ESMA has updated its Q&A on transparency issues under the Market in Financial Instruments Directive (MIFID II) and the Markets in Financial Instruments Regulation (MiFIR). The updated Q&A outlines the scenarios in which, in ESMA’s view, an investment firm can pre-arrange or negotiate a trade that is subsequently executed on a trading venue. The Q&A specifically addresses the treatment of trades subject to the derivatives trading obligation.
OTC LEVERAGED PRODUCTS: IOSCO consultation
IOSCO has issued a consultation paper on retail OTC leveraged products following its December 2016 report which identified various risks to retail investors being offered and sold these products. The report highlights various regulatory approaches to enhance the protection of retail investors and covers the offer and sale by intermediaries of rolling spot forex contracts, contracts for differences and binary options.
IOSCO is proposing a series of measures including:
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A licensing requirement for all firms that sell the relevant products to retail investors either domestically or on a cross-border basis.
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Leverage limits and minimum margin requirements.
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Enhanced disclosure of costs and charges.
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Improved disclosure of risks, including profit and loss ratios.
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Restrictions on the sale, distribution and marketing of the products with a view to addressing miss-selling risk.
The deadline for responses to the consultation is 27 March 2018.
Read the consultation paper »
REGULATION: ESMA launches interactive single rulebook
ESMA has launched an interactive single rulebook. This is a new service for market participants and other interested stakeholders to facilitate the consistent application of the EU single rulebook for securities markets.
As it stands currently, the rulebook contains the level 1 text of the UCITS Directive with links to all relevant level 2 and level 3 measures.
ESMA plans to provide an interactive version for each key level 1 text under its remit. The next texts to be given this treatment will be the Credit Rating Agencies Regulation and MiFID II/MiFIR.
Access the rulebook »
Fund distribution resources
Dechert maintains two services designed to assist managers with global fund distribution and registration.
World Compass - A global web-based service offering investment firms 24/7 access to detailed information on fund marketing, separate accounts and beneficial ownership reporting
World Passport - An outsourced solution for fund registration globally for both UCITS and AIFs