ESMA expects NCAs not to prioritise supervisory actions towards execution venues relating to the periodic reporting obligation on them to publish the RTS 27 reports, from 1 March 2023 until the forthcoming legislative amendment to the relevant Article of MiFID II applies.
The Directive amending MiFID II, under the Capital Markets Recovery Package temporarily suspended the RTS 27 reporting requirement until 28 February 2023. The European Commission’s legislative proposal on the MiFID II/MiFIR review includes a proposal to delete the obligation to publish RTS 27 reports. This proposal is currently subject to the legislative procedure at the European Parliament and the Council of the EU. In this context, ESMA has observed a lack of clarity among market participants on the suspension of the obligation to publish RTS 27 reports, if the negotiations by the Council of the European Union and the European Parliament exceeded the expiration date of this temporary suspension (ie, 28 February 2023).
Based on available information, the MiFID II/MiFIR legislative procedure is likely to exceed 28 February 2023. Therefore, it is also likely that RTS 27 reporting obligation would temporarily re-apply after 28 February 2023 until the reviewed MiFID II Directive would apply.
The free provision of services in the EU rests on the supervision of the home NCA and on the cooperation between home and host supervisors. To this end, this briefing covers the following areas:
- authorisation of firms with cross-border plans;
- processing of passport notifications and their impact on the supervisory approach applied to firms;
- arrangements in place to carry out ongoing supervisory activities;
- carrying out of ongoing supervision; and
- carrying out of investigations and inspections.
Overall, the review finds that fees and charges vary greatly in terms of level and type not only across the European Union (EU) market, but also across FIs within the same jurisdiction. Furthermore, the variety of types for fees and charges cause different levels of detriment to consumers, and, with the exception of payment accounts, fees and charges are difficult to compare between providers.
More specifically, the review finds that national legal frameworks are mostly subject to the general principle of freedom of contract. Despite the improvements in consumer protection brought about by several EU sectoral directives introduced in the past decade to regulate the banking retail products, market practices for fees and charges are causing significant detriment to consumers.
With the exception of payment accounts, the low level of harmonisation and standardization of fees within EU Member States might cause detriment to consumers when comparing effectively costs of products and services offered by financial institutions.
The Guidelines aim to set up a consistent framework for the determination of the ORC by institutions in their recovery plans and the respective assessment by competent authorities. The consultation runs until 14 March 2023.
The objective of the ORC is to provide a summary of the overall capability of the institution to restore its financial position after a significant deterioration by implementing suitable recovery options. The assessment by competent authorities of an institution’s overall recovery capacity allows to understand to what extent an institution would be able to recover from a range of potential crisis situations.
The main goal of the Guidelines is to harmonise the observed practices on the ORC determination and assessment, so as to improve the usability of recovery plans and make crisis preparedness more effective.
The Guidelines are composed of two sections. The first one addressed to institutions, aims at providing guidance on the relevant steps to set-up a reliable ORC framework. The second one, addressed to competent authorities, complements the framework by harmonising the core elements of the competent authorities’ assessment of the ORC from both a quantitative and qualitative perspective.
