European

ESMA and NCAs to conduct a CSA on conflicts of interest in the distribution of financial instruments in 2026

On 2 December 2025, the European Securities and Markets Authority (ESMA) announced that it will launch a common supervisory action (CSA) with NCAs on conflicts of interests in the distribution of financial instruments in 2026. The CSA will assess how investment firms comply with their obligations under MiFID II to identify, prevent and manage conflicts of interest when offering investment products to retail clients. The CSA will focus on:

• the possible impact of staff remuneration and inducements on what products are offered to investors
• the role of digital platforms in directing investors towards certain products, and whether this serves their best interests
• the ways firms manage potential conflicts between their own profits and the needs of retail investors

ESMA expects that this initiative, together with the exchange of practices among NCAs, will contribute to the consistent application of EU rules and strengthen investor protection in line with its objectives.

ESMA finalises technical standards on derivatives transparency and OTC derivatives tape

On 15 December 2025, ESMA published its final report on draft regulatory technical standards (RTS) under the MiFIR Review on derivatives trade transparency, package orders and the over-the-counter (OTC) derivatives consolidated tape input and output data.

This report addresses the following:

• The new MiFIR transparency regime for exchange-traded derivatives and OTC derivatives and corresponding amendments to Commission Delegated Regulation (EU) 2017/583 2 on transparency for non-equity instruments. This is based on the new scope of derivative subject to transparency. It sets out the approach for liquidity determination relevant for pre-trade waivers. It also introduces amendments to post trade transparency flags and fields.
• The new deferral regime for ETD and OTC derivatives.
• Final proposals to review Commission Delegated Regulation (EU) 2017/21943 (Package order RTS), which reflects the new scope of derivatives and liquidity determination.
• Final proposals from ESMA’s new mandate to develop RTS prescribing data quality requirements for prospective consolidated tape providers (CTPs) and data contributors.

The report has been submitted to the European Commission which has three months to decide whether to endorse the draft RTS. The new rules are expected to apply from 1 March 2027.

Date published: 21 January 2026

This publication provides an overview of certain legal and regulatory developments that may be of interest to certain entities. It does not purport to provide analysis of law or legal advice and is strictly for information purposes only.