November 29, 2017

ESMA published the results of its Peer Review on the guidelines on certain aspects of the compliance function under Markets in Financial Instruments Directive (MiFID). The guidelines cover national competent authorities’ supervision of investment firms’ compliance functions, particularly how those functions carry out risk assessments, monitor compliance obligations, report to senior management, and fulfil their advisory role.

The review found a high level of compliance, by the majority of European economic area national competent authorities, with the guidelines. However, significant weaknesses were identified in the supervisory approaches of Cyprus, Iceland, and the Netherlands. ESMA will follow up regarding the points of insufficient compliance and partial compliance with the relevant national competent authorities. The review also identified a number of good practices by a number of national competent authorities in their supervision. Key good practices identified included the following:

  • Pre-screening of compliance officers by national competent authorities
  • Clear communications of expectations to the compliance function at the authorization stage
  • National competent authorities undertaking onsite visits shortly after a firm’s authorization, particularly for riskier firms

The ESMA Supervisory Convergence Work Program 2016 included a peer review on the guidelines to assess compliance by the national competent authorities, identify good practices, and determine potential areas for improvement. The work involved assessing the approaches of thirty-one European Economic Area national competent authorities to supervising investment firms’ compliance functions, against the guidelines requirements. The assessment covered the period from July 01, 2014 to June 30, 2016. The assessment also involved on-site visits of the national competent authorities from Austria, Cyprus, Denmark, France, and Slovakia. The peer review aims to enhance supervisory convergence in the application of these guidelines and to help national competent authorities to enhance their supervisory approach toward the compliance function.      

 

Related Link: Peer Review (PDF)

Keywords: Europe, EU, Securities, Peer Review, Compliance Function, MiFID, Guidelines, ESMA

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476