The German delegation still has some concerns as to how the uncovered position of sovereign credit default swaps was addressed in the compromise text, and would prefer to have a permanent ban on transactions that lead to uncovered position in these instruments.
STATE OF PLAY
Following the discussion at Coreper on 11 May 2011, there is now a very broad agreement on the Presidency compromise as set out in doc. 6823/3/11 EF 18 ECOFIN 82 CODEC 272 REV 3, which the Presidency considers the best achievable balance between the views expressed.
The UK delegation, supported by SE delegation, finds that Article 24 would not be a robust and legally watertight basis for ESMA to exercise the proposed powers. For this reason, the UK delegation considers that the role of the Council as a final decisionmaker in exceptional situations should be enhanced and clearly spelled out in the text (this could be done for example by basing the intervention powers to Article 18 of the ESMA Regulation). However on the other hand, a number of delegations have indicated that they can not accept any further changes to the current Presidency compromise proposal for Article 24.
The Commission for its part has expressed concerns that the intervention powers of ESMA with regard to sovereign debt instruments will depend on the consent of the relevant competent authority.
CONCLUSION
Against this background the Council is invited to:
- agree on the general approach with regard to the proposed Regulation, as set out in doc. 6823/3/11 EF 18 ECOFIN 82 CODEC 272 REV 3;
- invite the Presidency to start negotiations with the European Parliament on the basis of this general approach, with a view to reaching an agreement at first reading.
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