ESMA provides guidance for supervision of cross-border activities of investment firms

The free provision of services in the EU rests on the supervision of the home NCA and on the cooperation between home and host supervisors. To this end, this briefing covers the following areas:

• authorisation of firms with cross-border plans;
• processing of passport notifications and their impact on the supervisory approach applied to firms;
• arrangements in place to carry out ongoing supervisory activities;
• carrying out of ongoing supervision; and
• carrying out of investigations and inspections.

Background

Given the importance of the provision of investment services across the EU under MiFID II, and concerns that emerged in the past on instances of cross-border activities provided to the detriment of investors’ interests, the Board of Supervisors of ESMA decided to launch in 2021 a peer review on the supervision of cross-border activities of investment firms.

On 10 March 2022, ESMA published a peer review report on the supervision of cross-border activities of investment firms. In its report, ESMA identified the need for home supervisors to significantly improve their approach in the authorisation, ongoing supervision and enforcement work, relating to investment firm’s cross-border activities to retail clients. This includes calibrating their supervisory work to the nature, scale and complexity of those firms’ cross-border activities and the risks they pose.

Next steps

This supervisory briefing will help promote supervisory convergence across the EU, in line with the recommendations made by ESMA in its peer review report.

Further information:

Solveig Kleiveland



✆ +33 (0)1 58 36 43 27

@ Email: press@esma.europa.eu