IMA response to ESMA consultation on MiFID holdings

09 September 2013

The IMA responded to ESMA's consultation paper on draft RTS on information requirements for assessment of acquisitions and increases in holdings in investment firms (MiFID), identifying key issues with which it has particular concerns.

• The existing 3L3 guidelines recognise that proportionality should be applied to the information required about the professional competence of the acquirer where a purchase is made for investment purposes, as opposed to trying to control the target as a subsidiary. This approach is not carried over to the draft RTS. While it does (at Art 5(1)(b)) require the acquirer to provide details of their ‘intentions with respect to the proposed acquisition, such as strategic investment or portfolio investment’, it does not recognise that where the intentions are purely for investment purposes that less detailed information should be required as regards professional competence, or other issues.

• The second issue is the proposal to reduce the information requirements for EU regulated entities acquiring small non-complex investment firms (Art.11). Some of this information would seem to be of considerable use to the NCA of the acquired firm. While much of the information would be held by the NCA of the acquirer there seems to be no requirement on them to provide the information to the acquiree’s NCA.

While the IMA recognises that, technically, ESMA is not required to consult on the ITS setting out the consultation process between competent authorities, IMA would expect that ESMA follows a clear and transparent process when drafting this ITS, as with all of its legislative drafting responsibilities. It is in everyone’s interest that all parties are able to input to the drafting process, to obtain the best possible output from the process. IMA would hope that ESMA see the consultation process, not as an onerous burden imposed on them be statute, but as an essential part of the process of developing good legislation.

Article 11(1)(b)(ii) refers to points (d) to (m) of paragraph 2 of Article 4, but Article 4(2) only goes up to (k).

Full response

Original ESMA consultation: Draft RTS on information requirements for assessment of acquisitions and increases in holdings in investment firms (MiFID), 8.7.13

See also IMA-restructures to align with strategic priorities, 2.9.13

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