MiFID - Investor Protection

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The European Securities and Markets Authority (ESMA) has today issued two positive opinions on product intervention measures taken by the National Competent Authority (NCA) of Slovenia. ESMA’s opinion finds that the proposed measures are justified and proportionate and that it is necessary for NCAs of other Member States to take product intervention measures that are at least as stringent as ESMA’s measures. 

ESMA has issued two opinions on national product intervention measures from:
• The Agencija za trg vrednostnih papirjev of Slovenia (ATVP) - Opinion on the proposed product intervention measures relating to contracts for differences
• The Agencija za trg vrednostnih papirjev of Slovenia (ATVP) - Opinion on the proposed product intervention measure relating to binary options 

Background

NCAs may take product intervention measures in accordance with Article 42 of Regulation (EU) No 600/2014. At least one month before a measure is intended to take effect, an NCA must notify all other NCAs and ESMA of the details of its proposed measure and the related evidence, unless there is an exceptional case where it is necessary to take urgent action.

In accordance with Article 43 of Regulation (EU) No 600/2014, ESMA performs a facilitation and coordination role in relation to such product intervention measures taken by NCAs. After receiving notification from an NCA of its proposed measure, ESMA must adopt an opinion on whether the proposed measure is justified and proportionate. If ESMA considers that the taking of a measure by other NCAs is necessary, it must state this in its opinion.

The opinions that ESMA previously issued on proposed national product intervention measures are published on its website.

 

 

The European Securities and Markets Authority (ESMA) has published today data for the systematic internaliser calculations for equity, equity-like instruments and bonds under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

More specifically, ESMA has published the total number of trades and total volume over the period January-June 2019 for the purpose of the systematic internaliser (SI) calculations for 22,961 equity and equity-like instruments and for 333,459 bonds. 

The results are published only for instruments for which trading venues submitted data for at least 95% of all trading days over the 6-month observation period. The data publications also incorporate OTC trading to the extent it has been reported to ESMA. The publication includes data also for instruments which are no longer available for trading on EU trading venues at the end of December.

The publication of the data for the SI calculations for derivatives and other instruments has been delayed until 2020 at the latest, as set out in the updated plan announced by ESMA on 30 January 2019. The SI-assessment for those asset classes does not need to be performed until 2020 at the latest.

Background

According to Article 4(1)(20) of Directive 2014/65/EU (MiFID II) investment firms dealing on own account when executing client orders over the counter (OTC) on an organised, frequent systematic and substantial basis are subject to the mandatory SI regime.

Commission Delegated Regulation (EU) No 2017/565 specifies thresholds determining what constitutes frequent, systematic and substantial OTC trading. In particular, investment firms are required to assess whether they are SIs in a specific instrument (for equity and equity-like instruments, bonds, ETCs and ETNs and SFPs) or for a (sub-) class of instruments (for derivatives, securitised derivatives and emission allowances) on a quarterly basis based on data from the previous six months. For each specific instrument/sub-class, an investment firm is required to compare the trading it undertakes on its own account compared to the total volume and number of transactions executed in the European Union (EU). If the investment firm exceeds the relative thresholds it will be deemed an SI and will have to fulfil the SI-specific obligations. ESMA, upon request of market participants and on a voluntary basis, decided to compute the total volume and number of transactions executed in the EU in order to help market participants in the performance of the test since that data is essential for the operation of the SI regime and is not otherwise easily available. 

 

The European Securities and Markets Authority (ESMA), the EU securities markets’ regulator, will not renew the temporary restriction on the marketing, distribution or sale of contracts for differences to retail clients in the European Union (EU).

ESMA has taken product intervention measures relating to contracts for differences, imposing a temporary restriction on their marketing, distribution or sale, in Decisions (EU) 2018/796, (EU) 2018/1636, (EU) 2019/155 and (EU) 2019/679.

As most national competent authorities (NCAs) have taken permanent national product intervention measures relating to contracts for differences that are at least as stringent as ESMA’s measures, ESMA will not renew its temporary restriction.  As a result, the currently applicable measures in ESMA Decision (EU) 2019/679 will automatically expire at the end of the day on 31 July 2019.

ESMA will continue to monitor activities in relation to these and other related speculative products to determine whether any other EU-wide measures may be needed.

The European Securities and Markets Authority (ESMA) has today issued four opinions on product intervention measures taken by the following National Competent Authorities (NCAs) of Germany, Hungary, Malta and Poland. 

ESMA’s opinions in relation to Germany, Malta and Poland conclude that the proposed measures are justified and proportionate. ESMA’s opinion on the proposed measures by the KNF qualifies this conclusion in relation to the lower margin requirements in comparison to ESMA’s measures for a specific subset of Polish retail clients that meet certain conditions (experienced clients) and the territorial application of the national measures.

ESMA’s opinion regarding Hungary concludes that, while the national measures adequately protect retail clients when dealing with the specific providers to which the national measures apply, these measures are not justified and proportionate because they are addressed only to individual firms and do not have a general application.  

The four ESMA opinions also conclude that it is necessary for NCAs of other Member States to take product intervention measures that are at least as stringent as ESMA’s measures. In accordance with Article 43(3) of MiFIR if a competent authority takes actions contrary to an opinion adopted by ESMA, it shall immediately publish on its website a notice fully explaining its reasons for so doing.

Background

NCAs may take product intervention measures in accordance with Article 42 of Regulation (EU) No 600/2014. At least one month before a measure is intended to take effect, an NCA must notify all other NCAs and ESMA of the details of its proposed measure and the related evidence, unless there is an exceptional case where it is necessary to take urgent action.

In accordance with Article 43 of Regulation (EU) No 600/2014, ESMA performs a facilitation and coordination role in relation to such product intervention measures taken by NCAs. After receiving notification from an NCA of its proposed measure, ESMA must adopt an opinion on whether the proposed measure is justified and proportionate. If ESMA considers that the taking of a measure by other NCAs is necessary, it must state this in its opinion.

The opinions that ESMA previously issued on proposed national product intervention measures are published on its website.

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