On 13 July 2023, the European Securities and Markets Authority (ESMA) published a follow-up report to the peer review on certain aspects of the compliance function under MiFID I.
The report provides an update on the actions certain Member State competent authorities (NCAs) have undertaken following the 2017 peer review report on certain aspects of the compliance function under MiFID I.
In 2012, ESMA published guidelines to clarify the application of certain aspects of the MiFID I compliance function requirements, in order to promote the effective and consistent performance of this function and enhance the related NCAs’ supervisory approach. Since then, MiFID II was adopted and ESMA updated its guidelines in 2020. While the objectives of the compliance function as well as the key principles underpinning the regulatory requirements have remained unchanged, the obligations have been further strengthened, broadened and detailed under MiFID II.
The report shows that all NCAs have made progress since the peer review in addressing points of partial or insufficient compliance.
As the compliance function remains a key element to promote sound and compliant behaviour by firms, ESMA notes that all NCAs should continue monitoring the effective application of the guidelines and the effectiveness of the supervisory practices implemented, taking supervisory action when needed.