What changed between the draft committee report and the plenary report

Added:‘Classification as an eligible counterparty under the first subparagraph shall be without prejudice to the right of such entities to request, either on a general form or on a trade-by-trade basis, treatment as clients whose business with the investment firm is subject to Articles 24, 24a, 24b, 24c, 25, 27 and 28.’;

Added:(16) the following Article 35a is inserted:

Added:‘Article 35a

Added:Reporting of cross-border activities

Added:1. Member States shall require that investment firms and credit institutions providing investment services or activities report the following information annually to the competent authority of its home Member State when they provide cross-border services under the freedom of services or freedom of establishment to more than 50 clients on a cross-border basis:

Added:(a) the list of host Member States in which the investment firm is active through the freedom to provide services and activities following a notification pursuant to Article 34(2);

Added:(b) the type, scope and scale of services provided and activities carried out in each ▌Member State through the freedom to provide investment services and activities and ancillary services;

Added:(c) for each ▌Member State, the total number and the categories of clients corresponding to the services and activities referred to in point (b), and provided during the relevant period ending on the 31 December and a breakdown between professional and non-professional clients;

Added:(d) the number of complaints referred to under Article 75 received from clients and interested parties in each ▌Member State;

Added:(e) the type of marketing communications used in ▌Member States.

Added:Competent authorities shall communicate to ESMA all the information collected from investment firms.

Added:2. ESMA shall establish an electronic database containing the information collected pursuant to paragraph 1, which shall be made accessible to all competent authorities.

Added:3. ESMA shall develop draft regulatory technical standards on the details of the information referred to in paragraph 1 that is to be reported by investment firms to competent authorities.

Added:ESMA shall submit those draft regulatory technical standards to the Commission by [OJ: insert date 18 months after the date of entry into force].

Added:Power is delegated to the Commission to adopt the regulatory those technical standards in accordance with Article 10 of Regulation (EU) No 1095/2010.

Added:4. ESMA shall develop draft implementing technical standards specifying the data standards and formats, methods and transfer arrangements, frequency and starting date for the information to be reported.

Added:ESMA shall submit those draft implementing technical standards to the Commission by [OJ: insert date 18 months after the date of entry into force].

Added:Power is conferred on the Commission to adopt the implementing technical standards in accordance with Article 15 of Regulation (EU) No 1095/2010.

Added:5. Based on the information communicated pursuant to paragraph 2, ESMA shall publish every year a report containing anonymized and aggregated statistics on the investment services provided and the activities carried out in the Union through the freedom to provide investment services and activities, as well as an analysis of trends.’;

Added:(17) Article 69(2) is amended as follows:

Added:(-a) the following point is inserted:

Added:‘(ba) regularly check the alignment of the qualitative and quantitative features of the financial instrument on the market with the relevant benchmarks and, when necessary, take corrective actions in accordance with Article 69a;’;

Added:(a) the following point (ca) is inserted:

Added:‘(ca) carry out mystery shopping activities;’;

Added:(b) the following point (ka) is inserted:

Added:‘(ka) suspend or prohibit, for a maximum duration of 1 year, marketing communications or practices used by an investment firm in their Member State, where there are reasonable grounds to believe that this Directive or Regulation (EU) No 600/2014 have been infringed.’;

Added:(c) the following points (v) and (w) are inserted:

Added:‘(v) take all necessary measures, including by requesting a third party or other public authority to implement such measures, whether on a temporary or permanent basis, to:

Added:(i) remove content or restrict access to an online interface or order the explicit display of a warning to clients when they access an online interface;

Added:(ii) order a hosting service provider to remove, disable or restrict access to an online interface;

Added:(iii) order domain registries or registrars to delete a fully qualified domain name and to allow the competent authority concerned to register it.

Added:(w) to impose the use of risk warnings by investment firms in information materials, including marketing communications provided or made accessible to retail clients or potential retail clients, related to particularly risky or complex financial instruments where those instruments could pose a serious threat to investor protection.’;

Added:(wa) use webscraping techniques and tools to collect online data for monitoring, surveillance, detection and investigation purposes;’;

Added:(d) the following subparagraphs are added:

Added:‘When making use of the powers referred to in point (ka), the competent authority shall notify ESMA. Where such practices or communications are used in more than one Member State, ESMA shall, upon request of at least one competent authority, coordinate actions taken by competent authorities pursuant to point (ka).

