parliament with a comprehensive and meaningful record of the proceedings of that meeting that enables a full understanding of the discussions, including an annotated list of decisions. Such record shall not reflect discussions within the Board of Supervisors relating to individual financial institutions, unless otherwise provided for in Article 75(3) or in the legislative acts referred to in Article 1(2).’;

(36) Article 44 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1. Decisions of the Board of Supervisors shall be taken by a simple majority of its members. Each voting member shall have one vote. With regard to the acts specified in Articles 10 to 16 of this Regulation and measures and decisions adopted under the third subparagraph of Article 9(5) of this Regulation and Chapter VI of this Regulation and, by way of derogation from the first subparagraph of this paragraph, the Board of Supervisors shall take decisions on the basis of a qualified majority of its members, as defined in Article 16(4) of the Treaty on European Union and in Article 3 of the Protocol No 36 on transitional provisions. The Chairperson shall not vote on the decisions referred to in the second subparagraph. With regard to the composition of the panels in accordance with Article 41(2), (3) and (4), and the members of the peer review committee referred to in Article 30(2), the Board of Supervisors, when considering the proposals by the Chairperson, shall strive for consensus. In the absence of consensus, decisions of the Board of Supervisors shall be taken by a majority of three quarters of its voting members. Each voting member shall have one vote. With regard to decisions adopted under Article 18(3) and (4), and by way of derogation from the first subparagraph of this paragraph, the Board of Supervisors shall take decisions on the basis of a simple majority of its voting members.’; (b) paragraph 4 is replaced by the following: ‘4. With regard to the decisions in accordance with Articles 17, 19 and 30 the Board of Supervisors shall vote on the proposed decisions using a written procedure. The voting members of the Board of Supervisors shall have eight working days to vote. Each voting member shall have one vote. The proposed decision shall be considered adopted unless a simple majority of voting members of the Board of Supervisors objects. Abstentions shall not be counted as approvals or as objections, and shall not be considered when calculating the number of votes cast. If three voting members of the Board of Supervisors object to the written procedure, the draft decision shall be discussed and decided on by the Board of Supervisors in accordance with the procedure set out in paragraph 1 of this Article. The non-voting members and the observers, with the exception of the Executive Director, shall not attend any discussions within the Board of Supervisors relating to individual financial institutions, unless otherwise provided for in Article 75(3) or in the legislative acts referred to in Article 1(2).’; (c) the following paragraph is added: ‘5. The Authority’s Chairperson shall have the prerogative to call a vote at any time. Without prejudice to that power and to the effectiveness of the Authority’s decision-making procedures, the Board of Supervisors of the Authority shall strive for consensus when taking its decisions.’;

(37) Article 45 is replaced by the following: ‘Article 45 Composition

Other than the Chairperson, each member of the Management Board shall have an alternate who may replace him if he is prevented from attending.

(38) the following Articles are inserted: ‘Article 45a Decision-making

Article 45b

Coordination Groups

(39) Article 46 is replaced by the following: ‘Article 46 Independence of the Management Board The members of the Management Board shall act independently and objectively in the sole interest of the Union as a whole and shall neither seek nor take instructions from the Union institutions or bodies, from any government or from any other public or private body. Member States, Union institutions or bodies and any other public or private body shall not seek to influence the members of the Management Board in the performance of their tasks.’;

(40) Article 47 is amended as follows: (a) the following paragraph is inserted: ‘3a. The Management Board may examine, give an opinion on and make proposals on all matters except for tasks laid down in Article 30.’; (b) paragraph 6 is replaced by the following: ‘6. The Management Board shall propose an annual report on the activities of the Authority, including on the Chairperson’s duties, to the Board of Supervisors for approval.’; (c) paragraph 8 is replaced by the following: ‘8. The Management Board shall appoint and remove the members of the Board of Appeal in accordance with Article 58(3) and (5), taking duly into account a proposal by the Board of Supervisors.’; (d) the following paragraph is added: ‘9. The members of the Management Board shall make public all meetings held and any hospitality received. Expenses shall be recorded publicly in accordance with the Staff Regulations.’;

