On 14 December 2022, the European Securities and Markets Authority (ESMA) published a supervisory briefing on the supervision of cross-border activities of investment firms.
On 10 March 2022, ESMA published a peer review report on the supervision of cross-border activities of investment firms. In its report, ESMA identified the need for home supervisors to significantly improve their approach in the authorisation, ongoing supervision and enforcement work, relating to investment firms’ cross-border activities to retail clients. This included calibrating their supervisory work to the nature, scale and complexity of those firms’ cross-border activities and the risks they pose.
The supervisory briefing now published has been designed for supervisors as an accessible introduction to the supervision of cross-border activities to retail clients by investment firms in accordance with MiFID II. It summarises the key elements of the rules and includes indicative questions that supervisors are expected to ask themselves, or a firm, when assessing the approach to the supervision of cross-border activities to retail clients of investment firms.
The supervisory briefing covers the following areas:
- authorisation of firms with cross-border plans;
- processing of passport notifications and their impact on the supervisory approach applied to firms;
- arrangements in place to carry out ongoing supervisory activities;
- carrying out of ongoing supervision; and
- carrying out of investigations and inspections.
The supervisory briefing will help promote supervisory convergence across the EU, in line with the recommendations made by ESMA in its peer review report.