- Published on the 15th July 2019 with a closing date for responses by 15th October 2019, the European Securities and Markets Authority (ESMA), the EU’s securities markets’ regulator, has launched a consultation on draft guidelines on certain aspects of the compliance function requirements under MiFID II.
- The compliance function is a crucial function within firms, responsible for identifying, assessing, monitoring and reporting on the firms’ compliance risk.
- ESMA has cited that strengthening the compliance function under MiFID II represents an important step forward, as a strong compliance function reduces compliance risk and facilitates competent authorities to exercise their powers effectively.
ESMA’s proposals for guidelines in this area are aimed at helping firms to increase the effectiveness of the compliance function, enhance clarity and to foster convergence on the expanded the role of the compliance function under MiFID II. The Consultation Paper includes proposals on the draft guidelines which confirm and broaden the existing guidelines, issued in 2012, in order to:
- consider the changes to the compliance function requirements brought by MiFID II;
- give relevance to the results of supervisory activities conducted by national competent authorities on the compliance function requirements; and,
- provide additional details on some aspects that were already covered under ESMA’s 2012 guidelines.
- Consultation closes on 15th October 2019
- ESMA advice to be finalised by end Q4, 2019.
ESMA will consider the feedback and proposes final guidelines by Q2, 2020.