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1. This Regulation establishes a European Supervisory Authority (European Banking Authority) (hereinafter ‘the Authority’).
2. The Authority shall act within the powers conferred by this Regulation and within the scope of, Directive 2002/87/EC, Directive 2008/48/EC (), Directive 2009/110/EC, Regulation (EU) No 575/2013 of(), theDirective European2013/36/EU Parliament(), andDirective of2014/49/EU the Council (), Directive 20132014/3692/EU (), Directive (EU) 2015/2366 () of the European Parliament and of the Council ()and, to the extent that those acts apply to credit and financial institutions and the competent authorities that supervise them, within the relevant parts of Directive 20142002/4965/EUEC, ofincluding theall Europeandirectives, Parliamentregulations, and decisions based on those acts, and of any further legally binding Union act which confers tasks on the Authority. The Authority shall also act in accordance with Council Regulation (EU), No 1024/2013 ().
The Authority shall also act within the powers conferred by this Regulation and within the scope of Directive (EU) 2015/847849 of the European Parliament and of the Council (), Directiveand of Regulation (EU) 2015/2366847 of the European Parliament and of the Council () and, to the extent that thosethat actsDirective and Regulation apply to credit and financial institutionssector operators and the competent authorities that supervise them. For that purpose only, withinthe Authority shall carry out the relevanttasks partsconferred ofby Directiveany 2002/65/EClegally binding Union act on the European Supervisory Authority (European Insurance and DirectiveOccupational Pensions Authority), established by Regulation (EU)2015 No 1094/8492010 of the European Parliament and of the Council (), includingor allon directives,the regulations,European andSupervisory decisionsAuthority based(European onSecurities thoseand actsMarkets Authority), andestablished ofby anyRegulation further(EU) legallyNo binding1095/2010 Unionof actthe whichEuropean confersParliament tasksand onof the AuthorityCouncil (). TheWhen carrying out such tasks, the Authority shall alsoconsult actthose European Supervisory Authorities and keep them informed of its activities concerning any entity which is a ‘financial institution’ as defined in accordancepoint with(1) Councilof Article 4 of Regulation (EU) No 10241094/20132010 or a ‘financial market participant’ as defined in point (1) of Article 4 of Regulation (EU) No 1095/2010.
3. The Authority shall also act in the field of activities of credit institutions, financial conglomerates, investment firms, payment institutions and e-money institutions in relation to issues not directly covered inby the legislative acts referred to in paragraph 2, including matters of corporate governance, auditing and financial reporting, providedtaking thatinto suchaccount actionssustainable bybusiness models and the Authorityintegration of environmental, social and governance related factors, provided that such actions are necessary to ensure the effective and consistent application of those acts.
4. The provisions of this Regulation are without prejudice to the powers of the Commission, in particular pursuant to Article 258 TFEU, to ensure compliance with Union law.
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:
(a) improving the functioning of the internal market, including, in particular, a sound, effective and consistent level of regulation and supervision;
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(d) preventing regulatory arbitrage and promoting equal conditions of competition;
(e) ensuring that the taking of credit and other risks are appropriately regulated and supervised; and
(f) enhancing customer and consumer protection;
(g) enhancing supervisory convergence across the internal market; and
(h) preventing the use of the financial system for the purposes of money laundering and terrorist financing.
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, theto Council and the CommissionCouncil, and undertake economic analyses of the markets to promote the achievement of the Authority's objectiveCommission.
In the exercise of the tasks conferred upon it by this Regulation, the Authority shall pay particular attention to any systemic risk posed by financial institutions, the failure of which may impair the operation of the financial system or the real economy.
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, where relevant, the principle of proportionality. The Authority shall be accountable and act with integrity and shall ensure that all stakeholders are treated fairly.
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 institution, undertaking, other subject or financial activity, that is affected by the Authority’s actions and measures.
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.
Article 2 European System of Financial Supervision
1. The Authority shall form part of a European Systemsystem of Financialfinancial Supervisionsupervision (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 and consumers of financial services.
2. The ESFS shall comprise the following:
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3. The Authority shall cooperate regularly and closely with the ESRB as well as with the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) through the Joint Committee, ensuring cross-sectoral consistency of work and reaching joint positions in the area of supervision of financial conglomerates and on other cross-sectoral issues.
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 betweenamong them and from the Authority to the European Parliament, to the Council and to the Commission.
5. Those supervisory authorities that are party to the ESFS shall be obliged to supervise financial institutions operating in the Union in accordance with the acts referred to in Article 1(2).
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).
