On January 31, the European Securities and Markets Authority (ESMA) published a consultation paper (the CP) containing draft technical standards on the reporting requirements for third-country firms who provide investment services and activities in the European Union (EU) under the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Directive (MiFIR).
ESMA is required to draft these technical standards following the amendments to MiFID II and MiFIR introduced by the Investment Firm Directive (the IFD) and the Investment Firms Regulation (the IFR) respectively.
The CP concerns two types of firms:
- firms who are accessing EU eligible counterparties and per se professional clients under Article 46 of MiFIR (i.e., on the basis of an equivalence determination (Equivalence Firms)), of which there are currently none because the European Commission has yet to make such a determination; and
- firms who are accessing the EU under Article 41 of MiFID II (i.e., as a branch (Branch Firms)).
Equivalence Firms must provide information to ESMA at the time of registration and continually on an annual basis. In the CP, ESMA proposes the detail of the information to be provided and some initial technical details regarding the format of that information.
Branch Firms must provide information, upon registration and on an annual basis, to the national competent authority (NCA) (i.e., the regulator) of the Member State in which it is established. The minimum information requirements are set out in MiFID II, and the NCA is free to impose higher standards if so desired. In the CP, ESMA proposes the format in which the information is to be provided, and notes the importance of aligning these requirements with those imposed on Equivalence Firms.
The CP is available here and the consultation closes on March 31.