(41) Article 48 is amended as follows: (a) in paragraph 1, the second subparagraph is replaced by the following: ‘The Chairperson shall be responsible for preparing the work of the Board of Supervisors, including setting the agenda to be adopted by the Board of Supervisors, convening the meetings and tabling items for decision, and shall chair the meetings of the Board of Supervisors. The Chairperson shall be responsible for setting the agenda of the Management Board, to be adopted by the Management Board, and shall chair the meetings of the Management Board. The Chairperson may invite the Management Board to consider setting up a coordination group in accordance with Article 45b.’; (b) paragraph 2 is replaced by the following: ‘2. The Chairperson shall be selected on the basis of merit, skills, knowledge of financial institutions and markets, and of experience relevant to financial supervision and regulation, following an open selection procedure which shall respect the principle of gender balance and shall be published in the Official Journal of the European Union. The Board of Supervisors shall draw up a shortlist of qualified candidates for the position of the Chairperson, with the assistance of the Commission. Based on the shortlist, the Council shall adopt a decision to appoint the Chairperson, after confirmation by the European Parliament. Where the Chairperson no longer fulfils the conditions referred to in Article 49 or has been found guilty of serious misconduct, the Council may, acting on a proposal from the Commission which has been approved by the European Parliament, adopt a decision to remove him or her from office. The Board of Supervisors shall also elect, from among its members, a Vice-Chairperson who shall carry out the functions of the Chairperson in the absence of the Chairperson. That Vice-Chairperson shall not be elected from among the members of the Management Board.’; (c) in paragraph 4, the second subparagraph is replaced by the following: ‘For the purpose of the evaluation referred to in the first subparagraph, the tasks of the Chairperson shall be carried out by the Vice-Chairperson. The Council, acting on a proposal from the Board of Supervisors and with the assistance of the Commission, and taking into account the evaluation referred to in the first subparagraph, may extend the term of office of the Chairperson once.’; (d) paragraph 5 is replaced by the following: ‘5. The Chairperson may be removed from office only on serious grounds. He or she may only be removed by the European Parliament following a decision of the Council, adopted after consulting the Board of Supervisors.’;

(42) Article 49 is amended as follows: (a) the title is replaced by the following: ‘Independence of the Chairperson’; (b) the first paragraph is replaced by the following: ‘Without prejudice to the role of the Board of Supervisors in relation to the tasks of the Chairperson, the Chairperson shall neither seek nor take instructions from the Union institutions or bodies, from any government or from any other public or private body.’;

(43) the following article is inserted: ‘Article 49a Expenses The Chairperson shall make public all meetings held with external stakeholders within a period of two weeks following the meeting and any hospitality received. Expenses shall be recorded publicly in accordance with the Staff Regulations.’;

(44) Article 50 is deleted;

(45) Article 54 is amended as follows: (a) paragraph 2 is amended as follows: (i) the introductory part is replaced by the following: ‘2. The Joint Committee shall serve as a forum in which the Authority shall cooperate regularly and closely to ensure cross-sectoral consistency, while considering sectoral specificities, with the European Supervisory Authority (European Banking Authority) and the European Supervisory Authority (European Securities and Markets Authority), in particular regarding:’; (ii) the first indent is replaced by the following: — ‘— financial conglomerates and, where required by Union law, prudential consolidation,’; (iii) the fifth indent is replaced by the following: — ‘— cybersecurity,’; (iv) the sixth indent is replaced by the following: — ‘— information and best practice exchange with the ESRB and the other ESAs,’; (v) the following indents are added: — ‘— retail financial services and consumer and investor protection issues; — advice by the Committee established in accordance with Article 1(7).’; (b) the following paragraph is inserted: ‘2a. The Joint Committee may assist the Commission in assessing the conditions and the technical specifications and procedures for ensuring secure and efficient inter-connection of the centralised automated mechanisms pursuant to the report referred in Article 32a(5) of Directive (EU) 2015/849 as well as in the effective interconnection of the national registers under that Directive.’; (c) paragraph 3 is replaced by the following: ‘3. The Joint Committee shall have a dedicated staff provided by the ESAs that shall act as a permanent secretariat. The Authority shall contribute adequate resources to administrative, infrastructure and operational expenses.’;

(46) Article 55 is amended as follows: (a) paragraph 3 is replaced by the following: ‘3. The Chairperson of the Joint Committee shall be appointed on an annual rotational basis from among the Chairpersons of the ESAs. The Chairperson of the Joint Committee shall be the second Vice-Chair of the ESRB.’; (b) in paragraph 4, the second subparagraph is replaced by the following: ‘The Joint Committee shall meet at least once every three months.’; (c) the following paragraph is added: ‘5. The Chairperson of the Authority shall regularly inform the Board of Supervisors on positions taken in the meetings of the Joint Committee.’;

(47) Articles 56 and 57 are replaced by the following: ‘Article 56 Joint positions and common acts Within the scope of its tasks set out in Chapter II of this Regulation, and in particular with respect to the implementation of Directive 2002/87/EC, where relevant, the Authority shall reach joint positions by consensus with, as appropriate, the European Supervisory Authority (European Banking Authority) and with the European Supervisory Authority (European Securities and Markets Authority). Where required by Union law, measures pursuant to Articles 10 to 16, and decisions pursuant to Articles 17, 18 and 19, of this Regulation in relation to the application of Directive 2002/87/EC and of any other legislative acts referred to in Article 1(2) of this Regulation that also fall within the area of competence of the European Supervisory Authority (European Banking Authority) or the European Supervisory Authority (European Securities and Markets Authority) shall be adopted, in parallel, by, as appropriate, the Authority, the European Supervisory Authority (European Banking Authority) and the European Supervisory Authority (European Securities and Markets Authority).

