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|22/12/2015||2015/1872||Press Release Cross Selling Guidelines||MiFID - Investor Protection||Press Release||PDF
The European Securities and Markets Authority (ESMA) has published its Guidelines on Cross-Selling Practices under MiFID II (guidelines) to ensure investors are treated fairly when an investment firm offers two or more financial products or services as part of a package.
The guidelines include principles on:
The European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA - initially intended to issue joint guidelines covering all cross-selling practices taking place in the banking, insurance and securities sectors given that cross-selling is often cross-sectoral, and had consulted the stakeholders previously on this basis.
However, in light of legal concerns, the ESAs decided not to issue joint guidelines on cross-selling practices but agreed that ESMA should issue ESMA-only guidelines under MiFID II in order to meet its 3 January 2016 deadline.
While ESMA’s guidelines take into account the results of the ESAs’ joint consultation, the final report focuses on the feedback regarding cross-selling practices under MIFID II. Further, the guidelines are addressed to national regulators supervising the firms which provide MiFID services, when they engage in cross-selling practices.
The ESAs intend to inform the European Commission about the issues encountered and raise the possibility of legislative change to provide a foundation for future joint guidelines.
The guidelines will apply from 3 January 2017.
|25/02/2015||2015/495||ESMA publishes review on best execution supervisory practices under MiFID||MiFID - Investor Protection, Press Releases, Supervisory convergence||Press Release||PDF
|The European Securities and Markets Authority (ESMA) has conducted a peer review on how national regulators (national competent authorities or NCAs) supervise and enforce the MiFID provisions relating to investment firms’ obligation to provide best execution, or obtain the best possible result, for their clients when executing their orders. ESMA found that the level of implementation of best execution provisions, as well as the level of convergence of supervisory practices by NCAs, is relatively low. In order to address this situation a number of improvements were identified, including: . prioritisation of best execution as a key conduct of business supervisory issue; . the allocation of sufficient resources to best execution supervision; and . a more proactive supervisory approach to monitoring compliance with best execution requirements, both desk-based and onsite inspections. The review was conducted on the basis of information provided by 29 NCAs and complemented by on-site visits to the NCAs of France, Liechtenstein, Luxembourg, Malta, Poland and Spain.|
|22/05/2015||2015/884||Press Release- ESMA calls for modification of UCITS Directive||Fund Management, Press Releases||Press Release||PDF
|19/07/2016||2016/1138||ESMA advises on extension of funds passport to 12 non-EU countries||Fund Management||Press Release||PDF
|25/07/2016||2016/1167||Press release- ESMA issues warning on sale of speculative products to retail investors||MiFID - Investor Protection||Press Release||PDF
|02/02/2016||2016/138||ESMA updates on supervisory work on closet index tracking||Fund Management, Press Releases||Press Release||PDF
The European Securities and Markets Authority (ESMA) has published a Statement providing details of its work on closet index tracking funds.
Closet indexing, also known as index hugging, refers to the practice of fund managers claiming to manage portfolios actively when in reality the fund stays close to a benchmark. ESMA is concerned the practice may harm investors as they are not receiving the service or risk/return profile they expect based on the fund’s disclosure documents while potentially paying higher fees compared to those typically charged for passive management.
ESMA conducted research on a sample of 2,600 funds for the period 2012-2014 to determine whether it could find any indication of closet indexing at an EU-wide level. Quantitative metrics, such as the percentage of a UCITS’ portfolio that does not coincide with the underlying equity benchmark, indicated between 5 and 15% of UCITS equity funds could potentially be closet indexers. ESMA then reviewed the investor disclosure documents of the funds concerned, to see how they described their management strategy, and found they tended to confirm the quantitative analysis results.
|30/09/2016||2016/1411||ESMA consults on future reporting rules for securities financing transactions||Post Trading, Press Releases, Securities Financing Transactions||Press Release||PDF
The European Securities and Markets Authority (ESMA) has issued today a consultation paper on draft technical standards implementing the Securities Financing Transaction Regulation (SFTR), which aims to increase the transparency of shadow banking activities. Securities financing transactions (SFTs) are transactions where securities are used to borrow cash (or other higher investment-grade securities), or vice versa – this includes repurchase transactions, securities lending and sell/buy-back transactions.
