Skip to main content
Home

ESMA

Extranet

Search form

Product Intervention

Product Intervention

The Markets in Financial Instruments Regulation (MiFIR) will introduce product intervention powers for national competent authorities (NCAs) and ESMA on 3 January 2018, when it enters into force.

Below we provide a brief explanation of the key features of these powers in the form of Frequently Asked Questions (FAQs).

    When will these powers be available?

    Product Intervention powers will be available on 3 January 2018, the date of the entry into application of the Markets in Financial Instruments Regulation No 600/2014 (MiFIR).

    Who will have Product Intervention powers?

    ESMA, under Article 40 of MiFIR, and National Competent Authorities, under Article 42 of MiFIR, will have intervention powers.

    The other two European Supervisory Authorities, namely the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) and their National Competent Authorities, will also have intervention powers under MiFIR for EBA and PRIIPs for EIOPA. The entry into application of the intervention powers for these authorities is also January 2018.

          Statement on Product intervention

    What are the differences between measures adopted by ESMA and measures adopted by National Competent Authorities?

    • Duration of the measure:

    Measures adopted by ESMA under Article 40 of MiFIR are temporary and cannot exceed 3 months. However, at the end of the 3 months, ESMA may renew a measure.

    Measures adopted by National Competent Authorities can be permanent.

    • Territorial scope of the measure:

    Measures adopted by ESMA apply across Member States in the same manner. This means that all market participants providing services in Europe must comply with the measures.

    Measures adopted by National Competent Authorities may apply to market participants established in the jurisdiction of the National Competent Authority adopting the measure as well as to market participants established in other Member States that carry out business in that jurisdiction.

    Product Intervention powers can be used against which type of entities?

    The entities to which these powers can be applied are firms authorised under Directive 2014/65/EU (MiFID) and credit institutions (i.e. banks) authorised under Directive 2013/36/EU (CRD).

     

    What are the financial products that can be subject to an intervention?

    Products that can be subject to a restriction are financial instruments as defined in MiFID such as shares, bonds, funds (UCITS funds or alternative investment funds), derivatives etc.

    What are the conditions to be met for the adoption of a measure by ESMA?

    First, the issue raises either:

    • A significant investor protection concern, or
    • A threat to the orderly functioning and integrity of financial markets or commodity markets, or
    • A threat to the stability of the whole or part of the financial system.

    Secondly

    • No regulatory requirements under Union law that are applicable to the financial instrument or activity do not address the threat/concerns mentioned above; and
    • No National Competent Authority has taken action to address the problem or the actions taken do not adequately address the problem.