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In 2015, ESMA has made significant steps in realising its mission of enhancing investor protection and promoting stable and orderly financial markets through a variety of means, namely assessing risks to investors, markets and financial stability, creating a single rulebook, promoting supervisory convergence and supervising credit rating agencies and trade repositories.
In 2015, ESMA reflected the new focus of its work by creating a supervisory convergence standing committee, which will permanently lead the convergence agenda. ESMA’s achievements in the area of supervisory convergence included issuing of guidelines to further the consistent application of MiFID II/ MiFIR and for the Market Abuse Regulation (MAR). To increase convergent regulatory action, ESMA coordinated temporary bans under the Short-Selling Regulation and ESMA assessed the convergence of CCPs’ supervisory colleges.
Also in the area of asset management, ESMA helped to further harmonise rules fur hedge funds (AIFMD) and exchange-traded funds (ETFs) as well as furthering the application of Key Investor Information Documents (KIID). ESMA also proposed to extend the AIFMD passport to entities of certain third-countries.
Helping to increase supervisory convergence also meant to advance the policy agenda by preparing the entry-into-force of the Central Securities Depository Regulation (CSDR), promoting a harmonised application of the Transparency Directive (TD) as well as contributing the development of accounting (IFRS) and audit rules while providing common enforcement priorities.
In 2015, ESMA increased its efforts to ensure the consistent application of the new MiFID/MiFIR framework. In the area of investor protection, ESMA has delivered several important guidelines on complex products, knowledge and competence and cross-selling which will result in greater standards of services to clients, a higher degree of investor protection and an overall reduction in client detriment. ESMA has also started working, together with EBA, on guidelines on the management bodies of investment firms which will be continued in 2016.
Under MiFID II, investment firms are allowed, subject to certain conditions, to provide investment services that only consist of execution or reception and transmission of orders without obtaining client information necessary to assess the appropriateness of the service or product for the client (known as “execution-only”). One of the conditions is that the services relate to products which are “non-complex”.