|05/10/2016||2016/1438||ESMA consults on product governance guidelines to safeguard investors||MiFID - Investor Protection, Press Releases||Press Release||PDF
|21/11/2016||2016/1586||Questions and Answers on UCITS Directive||Fund Management||Q&A||PDF
|16/12/2016||2016/1669||2016-1669 Q&A on AIFMD||Fund Management||Q&A||PDF
|21/12/2016||2016/1682||2016-1682 Press Release on Feedback Statement on ESEF||Corporate Disclosure, European Single Electronic Format, Press Releases, Transparency||Press Release||PDF
|31/03/2016||2016/472||ESMA publishes UCITS remuneration guidelines||Fund Management, Press Releases||Press Release||PDF
The European Securities and Markets Authority (ESMA) has published its final Guidelines on sound remuneration policies under the UCITS Directive and AIFMD. ESMA has also written to the European Commission, European Council and European Parliament on the proportionality principle and remuneration rules in the financial sector.
UCITS Remuneration Guidelines
The UCITS Remuneration Guidelines provide clarity on the requirements under the UCITS Directive for management companies when establishing and applying a remuneration policy for key staff. The Guidelines will ensure a convergent application of these provisions and provide guidance on the governance of remuneration, requirements on risk alignment and disclosure. The Guidelines will apply to UCITS management companies and national competent authorities from 1 January 2017.
ESMA, while finalising its UCITS Remuneration Guidelines, had to balance the alignment with the AIFMD Remuneration Guidelines and the obligation to closely cooperate with the European Banking Authority (EBA) in order to ensure consistency with requirements developed for other financial services sectors, in particular credit institutions and investment firms.
The UCITS Directive prescribes that proportionality shall apply to the full set of remuneration principles set out under this Directive. However, the Guidelines do not include guidance on the possibility of dis-applying certain specific requirements on the pay-out process. This follows recent work and legal analysis, including the EBA’s Guidelines under CRD IV, which have called into question the existing understanding that the proportionality provisions as set out under the UCITS Directive and AIFMD may lead to a result:
ESMA considers that these scenarios should remain possible in certain situations and, in its letter to the European institutions, suggests that further legal clarity on this possibility could be beneficial to all the interested parties. Legislative changes in the relevant asset management legislation could be one way to further clarify the applicable regulatory framework.
ESMA believes that it would be inappropriate for the following fund managers to be subject in all circumstances to the requirements on the pay-out process:
ESMA also considers that it would be disproportionate to apply the requirements to relatively small amounts of variable remuneration and to apply certain requirements to certain staff when this would not result in an effective alignment of interests between the staff and the investors in the funds.
AIFMD Remuneration Guidelines
The amended AIFMD guidelines will come into force on 1 January 2017. The amendment to the AIFMD guidelines relates to the section of these guidelines dealing with the application of the remuneration rules in a group context and is intended to acknowledge the potential outreach of the CRD rules in a banking group.
The current AIFMD Guidelines will not be amended to bring them into line with the UCITS Guidelines pending clarification on the application of the proportionality principle.
The Guidelines in Annexes III and IV will be translated into the official languages of the European Union and the final texts published on the ESMA website. The deadline for compliance notifications will be two months after the publication of the translations.
|30/11/2021||2016/572||Compliance table- Guidelines on key concepts of the AIFMD||Fund Management, Guidelines and Technical standards||Compliance table||PDF
|07/04/2016||2016/582||ESMA finds room for improvement in national supervision of investment advice to retail clients||MiFID - Investor Protection, Press Releases, Supervisory convergence||Press Release||PDF
|04/11/2022||2016/602||Compliance table- Guidelines on ETFs and other UCITS issues||Fund Management, Guidelines and Technical standards||Compliance table||PDF
|04/05/2016||2016/675||Compliance table- Guidelines on sound remuneration policies under the AIFMD (ESMA/2013/232)||Fund Management, Guidelines and Technical standards||Compliance table||PDF
|02/06/2016||2016/743||ESMA assesses usefulness of distributed ledger technologies||Innovation and Products, Press Releases, Risk Analysis & Economics - Markets Infrastructure Investors||Press Release||PDF
|31/05/2016||2016/774||Q&A on the Application of the EuSEF and EuVECA Regulations||Fund Management||Q&A||PDF
|02/06/2016||2016/903||ESMA reminds firms of responsibilities when selling bail-in securities||MiFID - Investor Protection||Press Release||PDF
|18/12/2017||ESMA 71-99-670||New rules make EU issuers’ annual financial reports machine-readable||European Single Electronic Format||Press Release||PDF