Article 3 Accountability of the Authorities
1. The Authorities referred to in points (a) to (d) of Article 2(2) shall be accountable to the European Parliament and to the Council. The European Central Bank shall be accountable to the European Parliament and to the Council with regard to the exercise of the supervisory tasks conferred on it by Regulation (EU) No 1024/2013 in accordance with that Regulation.
2. In accordance with Article 226 TFEU, the Authority shall fully cooperate with the European Parliament during any investigation carried out under that Article.
3. The Board of Supervisors shall adopt an annual report on the activities of the Authority, including on the performance of the Chairperson’s duties, and shall, by 15 June each year, 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. The report shall be made public.
4. At the request of the European Parliament, the Chairperson shall participate in a hearing before the European Parliament on the performance of the Authority. A hearing shall take place at least annually. The Chairperson shall make a statement before the European Parliament and answer any questions from its members, whenever so requested.
5. The Chairperson shall report in writing on the activities of the Authority to the European Parliament when requested and at least 15 days before making the statement referred to in paragraph 4.
6. In addition to the information referred to in Articles 11 to 18 and Articles 20 and 33, the report shall also include any relevant information requested by the European Parliament on an ad hoc basis.
7. The Authority shall reply orally or in writing to any question addressed to it by the European Parliament or by the Council within five weeks of its receipt.
8. Upon request, the Chairperson shall hold confidential oral discussions behind closed doors with the Chair, Vice-Chairs and Coordinators of the competent committee of the European Parliament. All participants shall respect the requirements of professional secrecy.
9. Without prejudice to its confidentiality obligations stemming from participation in international fora, the Authority shall inform the European Parliament upon request about its contribution to a united, common, consistent and effective representation of the Union’s interests in such international fora.
Article 4 Definitions For the purposes of this Regulation the following definitions apply:
(1) ‘financial institutionsinstitution’ means creditany institutionsundertaking asthat definedis insubject pointto (1)regulation ofand Articlesupervision 4(1)pursuant ofto Regulationany (EU)of Nothe 575/2013,legislative investmentacts firmsreferred asto defined in pointArticle 1(2) of Article 4;
(11a) of‘financial Regulationsector (EU)operator’ Nomeans 575/2013,an financial‘entity’ conglomerates as definedreferred to in Article 2(14) of Directive 2002(EU) 2015/87/EC849, paymentwhich serviceis providerseither a financial institution as defined in point (111) of this Article 4or of Directive (EU) 2015/2366 and electronic money institutions as defined in point (1) of Article 24 of DirectiveRegulation 2009/110/EC, save that, with regard to Directive (EU) 2015No 1094/849,2010 ‘financialor institutions’a means credit institutions and ‘financial institutionsmarket participant’ as defined in pointspoint (1) and (2) of Article 34 of DirectiveRegulation (EU) 2015No 1095/8492010;
(2) ‘competent authorities’ means:
(i) competent authorities as defined in point (40) of Article 4(1) of Regulation (EU) No 575/2013, including the European Central Bank with regard to matters relating to the tasks conferred on it by Regulation (EU) No 1024/2013,;
(ii) inwith regard to Directive 20072002/6465/EC, the authorities and asbodies referredcompetent tofor inensuring compliance with the requirements of that Directive 2009/110/ECby financial institutions;
(iiiii) with regard to DirectivesDirective 2002/65/EC(EU) and 20052015/60/EC849, the authorities and bodies that supervise financial sector operators and are competent for ensuring their compliance with the requirements of thosethat Directives by credit and financial institutionsDirective;
(iiiiv) with regard to deposit guarantee schemes, bodies which administer deposit guarantee schemes pursuant to Directive 2014/49/EU of the European Parliament and of the Council (), or, where the operation of the deposit guarantee scheme is administered by a private company, the public authority supervising those schemes pursuant to that Directive;, and relevant administrative authorities as referred to in that Directive;
(ivv) with regard to Directive 2014/59/EU of the European Parliament and of the Council () and to Regulation (EU) No 806/2014 of the European Parliament and of the Council (), the resolution authorities, defineddesignated in accordance with Article 3 of Directive 2014/59/EU, the Single Resolution Board, established by Regulation (EU) No 806/2014, and the Council and the Commission when taking actions under Article 18 of Regulation (EU) No 806/2014, except where they exercise discretionary powers or make policy choices;
(vi) ‘competent authorities’ as referred to in Directive 2014/17/EU of the European Parliament and of the Council (), in Regulation (EU) 2015/751 of the European Parliament and of the Council (), in Directive (EU) 2015/2366, in Directive 2009/110/EC of the European Parliament and of the Council (), and in Regulation (EU) No 260/2012 of the European Parliament and of the Council ();
(vii) ‘bodies and authorities’ as referred to in Article 20 of Directive 2008/48/EC.
Article 5 Legal status
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