(1)

Regulation (EU, Euratom) 2024/2509 aligns in its Article 163(5), point (b), the rules laid down in that Regulation for financial services in connection with the issue, sale, purchase or transfer of securities or other financial instruments within the meaning of Directive 2014/65/EU of the European Parliament and of the Council (2) used by the Commission in the context of its borrowing and lending operations, with rules applicable to such services in Directive 2014/24/EU of the European Parliament and of the Council (3). Therefore, that Regulation aligns how the Commission acquires services needed to perform services which are critical for the autonomous and effective implementation of the Union budget with how the same activities are undertaken by Member States and other institutions. Consequently, Union rules on procurement, with the exception of the principles of transparency and equal treatment, are not to be applied to financial services acquired by the Commission for the conduct of its borrowing and lending operations.

(2)

Serving as lead manager or co-lead manager for syndicated transactions falls within the scope of financial services under Article 163(5), point (b), of Regulation (EU, Euratom) 2024/2509, and concerns directly the issue of Union debt securities. Article 13 of Commission Implementing Decision (EU) 2023/1602 (4) establishes the procedure for the selection of primary dealers that will serve as lead or co-lead members for syndicated transactions. Article 13(1) of Implementing Decision (EU) 2023/1602 provides that this selection is to be performed on the basis of a special negotiated procedure in accordance with Union procurement legislation. That Article 13(1) should be repealed to reflect the exemption from procurement rules for financial services acquired by the Commission for the conduct of its borrowing and lending operations.

(3)

Transparent and objective procedures for the selection of the syndicates will continue to be implemented by the Commission, based on Article 13(2) to (5) of Implementing Decision (EU) 2023/1602 and the supporting General Terms and Conditions as published on the Commission website and accepted by each primary dealer. These procedures will be implemented based on the operational manuals which specify in detail the manner in which the Commission services, responsible for the selection of syndicated banks, will carry out these processes. Therefore, the current highly structured process as defined in this decision and in the internal manual on syndicated transactions for syndicate (and co-lead) selection will continue to be implemented in order to ensure the transparency and equal treatment in syndicate selection procedures. This selection will now be organised outside of the legislative framework for procurement, and decisions will not need to be justified by strict reference to procurement legislation.

(4)

Pursuant to Article 163(5) of Regulation (EU, Euratom) 2024/2509, the rules on procurement laid down in that Regulation, with the exception of the principles of transparency and equal treatment, are not to apply to financial services. Accordingly, the negotiated procedure without prior publication of a contract notice would not be applied when selecting lead and co-lead managers for a syndicated transaction. As the primary dealers are to be remunerated through Union funds during syndicated transactions, the common rules, including the provisions applicable to the early detection and exclusion system, would continue to apply in relation to the members of the primary dealer network.

(5)

The membership of the primary dealer network constitutes an ongoing trusted continuous relationship between the EU and the members of the primary dealer network. Such a relationship requires the continued fulfilment of the eligibility criteria to serve as lead or co-lead managers through the fulfilment of commitments and additional undertakings performed by the members. At the same time, the members of the primary dealer network are supervised and licenced entities, which are subject to significant scrutiny under Union and national legislation by the competent authorities at the Member State as well as the Union level.

(6)

Primary dealers should notify the Commission immediately in the case of a material change of status related to their eligibility or any of the documents that they have submitted during their application to the primary dealer network or a subsequent update of such documentation. Primary dealers should also be required to notify the Commission of cases that could give rise to an exclusion situation. In addition to these requirements of immediate notification, the previous system based on the negotiated procedure without prior publication required that the primary dealers resubmit a part of their application documents annually. Continuing such practice would provide limited benefit in addition to the requirement to immediately notify while constituting a heavy documentation requirement. In order to ensure soundness and reliability of the primary dealer network, the primary dealers should be asked to confirm at least annually that the documents sumbitted during their application for membership, or a subsequent update, remain relevant, and to renew their submitted documentation at least every 3 years even in cases where there have not been substantial changes.

(7)

The occurrence of exclusion situations referred to in Article 138 of Regulation (EU, Euratom) 2024/2509 of a primary dealer should be assessed in line with the respective rules set out therein. At the same time, it is appropriate to recognise, for the purposes of the assessment of an actual or potential exclusion situation, that the ongoing continuous relationship and balance of rights and undertakings of the primary dealership, as well as the close link between primary dealership and debt issuance capacity of the Union constitute a comparable situation to the one where there exists a continual legal commitment between the Union and a beneficiary. In that situation, the legal commitment continues to be carried out until terminated. In the same vein, it is appropriate allowing the continuation of eligibility of a primary dealer to serve as lead or co-lead manager even if an actual or potential exclusion situation occurs.

(8)

Considering that the current system of suspending primary dealers, as provided for in Implementing Decision (EU) 2023/1602 has not proven efficient in practice, it should be amended and made fit for purpose. Since primary dealers have to continually fulfil their obligations as members of the primary dealer network in order to remain eligible on an ongoing basis to serve as lead or co-lead members in syndicated transactions, suspension of a primary dealer from the network would have the same effect as termination of their membership. For this reason, it would be appropriate to make the suspension process distinct and to direct it towards cases where there might be a time sensitive and serious threat to the financial interests of the Union that could not be addressed through an assessment and exclusion of a primary dealer. The primary dealers concerned should be allowed to express their observations and objections. In exceptional cases, this could take place after the suspension, which could then be lifted based on their submitted information.

(9)

In the case of a suspension or decision on termination of membership in relation to an entity that serves as a primary dealer, the Commission would have to assess the effect that the suspension or termination of membership would have on the continuity of business of the primary dealer network and the proportionality of such a suspension or termination of membership.

(10)

Implementing Decision (EU) 2023/1602 should therefore be amended.

(1)

in Article 5(1)(e), point (iii) is replaced by the following:

(*1)  Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj).’;"

(2)

in Article 7(d), point (ii) is replaced by the following:

(3)

Article 13 is amended as follows:

(4)

in Article 15, paragraph 4 is replaced by the following:

(5)

the following Article 16a is inserted:

(6)

Article 17 is replaced by the following: