Financial Services Regulation & Compliance - Investment Firms October 2018
CBI Issues Warning on Unauthorised Investment Firms
The CBI has re-iterated the fact that it is a criminal offence for an unauthorised firm/person to provide financial services in Ireland that would require an authorisation under the relevant legislation which the CBI is the responsible body for enforcing. The CBI has also stressed that consumers should also be aware, that if they deal with a firm/person who is not authorised, that they will not be eligible for compensation under the Investor Compensation Scheme.
CBI issues its Investment Firms Q&As 5th Edition
This document contains answers to queries which may arise in relation to the CBI Investment Firms Regulations, MiFID II and MiFIR. The updated Q&As contain an additional question and answer on whether restrictions on transferability bring securities outside the scope of the MiFID Regulations.
ESMA updates the Q&As on ESMA's temporary product intervention measures
The European Securities and Markets Authority (ESMA) has updated its Questions and Answers (Q&As) on ESMA's temporary product intervention measures on the marketing, distribution or sale of CFD's and binary options to retail clients based on Article 40 of Regulation (EU) No 600/2014 of MiFIR. The updated Q&As provide clarification on whether ESMA's product intervention measures in relation to Contracts for Differences (CFDs) also apply to rolling spot forex.
ESMA will focus on supervisory convergence and supervision in 2019
ESMA has published its 2019 Work Programme, which sets out its priorities and areas of focus for 2019 in support of ESMA’s mission to enhance investor protection and promote stable and orderly financial markets. ESMA will continue its focus on promoting supervisory convergence and assessing risks with a continued emphasis on the consistent implementation of MiFID II/MiFIR, but with an increased focus on utilising the data gathered under this regime to enable the meeting of stability, orderly markets and investor protection objectives.
Notice of ESMA’s Product Intervention Renewal Decision in relation to binary options
ESMA has adopted a Decision under Article 40 of Regulation (EU) No 600/2014 to prohibit the marketing, distribution or sale of binary options to retail clients. The Decision renews and amends ESMA Decision (EU) 2018/795.
Speech from Steven Maijoor, Chair of ESMA, "The state of implementation of MIFID II and preparing for Brexit"
In the first part of his speech Mr Maijoor focused on the current core project for European financial markets and therefore also for ESMA: MiFID II. In particular, Mr Maijoor addressed areas such as: MiFID II and trading venues outside the EU; the MifID II transparency regime; and the Double Volume Cap. In the second part of his speech Mr Maijoor discussed Brexit preparations in the context of trading and central clearing, and emphasised the importance of ensuring consistent application of regulatory standards to the relocation of activities from the UK to the EU, as well as improving third country agreements in securities markets legislation. Finally, he stressed the importance of preparing for a 'no deal' Brexit.
ESMA updates its opinion on ancillary activity calculations
ESMA has published an updated opinion on ancillary activity calculations, which provides guidance on the determination of the market size figures for the purposes of Article 2(3) if Delegated Regulation 2017/592. Article 2(3) of the Delegated Regulation lays down the rules for calculating overall market trading activity, a calculation which is used as part of the assessment of whether an activity is ancillary under MiFID. This updated opinion provides the estimation of the market size of commodity derivatives and emission allowances for the year 2017. ESMA has prepared those estimations based on data collected from trading venues as well as data reported to trade repositories under EMIR.
ESMA updates its Q&As on MiFID II and MiFIR commodity derivatives topics
ESMA has today updated its Q&As on Markets in Financial Instruments Directive (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) commodity derivatives topics. These Q&As provide clarification on issues related to the MiFID II/MiFIR regime for commodity derivatives, including on position limits, position reporting and ancillary activity.
ISDA publishes paper: "The impact of Brexit on OTC derivatives - Other 'cliff edge' effects under EU law in a 'no deal' scenario"
This Paper outlines the potential risks of a 'no deal' scenario, such as operational risks arising where EU 27 firms cannot remain as clearing members of UK Cooperative Engagement Plans (CEPs). The paper also outlines potential mitigating actions that should be considered by the Commission and other EU authorities in the event of a 'no deal' scenario.
ESMA Letter to European Commission on MiFID II/MiFIR Third-Country Regimes
ESMA has written to the European Commission in relation to additional issues concerning some MiFID II/MiFIR requirements on investor protection and intermediaries. The letter is a follow-up to an earlier letter concerning some MIFID II/MIFIR requirements regarding trading venues and also highlights a number of items, which are relevant in the context of the United Kingdom's withdrawal from the European Union. In particular, it concerns the MiFIR and MiFID regimes for third country firms providing investment services and activities to eligible counterparties and professional clients as well as third country firms providing investment services and activities at the exclusive initiative of EU clients.
MIFID II: ESMA issues latest Double Volume Cap Data
ESMA had updated its public register with the latest set of double volume cap (DVC) data under MiFID II. These updates include DVC data and calculations for the period of 1 September 2017 to 31 August 2018 as well as updates to already published DVC periods.
ESMA updates its contact points of national supervisory authorities for communication in MiFID II framework on supervisory cooperation, authorisation, acquisitions and passporting
This document provides information on contact points of national competent authorities (NCAs) to facilitate communication on the topics of:
- Cooperation and exchange of information between NCAs
- Consultation of other competent authorities prior to the authorisation of an investment firm
- Consultation process between relevant competent authorities in relation proposed acquisition in an investment firm
- Passporting of investment services
For further information please contact a member of the Financial Regulation team.
Date published: 8 November 2018