Article 57

Sub-Committees

(48) Article 58 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1. The Board of Appeal of the European Supervisory Authorities is hereby established.’; (b) in paragraph 2, the first subparagraph is replaced by the following: ‘2. The Board of Appeal shall be composed of six members and six alternates, who shall be individuals of high repute with a proven record of relevant knowledge of Union law and of having international professional experience, to a sufficiently high level in the fields of banking, insurance, occupational pensions, securities markets or other financial services, excluding current staff of the competent authorities or other national or Union institutions or bodies involved in the activities of the Authority and members of the Insurance and Reinsurance Stakeholder Group and members of the Occupational Pensions Stakeholder Group. Members and alternates shall be nationals of a Member State and shall have a thorough knowledge of at least two official languages of the Union. The Board of Appeal shall have sufficient legal expertise to provide expert legal advice on the legality, including proportionality, of the Authority’s exercise of its powers’; (c) paragraph 3 is replaced by the following: ‘3. Two members of the Board of Appeal and two alternates shall be appointed by the Management Board of the Authority from a shortlist proposed by the Commission, following a public call for expressions of interest published in the Official Journal of the European Union, and after consultation of the Board of Supervisors. After having received the shortlist, the European Parliament may invite candidates for members and alternates to make a statement before it and answer any questions from its Members. The European Parliament may invite the members of the Board of Appeal to make a statement before it and answer any questions from its Members whenever so requested, to the exclusion of statements, questions or answers pertaining to individual cases decided by, or pending before, the Board of Appeal.’;

(49) in Article 59, paragraph 2 is replaced by the following: ‘2. Members of the Board of Appeal, and staff of the Authority providing operational and secretariat support, shall not take part in any appeal proceedings in which they have any personal interest, if they have previously been involved as representatives of one of the parties to the proceedings, or if they have participated in the decision under appeal.’;

(50) in Article 60, paragraph 2 is replaced by the following: ‘2. The appeal, together with a statement of grounds, shall be filed in writing at the Authority within three months of the date of notification of the decision to the person concerned, or, in the absence of a notification, of the day on which the Authority published its decision. The Board of Appeal shall decide upon the appeal within three months after the appeal has been lodged.’;

(51) the following article is inserted: ‘Article 60a Exceeding of competence by the Authority Any natural or legal person may send reasoned advice to the Commission if that person is of the opinion that the Authority has exceeded its competence, including by failing to respect the principle of proportionality referred to in Article 1(5), when acting under Articles 16 and 16b, and that is of direct and individual concern to that person.’;

(52) in Article 62, paragraph 1 is amended as follows: (a) the introductory part is replaced by the following: ‘1. The revenues of the Authority, a European body in accordance with Article 70 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (^*34) (“the Financial Regulation”), shall consist, in particular, of any combination of the following: (b) the following points are added: ‘(d) any voluntary contribution from Member States or observers; (e) agreed charges for publications, training and for any other services provided by the Authority where they have been specifically requested by one or more competent authorities.’; (c) the following sub-paragraph is added: ‘Any voluntary contribution from Member States or observers referred to in point d of the first sub-paragraph shall not be accepted if such acceptance would cast doubt on the independence and impartiality of the Authority. Voluntary contributions that constitute compensation for the cost of tasks delegated by a competent authority to the Authority shall not be considered to cast doubt on the independence of the latter.’;

(53) Articles 63, 64 and 65 are replaced by the following: ‘Article 63 Establishment of the budget

Article 64

Implementation and control of the budget

The Authority’s accounting officer shall also send, by 15 June each year, a reporting package to the Commission’s accounting officer, in a standardised format as laid down by the Commission’s accounting officer for consolidation purposes.

Article 65

Financial rules The financial rules applicable to the Authority shall be adopted by the Management Board after consulting the Commission. Those rules may not depart from Commission Delegated Regulation (EU) 2019/715 (^*35) unless the specific operational needs for the functioning of the Authority so require and only with the prior agreement of the Commission.

