CESR confirms passports valid in non-Mifid states
CESR out with final guidance concerning late transposition and supervision of branches
BRUSSELS – As expected, the Committee of European Securities Regulators (CESR) has published guidance confirming that firms located in EU member states that have not yet transposed the Markets in Financial Instruments Directive will be able to use their existing passport licence under the Investment Services Directive (ISD) regime provided that they are able to meet certain prudential systems and controls under Mifid.
CESR states that the passports of investment firms originating from late implementing Member States continue to be valid for any branch established in other Member States and for services they provide abroad without establishment. Also, firms that wish to exercise their rights under Mifid in late implementing States are allowed to do so.
This is in line with the advice the UK Financial Services Authority issued in July and confirmed later this month. For most large scale European firms located in areas which have not fully transposed Mifid into national law, this will enable them to continue business as usual provided that their Mifid programmes are sufficiently advanced. Although the larger firms will be able to meet these requirements, many more mid-sized and smaller firms, most of which have not begun to make any changes to become Mifid compliance without having an firm legal guidance for them to follow from their national regulators, will struggle.
CESR also issued a new protocol on the supervision of branches under Mifid which establishes a framework for co-operation between competent authorities under two distinct models: requests for assistance based on efficient allocation of supervisory tasks; and joint supervision conducted through common oversight programmes.
Michael Wainwright, partner at international law firm Eversheds, says: “It was only to be expected that some member states would be late in implementing the directive. The reasons for the delay will be more to do with the complexity of the subject matter, and the obstructions of the legislative process, than fundamental objections to the content of the directive. The UK is on track to implement largely on time. It is possible that some of the states with less well developed financial markets are waiting to see what approach is taken by the UK and other leading markets, before finalising their own laws.
“A number of states were years late in implementing the Insurance Mediation Directive. This has compromised its effectiveness in the short term, but it is still taking hold as states come into line. The same can be expected with Mifid but the directive is now taking hold as member states come into line.”
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Revealed: the three EU banks applying for IMA approval
BNP Paribas, Deutsche Bank and Intesa Sanpaolo ask ECB to use internal models for FRTB
FCA presses UK non-banks to put their affairs in order
Greater scrutiny of wind-down plans by regulator could alter capital and liquidity requirements
Industry calls for major rethink of Basel III rules
Isda AGM: Divergence on implementation suggests rules could be flawed, bankers say
Saudi Arabia poised to become clean netting jurisdiction
Isda AGM: Netting regulation awaiting final approvals from regulators
Japanese megabanks shun internal models as FRTB bites
Isda AGM: All in-scope banks opt for standardised approach to market risk; Nomura eyes IMA in 2025
CFTC chair backs easing of G-Sib surcharge in Basel endgame
Isda AGM: Fed’s proposed surcharge changes could hike client clearing cost by 80%
UK investment firms feeling the heat on prudential rules
Signs firms are falling behind FCA’s expectations on wind-down and liquidity risk management
The American way: a stress-test substitute for Basel’s IRRBB?
Bankers divided over new CCAR scenario designed to bridge supervisory gap exposed by SVB failure