The European Securities and Markets Authority (ESMA), the EU’s financial watchdog, believes it is too early to tell how well the EU’s new investment services rules have worked.
The new rules were part of Article 71(4) of Directive (EU) No 2014/65/EU on Markets in Financial Instruments (MiFID II). The updated rules to harmonize the investment services across the nations of the European Economic Area came into force in January 2018. Although, some countries implemented them later.
As part of the regulations, national competent authorities must annually provide ESMA with information on all sanctions and measures imposed. By doing so, the idea is that it would lead to better transparency around acceptable behaviours and act as a deterrent against bad activities.
Now ESMA has released its first annual report regarding these measures. The report reveals that there were 117 and 11 measures imposed in the last year.
However, the EU’s securities markets’ regulator now reports this data set is too small to allow for any clear observations on any trends regarding them.
Nevertheless, ESMA states it will continue to report about sanctions and measures on its website.
In related news, ESMA has called for evidence on certain investor protection topics, including the reports submitted to the European Commission (EC) under Article 90 of MiFID II.
The article stipulates that the EC shall consult with ESMA and then submit a report to the European Parliament and the European Council about how well MiFID II’s inducements disclosure requirements is doing.
ESMA will also look at the impact of the costs and charges disclosure requirements under MiFID II, including collecting information on whether and how the application of the rules varies across member states.
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