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Kristina Frunze

19 May 2017

Regulation Forex

ESMA orders EU officials to fully comply with MiFID investor protection rules


The key EU regulator, ESMA, orders NCAs to fully comply MiFID investor protection rules. The official start of MiFiD II rules implementation - January 2018.

19 May, AtoZForex The European Securities and Markets Authority (ESMA) has issued a follow-up report in regards to ten National Competent Authorities (NCAs). Specifically, the main European regulator has outlined the activities that have been carried about by the NCAs regarding deficiencies the regulated listed in the 2014 Peer Review on MiFID Conduct of Business rules. These rules are aiming at the provision of fair, transparent and clear information to the clients.

ESMA orders EU officials to fully comply with MiFID investor protection rules

The ESMA has published the follow-up regarding the ‘improvements in regulators’ supervisory practices concerning MiFID rules on fair, clear and not misleading information.’

According to the report, ESMA is favoring the efforts made by the most of all NCAs. The key aim of the investor protection rules under MiFID is the provision of the fair, transparent, and not misleading information to clients. Back in 2014, the Peer Review has concluded that the level of compliance with the ESMA practices was high. However, the regulator has noted:

‘Ten of the NCAs were not fully applying ESMA good practices relating to the effective application of MiFID investor protection rules, i.e. around organization, supervision, monitoring activities, thematic work and complaints handling.’

Furthermore, this follow-up report is stating that the NCAs from Lithuania, Latvia, Malta, Poland, Portugal, and Romania have fully addressed all of the deficiencies that were identified in the previous Peer Review.

Who needs to still comply with information provision practices?

Other NCAs still need to fulfill this requirement. Among the ones that have one pending deficiency to address are Denmark, Estonia, and Greece. Cyprus has more than one requirement to fulfill in order to fully comply with the good practices from ESMA.

The EU watchdog states that it believes that these NCAs will comply with the rules as soon as possible. As a matter of fact, the new MiFID2/MiFIR regime coming into force on 3rd January 2018.

The ESMA also mentions that it will continue to regularly check on the progress of NCAs implementation of Peer Reviews recommendations. See the original ESMA announcement here.

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