Tracker, Financial Services Regulation & Compliance - Investment Firms


Global Exchange Market set up under MiFID will now include listing of investment funds
Investment Managers will now have a choice of a new market to invest with when they are listing with the Irish Stock Exchange. In addition to the Main Securities Market, the Irish Stock Exchange has expanded the Global Exchange Market ('GEM') to include the listing of investment funds. The GEM was set up under the EU Markets in Financial Instruments Directive and, according to the Irish Stock Exchange, "currently lists 9,000 debt securities from around 50 countries".

ISE publish Q1 statistics for 2016 showing growth in securities and fund listings
The Irish Stock Exchange has published Quarterly Statistics for Q1 2016 which show almost 34,400 securities from over 4,000 issuers in 80 countries are currently on its markets. 1,389 new debt securities and 307 new investment funds were admitted in the first quarter of 2016.


European Supervisory Authorities propose Regulatory Technical Standards on Key Information Documents for Packaged Retail and Insurance-based Investment Products
Following a process of consultation and consumer testing, the European Supervisory Authorities have jointly published proposed cross-sectoral 'Key Information Documents' which will come into force on 31 December 2016, if endorsed by the EU Commission. The new rules aim to provide retail investors across the EU with simple and comparable information on investment products in the banking, insurance and securities sectors for the first time, thereby enhancing EU consumer confidence and protection. The new rules require information about the risks, performance and costs of products which must be included in 'Key Information Documents' in order to enable consumers to make more informed investment decisions. The rules set out a mandatory 3-page template for the 'Key Information Documents', including methodology, layouts for offering multiple options and rules on providing the document sufficiently early, and allowing time for a retail investor to take its contents into account when making its investment decision.

The EU Commission takes stock six months into the formation of the Capital Markets Union
The EU Commission has published the first Capital Markets Union status report listing the steps undertaken to date in order to implement the aims of its Capital Markets Union Action Plan published on 30 September 2015. The Capital Markets Union is an EU initiative to support the development of sources of finance alternative to bank financing. The status report assessed the EU financial services legislation to ensure it is supporting growth and stated that newly introduced rules for insurers and reinsurers are already having an impact. The EU Commission is hopeful that its proposal to restart the securitisation markets in Europe and a second proposal which seeks to simplify prospectus requirements and reduce burdens for those companies issuing shares and bonds can be passed quickly. Other initiatives planned include a public consultation on business restructuring and insolvency, a plan to take further action to promote personal pensions, a forthcoming report on the development of crowdfunding markets in the EU and a revision of the venture capital legislation. Finally, the EU Commission plans to launch a public consultation on how the passporting rules for the cross-border distribution of investment funds can be improved.

European Securities and Markets Authority publishes peer review on how national regulators assess compliance with MiFID's suitability requirements when firms provide investment advice to retail clients
ESMA has carried out a peer review of national regulators and found there is scope for more proactive supervisory approaches to be adopted and enforcement activities strengthened. The peer review does not specifically name which regulators were found to have deficiencies in these areas but the general findings were that only limited supervision was being performed to verify whether clients are receiving investment advice in practice or have the perception that they are receiving advice. Most regulators did not carry out supervisory activities targeted at the particular behaviour of a firm or group of firms as part of a specific suitability project and there were only a few regulators who provided specific information on the tools they use to supervise compliance with the suitability requirements. ESMA criticised the fact that enforcement action is rarely taken in this area and also stated that in many cases regulators could improve how they publicly communicate with stakeholders on their supervision and enforcement activities and findings.

For further information please contact a member of the Financial Regulation team

Date published: 04 May 2016