On 2 February 2022, the European Securities and Markets Authority (ESMA) published a supervisory briefing to ensure convergence across the EU in the supervision of firms using tied agents, in particular those based outside the EU.
ESMA states that following the UK withdrawal from the EU, it has been monitoring the behaviour of firms in order to understand whether their interaction with EU-based clients is done in a way that is compliant with MiFIR and MiFID II. In this context, some practices concerning investment firms using tied agents recently emerged as a potential source of circumvention of the legal framework.
The supervisory briefing sets out ESMA’s and Member State competent authorities’ common understanding on the supervision of firms using tied agents to provide investment services and activities. The briefing covers supervisory expectations:
- when firms appoint tied agents; and
- on firms using tied agents in their on-going activities.
ESMA’s monitoring of the activities of market participants from the UK in the EU has shown that these briefings will aid the development of a convergent EU supervisory culture.