On 21 March 2018, the European Securities and Markets Authority (ESMA) published the opening remarks given by its chairman, Steven Maijoor at the BVI 2018 Annual Reception.

In his speech Mr Maijoor covers:

  • Brexit and the issue around ESMA’s work on delegation. Mr Maijoor explains that the ESMA opinions are seeking to address the risk of letterbox entities and clarifies that ESMA is not looking to question, undermine or put in doubt the delegation model which the European Supervisory Authority (ESA) accepts is a key feature of the investment funds industry;
  • MiFID II transparency costs and charges. Mr Maijoor states that he believes that the changes to cost transparency introduced by MiFID II and MiFIR are already having a positive impact;
  • PRIIPs. On the question of whether to include disclosure of transaction costs, Mr Maijoor thinks that it is only fair that investors are fully informed about something that can have a material impact on their returns, especially when the impact can vary significantly across different products. On the methodology for calculation, Mr Maijoor states that ESMA is willing to look at this issue in light of the extensive media coverage of supposed flaws but that it needs to see concrete evidence that the flaws are real. In the absence of such evidence, ESMA maintains its view that the methodology is sound and that negative transaction cost figures should be extremely rare; and
  • CMU/ESAs review. Mr Maijoor sees no reason to change the governance principles around ESMA Q&As but this does not mean that the ESA should not explore ways to improve its stakeholder management.