(54) in Article 66, paragraph 1 is replaced by the following: ‘1. For the purposes of combating fraud, corruption and any other illegal activity, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (^*36) shall apply to the Authority without any restriction.

(55) Article 70 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1. Members of the Board of Supervisors, and all members of the staff of the Authority, including officials seconded by Member States on a temporary basis, and all other persons carrying out tasks for the Authority on a contractual basis, shall be subject to the requirements of professional secrecy pursuant to Article 339 TFEU and the relevant provisions in Union legislation, even after their duties have ceased.’; (b) in paragraph 2, the second subparagraph is replaced by the following: ‘The obligation under paragraph 1 of this Article and the first subparagraph of this paragraph shall not prevent the Authority and the competent authorities from using the information for the enforcement of the legislative acts referred to in Article 1(2), and in particular for legal procedures for the adoption of decisions.’; (c) the following paragraph is inserted: ‘2a. The Management Board, and the Board of Supervisors shall ensure that individuals who provide any service, directly or indirectly, permanently or occasionally, relating to the tasks of the Authority, including officials and other persons authorised by the Management Board and the Board of Supervisors or appointed by the competent authorities for that purpose, are subject to the requirements of professional secrecy equivalent to those in paragraphs 1 and 2. The same requirements for professional secrecy shall also apply to observers who attend the meetings of the Management Board, and the Board of Supervisors and who take part in the activities of the Authority.’; (d) paragraphs 3 and 4 are replaced by the following: ‘3. Paragraphs 1 and 2 shall not prevent the Authority from exchanging information with competent authorities in accordance with this Regulation and with other Union legislation applicable to financial institutions. That information shall be subject to the conditions of professional secrecy referred to in paragraphs 1 and 2. The Authority shall lay down in its internal rules of procedure the practical arrangements for implementing the confidentiality rules referred to in paragraphs 1 and 2.

(56) Article 71 is replaced by the following: ‘Article 71 Data protection This Regulation shall be without prejudice to the obligations of Member States relating to their processing of personal data under Regulation (EU) 2016/679 or the obligations of the Authority relating to its processing of personal data under Regulation (EU) 2018/1725 of the European Parliament and of the Council (^*38) when fulfilling its responsibilities.

(57) in Article 72, paragraph 2 is replaced by the following: ‘2. The Management Board shall adopt practical measures for applying Regulation (EC) No 1049/2001.’;

(58) in Article 74, the first paragraph is replaced by the following: ‘The necessary arrangements concerning the accommodation to be provided for the Authority in the Member State where its seat is located and the facilities to be made available by that Member State, as well as the specific rules applicable in that Member State to the staff of the Authority and members of their families, shall be laid down in a Headquarters Agreement between the Authority and that Member State which they concluded after obtaining the approval of the Management Board.’;

(59) Article 76 is replaced by the following: ‘Article 76 Relationship with the Committee of European Insurance and Occupational Pensions Supervisors The Authority shall be considered the legal successor of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). By the date of establishment of the Authority, all assets and liabilities and all pending operations of CEIOPS shall be automatically transferred to the Authority. CEIOPS shall establish a statement showing its closing asset and liability situation as of the date of that transfer. That statement shall be audited and approved by CEIOPS and by the Commission.’;

(60) Article 81 is amended as follows: (a) paragraph 1 is amended as follows: (i) the introductory sentence is replaced by the following: ‘1. By 31 December 2021, and every three years thereafter, the Commission shall publish a general report on the experience acquired as a result of the operation of the Authority and the procedures laid down in this Regulation. That report shall evaluate, inter alia:’; (ii) in point (a), the introductory sentence, and point (i) are replaced by the following: ‘(a) the effectiveness and convergence in supervisory practices reached by competent authorities: (i) the independence of the competent authorities and convergence in standards equivalent to corporate governance;’; (iii) the following point is added: ‘(g) the functioning of the Joint Committee.’; (b) the following paragraph is inserted: ‘2a. As part of the general report referred to in paragraph 1 of this Article, the Commission shall, after consulting all relevant authorities and stakeholders, conduct a comprehensive assessment of the application of Article 9a.’.

