What is ESMA and MiFID?

What is ESMA and MiFID?

The European Securities and Markets Authority (ESMA) has published today its final technical advice (TA) and launches a consultation on its draft regulatory technical and implementing standards (RTS/ ITS) regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

Are ESMA guidelines legally binding?

This is also true for guidelines and recommendations published by ESMA on the grounds of Article 16(1) ESMA Regulation. Though these instruments aim to achieve a “common, uniform and consistent” application of Union law, they are not legally binding.

What is ESMA in UK?

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has announced today its decision to extend the application of the recognition decisions under Article 25 of EMIR (Regulation (EU) 648/2012) for the three CCPs established in the United Kingdom.

What is an ESMA common supervisory action?

The CSA contributes to fulfilling ESMA’s mandate on building a common supervisory culture among NCAs to promote sound, efficient, and consistent supervision throughout the EU. ESMA’s promotion of supervisory convergence is done in close cooperation with NCAs.

What are MiFID regulations?

The Markets in Financial Instruments Directive (MiFID) is a European regulation that increases the transparency across the European Union’s financial markets and standardizes the regulatory disclosures required for firms operating in the European Union.

Does MiFID apply to UK after Brexit?

Mifid II will have some of its ‘rough edges smoothed off’ in post-Brexit Britain, but there is no appetite to completely tear up the EU’s protection for investors in UK law, according to regulator the Financial Conduct Authority (FCA).

Do ESMA guidelines apply to UK?

As the ESMA Prospectus Guidelines did not become effective before the end of the Brexit transition period, they do not apply in the UK.

What are regulatory technical standards?

By definition, a regulatory technical standard “is a delegated act, technical, prepared by a European Supervisory Authority. It should further develop, specify and determine the conditions for consistent harmonisation of the rules included in the basic legislative act.”

What MiFID means?

The Markets in Financial Instruments Directive (MiFID) was created in 2004 to replace the Investment Services Directive, and it was implemented in 2007.

Who does ESMA supervise?

ESMA has direct supervisory powers in two areas: Credit Rating Agencies and Trade Repositories.

What is the ESMA register?

ESMA fulfils its mission to enhance investor protection and promote stable and orderly financial markets by facilitating access to relevant registers and statistical data for market participants, regulators and the general public.

What is MiFID II regulation in simple terms?

MiFID II improvements The rules governing high-frequency-trading impose a strict set of organisational requirements on investment firms and trading venues, and the provisions regulating the non-discriminatory access to central counterparties (CCPs), trading venues and benchmarks are designed to increase competition.

What is supervisory convergence?

Supervisory convergence does not mean a one-size fits all approach. It means that ESMA promotes the consistent and effective implementation and application of the same rules and using sufficiently similar approaches for similar risks. The overall goal is to strive for comparable regulatory and supervisory outcomes.

What is the difference between MiFID and MiFID 2?

The main difference between MiFID and MiFIR is that the directive (MiFID) sets out the goals that EU member states should strive to meet, whereas the regulation (MiFIR) imposes rules that all countries must follow. MiFID II is a legislative act that sets out goals that all countries in the EU need to achieve.

What are the MiFID classifications?

MiFID introduces a new client classification regime and distinguishes between three types of clients: “retail clients”, “professional clients” and “eligible counterparties”.

Who is subject to MiFID?

In general, any (natural or legal) person that deals on own account or provides investment services in commodity derivatives as a regular occupation or business on a professional basis pursuant to Article 5 of MiFID II has to be authorised as an investment firm under MiFID II.

Whats the difference between Emir and MiFID?

MiFID II and EMIR share the regulatory coverage of the OTC derivatives market. While MiFID II introduces a trade obligation for OTC derivatives as part of its market structure related measures, EMIR addresses the duty for central clearing. In this case, both regulations complement each other.

Are UK firms still subject to MiFID?

Until the UK formally withdraws from the European Union, EU law such as MiFID I will continue to apply, and firms should continue to work on implementation of new EU legislation such as MiFID II.

Does UK still follow MiFID?

Following the on-shoring of EU legislation post-Brexit, UK MiFID is now spread across primary and secondary legislation, the FCA’s Handbook and regulatory technical standards.