ESMA updated question and answer (Q&A) documents on the European Markets Infrastructure Regulation (EMIR), temporary product intervention measures of ESMA in relation to contracts for differences (CFDs) and binary options, and the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/MiFIR).
The updates include the following:
- Q&A on EMIR— The updates cover amendments to the existing General Q&A on identification of counterparties to a derivative, also confirming that a portfolio manager could be a counterparty to a derivative when entering into a derivative on its own account and own behalf. It also includes amendments to the existing trade repositories Q&A on Legal Entity Identifier (LEI), which simplify the description of the existing process. The amendments also explain other processes trade repositories should follow in scenarios where the reports must be updated in relation to the LEI. A new case for reporting derivatives has also been added to the Part IV of the Q&A, which explains the procedure for reporting to trade repositories in a transaction scenario involving portfolio management companies.
- Q&A on product intervention measures—ESMA updated Q&A on temporary product intervention measures of ESMA on the marketing, distribution or sale of CFDs and binary options to retail clients based on Article 40 of MiFIR. The Q&A provides clarification on the application of the temporary product intervention measures on clients established outside the Union and non-Union nationals.
- Q&A on MiFID/MiFIR—The updates include new Q&As on the topics of inducements (research) and provision of investment services by thir- country firms. The overall MiFID II Q&A provide clarifications on topics such as best execution, suitability and appropriateness, post-sale reporting, record keeping, and investment advice on an independent basis.
The Q&A mechanism is a practical convergence tool used to promote common supervisory approaches and practices. It is intended to help investors and other market participants by providing clarity on the regulatory requirements.
Keywords: Europe, EU, Securities, EMIR, MiFID/MiFIR, Product Intervention Measures, Q&A, Investor Protection, ESMA
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