Over the past months inflation rates have risen in the EU, as in the rest of the world, and this growth in inflation has impacted households both in their daily lives and in their investments and investment decisions.
ESMA notes that from an investor protection perspective, this trend poses a risk for retail investors, as some of them will not fully appreciate the link between inflation and financial markets and may not fully understand how considerations on inflation should be factored in when they make saving and investment decisions.
ESMA is therefore issuing this Statement to remind firms of relevant MiFID II requirements as it believes that investment firms may play a role in considering inflation and inflation risk, both when manufacturing and distributing investment products and when providing investment services to retail clients. Investment firms can also help raising clients’ awareness of inflation risk.
In the Report, ESMA provides guidance on certain technical elements and makes recommendations on compensatory measures on supervisory data to ensure a consistent application by DLT market infrastructures from the start of the regime.
ESMA concludes that there is no need to amend the RTS on transparency and data reporting requirements before the DLT Pilot starts applying in March 2023. The DLT Pilot Regime is part of the Digital Finance Package introduced by the European Commission in 2020 to further enable and support the potential of digital finance while mitigating associated potential risks. The Regulation on a pilot regime for market infrastructures based on the DLT Pilot aims at developing the trading and settlement for DLT financial instruments. The DLT Pilot requires ESMA to assess whether the RTS developed under MiFIR relative to certain pre- and post-trade transparency and data reporting requirements need to be amended to be effectively applied also to securities issued, traded, and recorded on DLT.
The transferability Guidelines aim at supporting the assessment of the feasibility and credibility of transfer strategies and include requirements relating to the implementation of transfer tools. The transferability Guidelines include proportionality measures, as they do not apply to institutions subject to simplified obligations or earmarked for liquidation, unless resolution authorities decide so (in full or in part). In addition, discretion is left to authorities with regards to the extent of application of the Guidelines in cases where the transfer tool is only part of the variant strategy.