Added:The implementation and the exercise of powers set out in this paragraph shall be proportionate and shall comply with Union and national law, including with applicable procedural safeguards and with the principles of the Charter of Fundamental Rights of the European Union. The investigation and enforcement measures adopted pursuant to this Directive shall be appropriate to the nature and the overall actual or potential harm of the infringement.’;

Added:(17a) the following article is inserted:

Added:‘Article 69a

Added:Benchmarks as a supervisory tool

Added:1. In accordance with Article 16-a, ESMA, on the basis of industry testing and after consulting EIOPA and the national competent authorities, shall, where appropriate, develop common European benchmarks for groups of comparable financial instruments manufactured and distributed in more than one Member State. The benchmarks shall represent reference points for comparable groups of investment products and shall be used by national competent authorities to perform the assessment of the qualitative and quantitative features of investment products manufactured or distributed by investment firms.

Added:ESMA shall regularly update those benchmarks, taking into account the developments on the market.

Added:In specific cases, when national specificities exist which have a direct impact on the key features of a product, such as the costs, performance and qualitative benefits, these shall be taken into account. For this purpose, national competent authorities shall communicate these to ESMA and shall provide guidance on how such features affect the benchmarks, including by providing a range of the impact that such features of the product have on the compliance with the benchmarks.

Added:When the investment product is manufactured and distributed in just one Member State, such product shall be subject to national benchmarks developed by the national competent authority of that Member State. ESMA shall, after consulting EIOPA, develop draft regulatory technical standards on the development of national benchmarks to ensure a harmonized approach within the Union, and shall periodically update those standards.

Added:ESMA shall submit those draft regulatory technical standards to the Commission by [18 months after the date of entry into force of this amending Directive].

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

Added:2. The benchmarks referred to in paragraph 1 shall serve the sole purpose of a supervisory tool for national competent authorities in order to facilitate identification of potential outliers among investment products on the market based on a risk-based approach and to allow them to conduct further inquiry when necessary.

Added:For this purpose, national competent authorities may engage in cooperation with the private sector in order to support their efforts in market screening.

Added:When using this power, national competent authorities shall regularly check the investment products on the market and compare them to the relevant benchmarks. If they identify products that deviate from the benchmark, they may require the investment firm to provide an explanation for that deviation and, if they consider that the explanation duly justifies the deviation, they shall conclude their inquiry with a positive assessment.

Added:If however, they consider that the explanation does not duly justify the deviation from the benchmark, they may require the investment firm to correct its approach and comply with the product governance requirements in Article 16-a to provide the consumer with the intended qualitative and quantitative features of the concerned investment product. If the company makes such correction, the national competent authorities shall conclude the inquiry with a positive assessment.

Added:Where an investment firm fails to provide an explanation or the explanation does not duly justify the deviation of the product from the benchmark and the company fails to align the qualitative and quantitative features of the product with the relevant benchmark, the national competent authorities may require the investment firm, as a measure of last resort, to remove that product off the market, if necessary.’;

Added:(18) in Article 70(3), point (a), the following points (xxxvii) to (xxxxii) are added:

Added:‘(xxxvii) Article 16-a(1) to (8);

Added:(xxxviii) Article 24(5a) to (5c) and (11a);

Added:(xxxix) Article 24a(1) to (2) and (6) to (7);

Added:(xxxx) Article 24b(1), (3) and (4);

Added:(xxxxi) Article 24c(1) to (5) and (7);

Added:(xxxxii) Article 35a(1);’;

Added:(19) Article 73(1) is amended as follows:

Added:(a) the first subparagraph is replaced by the following:

Added:‘Member States shall ensure that competent authorities establish effective mechanisms to enable reporting of potential or actual infringements of Regulation (EU) No 600/2014 and of the national provisions adopted in the implementation of this Directive to competent authorities, including by firms not duly authorised under this Directive.’;