Political Agreement reached on MiFID II

Political agreement has been reached on MiFID II. Although the directive will not be implemented before 2016 it is worth noting a number of significant changes introduced under MiFID II that will impact asset managers:

• A pan-European ban on inducements for independent financial advisers
• The classification of certain structured UCITS as complex products
• A requirement for full disclosure of all heretofore hidden charges related to investment funds

Central Bank launches new fast-track authorisation process for investment firms

On 8 January the Central Bank launched a new authorisation process for investment firms under MiFID. Depending on the Central Bank’s determination of the complexity of their business models, applicant investment firms will be streamed along two tracks with the aim of processing simpler applications within three months and more complex applications within six months.  Both streams will include timing deadlines for exchange of correspondence. The Central Bank has updated the relevant application form and guidance note to take account of these changes. William Fry is available to advise on the new authorisation process and documentation.

ESMA issues final draft standards on acquisitions and increases in holdings in investment firms under MiFID

ESMA has issued final draft technical standards on MiFID regarding acquisitions and increases in holdings in investment firms.

The draft regulatory technical standards (RTS) establish an exhaustive list of information to be provided by the proposed acquirer of an investment firm. This information is aimed at ensuring that national competent authorities are provided with adequate and proportionate information in order to assess the acquisition. The draft RTS are largely based on the Appendix II of the CEBS, CESR and CEIOPS ‘Guidelines for the prudential assessment of acquisitions and increases in holdings in the financial sector required by Directive 2007/44/EC. There are no fundamental changes to the guidelines, although ESMA expects the information requirements to be clearer and standardised.

The draft implementing technical standards (ITS) determine standard forms, templates and procedures for the cooperation and exchange of information between the relevant competent authorities when carrying out the assessment of a proposed acquirer of an investment firm. ESMA expects the draft ITS to facilitate cooperation between competent authorities and ensure efficiency in their exchange of information.

ESMA submitted its draft RTS and ITS to the European Commission on 1 January 2014. The Commission has three months to decide whether to endorse ESMA’s draft technical standards.

Contributed by Niall Crowley