On 4 February 2020, the European Securities and Markets Authority (ESMA) published its final report on product intervention requirements under MiFIR, following a formal request from the European Commission in May 2019 to provide technical advice on a number of technical issues stemming from MiFID II and MiFIR.
The key points of the technical advice include:
- a recommendation to the Commission to address the risk of arbitrage between MiFID firms and fund management companies;
- advice on how to improve convergence and the level playing field across the EU single market, through facilitating the transformation of temporary measures into permanent ones, and alternatively extend ESMA’s powers to allow the introduction of temporary bans for 18 months;
- a request for further clarification of the application of product intervention measures to firms acting on a cross-border basis;
- measures to facilitate the adoption by a national competent authority of a measure already adopted by ESMA; and
- a request for further clarification of the wording of Article 40(3) of MiFIR. ESMA would appreciate a further clarification of the wording of Article 40(3) of MiFIR to understand in which situations it would not be required to issue an opinion provided for in Article 43 of MiFIR.
The final report also contains a summary of the feedback received by ESMA to its September 2019 call for evidence on stakeholders’ practical experience of ESMA’s product intervention powers.
The technical advice has now been submitted to the European Commission.