THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national Parliaments,

Having regard to the opinion of the European Economic and Social Committee [OJ C 209, 30.6.2017, p. 28.],

Having regard to the opinion of the European Central Bank [OJ C 372, 1.11.2017, p. 6.],

Acting in accordance with the ordinary legislative procedure [Position of the European Parliament of 27 March 2019 (not yet published in the Official Journal) and Position of the Council at first reading of 17 November 2020 (not yet published in the Official Journal). Position of the European Parliament of 14 December 2020 (not yet published in the Official Journal).],

Whereas:

(1) Financial markets are pivotal for the functioning of modern economies. The more integrated they are, the greater the potential for efficient allocation of economic resources will be, potentially benefitting economic performance. However, in order to improve the functioning of the single market in financial services, it is important to have procedures in place to deal with effects of market turmoil and to ensure that if a financial institution or a financial market infrastructure that is active in this market faces financial distress or is at the point of failure, such an event does not de-stabilise the entire financial market and damage growth across the wider economy.