ESMA updates its Q&As on MiFID II and MIFIR regarding investor protection

28 Oct 2019

The European Securities and Markets Authority ("ESMA") has published an updated version of its Questions and Answers ("Q&As") on the implementation of investor protection requirements under Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments ("MiFID II and MiFIR"). The Q&As update the answers on best execution-disclosure of reports to the public and other issues, in particular, a drafting change on understanding the term "ongoing relationship". 

 

With regards to a clarification on the Regulatory Technical Standards 27 and 28 reports, ESMA states that such reports must be made available to the public, without any charges, in a machine-readable electronic format.  Firms must ensure the readability and comprehensibility of the report, allowing the public to perform computerised calculations.

 

With regards to the meaning of the term “ongoing relationship”, ESMA states that it should have its ordinary meaning and be understood consistently in the context of all articles of the MiFID II or the Delegated Regulation enacted under MiFID II.  The term should apply to a client relationship that is continuing or has been so during the preceding year.  ESMA also provides a non-exhaustive, non-cumulative list of situations to determine the nature of the firm's relationship with the clients, such as where there is a portfolio management agreement in place or if there is an agreement for the firm to provide the client with a periodic assessment of suitability.

 

ESMA will continue to update the Q&As investor topics under MiFID II and MIFIR whenever required.

 

Feel free to contact us if you require an further clarifications on the updated version of these Q&As.

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