Article 3

Amendments to Regulation (EU) No 1095/2010

Regulation (EU) No 1095/2010 is amended as follows:

(1) Article 1 is amended as follows: (a) paragraphs 2 and 3 are replaced by the following: ‘2. The Authority shall act within the powers conferred by this Regulation and within the scope of Directives 97/9/EC, 98/26/EC, 2001/34/EC, 2002/47/EC, 2004/109/EC, 2009/65/EC, Directive 2011/61/EU of the European Parliament and of the Council (³⁹), Regulation (EC) No 1060/2009 and Directive 2014/65/EU of the European Parliament and of the Council (40), Regulation (EU) 2017/1129 of the European Parliament and of the Council (⁴¹), and to the extent that those acts apply to firms providing investment services or to collective investment undertakings marketing their units or shares and the competent authorities that supervise them, within the relevant parts of, Directives 2002/87/EC and 2002/65/EC, including all directives, regulations, and decisions based on those acts, and of any further legally binding Union act which confers tasks on the Authority. The Authority shall contribute to the work of the European Supervisory Authority (European Banking Authority) established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council (42) related to the prevention of the use of the financial system for the purpose of money laundering or terrorist financing in accordance with Directive (EU) 2015/849 of the European Parliament and of the Council (^*43) and Regulation (EU) No 1093/2010. The Authority shall decide on its agreement in accordance with Article 9a(9) of Regulation (EU) No 1093/2010.

(b) the following paragraph is inserted: ‘3a. This Regulation shall apply without prejudice to other Union acts conferring the functions of authorisation or supervision and corresponding powers upon the Authority.’; (c) paragraph 5 is amended as follows: (i) the first subparagraph is amended as follows: — the introductory part is replaced by the following: ‘5. The objective of the Authority shall be to protect the public interest by contributing to the short-, medium- and long-term stability and effectiveness of the financial system, for the Union economy, its citizens and businesses. The Authority shall, within its respective competences, contribute to:’; — points (e) and (f) are replaced by the following: ‘(e) ensuring that the taking of investment and other risks are appropriately regulated and supervised; (f) enhancing customer and investor protection;’; — the following point is added: ‘(g) enhancing supervisory convergence across the internal market.’; (ii) the second subparagraph is replaced by the following: ‘For those purposes, the Authority shall contribute to ensuring the consistent, efficient and effective application of the acts referred to in paragraph 2 of this Article, foster supervisory convergence, and provide opinions in accordance with Article 16a to the European Parliament, to the Council, and to the Commission.’; (iii) the fourth subparagraph is replaced by the following: ‘When carrying out its tasks, the Authority shall act independently, objectively and in a non-discriminatory and transparent manner, in the interests of the Union as a whole, and shall respect, wherever relevant, the principle of proportionality. The Authority shall be accountable and act with integrity and shall ensure that all stakeholders are treated fairly.’; (iv) the following subparagraph is added: ‘The content and form of the Authority’s actions and measures, in particular guidelines, recommendations, opinions, questions and answers, draft regulatory standards and draft implementing standards, shall fully respect the applicable provisions of this Regulation and of the legislative acts referred to in paragraph 2. To the extent permitted and relevant under those provisions, the Authority’s actions and measures shall, in accordance with the principle of proportionality, take due account of the nature, scale and complexity of the risks inherent in the business of a financial market participant, undertaking, other subject or financial activity, that is affected by the Authority’s actions and measures.’; (d) the following paragraph is added: ‘6. The Authority shall establish, as an integral part thereof, a Committee advising it as to how, in full compliance with applicable rules, its actions and measures should take account of specific differences prevailing in the sector, pertaining to the nature, scale and complexity of risks, to business models and practice as well as to the size of financial institutions and of markets to the extent that such factors are relevant under the rules considered.’;

(2) Article 2 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1. The Authority shall form part of a European system of financial supervision (ESFS). The main objective of the ESFS shall be to ensure that the rules applicable to the financial sector are adequately implemented to preserve financial stability and to ensure confidence in the financial system as a whole and effective and sufficient protection for the customers of financial services.’; (b) paragraph 4 is replaced by the following: ‘4. In accordance with the principle of sincere cooperation pursuant to Article 4(3) of the Treaty on European Union (TEU), the parties to the ESFS shall cooperate with trust and full mutual respect, in particular in ensuring the flow of appropriate and reliable information among them and from the Authority to the European Parliament, to the Council and to the Commission.’; (c) in paragraph 5, the following subparagraph is added: ‘Without prejudice to national competences, references in this Regulation to supervision shall include all relevant activities of all competent authorities to be carried out pursuant to the legislative acts referred to in Article 1(2).’;

(3) Article 3 is replaced by the following: ‘Article 3 Accountability of the Authorities

(4) in Article 4, point (3), point (ii) is replaced by the following: ‘(ii) with regard to Directive 2002/65/EC, the authorities and bodies competent for ensuring compliance with the requirements of that Directive by firms providing investment services and by collective investment undertakings marketing their units or shares;’;