European

ESMA consults on EU code of conduct for issuer-sponsored research

On 18 December 2024, the European Securities and Markets Authority (ESMA) launched a consultation on draft regulatory technical standards (RTS) to establish an EU code of conduct (EU CoC) for issuer-sponsored research.

The EU CoC outlines standards of independence and objectivity for research providers and specifies procedures and measures for the effective identification, prevention, and disclosure of conflicts of interest (COI). It aims to improve the trust in and use of issuer-sponsored research. As part of its consultation, ESMA has indicated that:

• issuers and research providers should only enter into an agreement where the minimal initial term of the contract is two years and where, at minimum, 50% of the annual remuneration is paid upfront
• research providers should establish, implement and maintain an effective COI policy
• research that is fully paid for by the issuer should be made public immediately

ESMA will expect investment firms to ensure that all issuer-sponsored research produced or intended for distribution to (potential) clients is compliant with the EU CoC.

The consultation is open until 18 March 2025 and ESMA will prepare the final report for subsequent submission of the final draft RTS to the European Commission by 5 December 2025.

ESMA MiFIR review final report - review of RTS 2 on transparency for bonds, structured finance products and emission allowances and RTS on reasonable commercial basis

On 16 December 2024, ESMA issued a final report regarding its mandates under the MiFIR Review (Regulation (EU) 2024/7913) on bond trade transparency and reasonable commercial basis (RCB). The final report includes proposals for the amendment of the Level 2 provisions specifying the transparency requirements for bonds, structured finance products and emission allowances, and the RTS on RCB.

ESMA submitted the final report to the European Commission on 16 December 2024, which will have three months to decide whether to endorse the draft RTS. ESMA also intends to publish another consultation paper addressing the transparency mandate for derivatives under Article 11a of MiFIR in early 2025.

ESMA delivers final report on equity transparency under MiFID II

On 16 December 2024, ESMA published its final report with proposals for amendments related to equity transparency under the Markets in Financial Instruments Directive (MiFID II).

The report documents proposals for the amendment of the relevant RTS as well as technical advice on the provisions on equity transparency, covering:

• Changes to the definition of a liquid market for equity instrument.
• Specification of information to be disclosed for pre-trade transparency purposes, which is also of relevance for the equity consolidated tape.
• Review of the pre-trade transparency requirements for systematic internalisers, including the calibration of two quoting sizes.
• Post-trade transparency reports, including flags for equity instruments. 

The RTS and technical advice include changes related to the discontinuation of reporting of data for the purpose of transparency calculations. In the future, ESMA will perform these calculations using transaction data reported under Article 26 of MiFIR. ESMA has advised that similar amendments will be proposed in early 2025 for the volume cap mechanism.

ESMA consults on draft technical advice concerning MAR and MiFID II

On 13 December 2024, ESMA launched a consultation on the draft technical advice concerning the Market Abuse Regulation (MAR) and MiFID II regarding the requirements necessary for multilateral trading facilities (MTF) or a segment thereof to be registered as a small and medium-sized enterprises growth market (SME GMs). All contributions to the consultation should be submitted online using the provided reply form.  The consultation will be open until 13 February 2024.

ESMA consults on technical advice on Listing Act implications

On 12 December 2024, ESMA launched a consultation to gather feedback following changes to MAR and MiFID II introduced by the Listing Act.

In respect of MAR, ESMA is inviting feedback on: 

• a non-exhaustive list of the protracted process and the relevant moment of disclosure of the relevant inside information (together with some principles to identify the moment of disclosure for protracted not listed processes)
• a non-exhaustive list of examples where there is a contrast between the inside information to be delayed and the latest public announcement by the issuer
• a methodology and preliminary results for identifying trading venues with a significant cross-border dimension, for the purposes of establishing a cross market order book mechanism

In respect of MiFID II, ESMA’s proposals include: 

• a systematic review of the relevant provisions in Commission Delegated Regulation 2017/565 to ensure that a MTF (or a segment of it) to be registered as small and medium-sized enterprises growth market (SME GMs) complies with the relevant requirements in the revised MiFID II
• some conditions to meet the registration requirements for a segment of an MTF, as specified in the revised MiFID II

ESMA will review all feedback received by 13 February 2025 and will subsequently deliver its technical advice to the European Commission before 30 April 2025.  

EBA amends the supervisory reporting framework for investment firms

On 3 December 2024, the European Banking Authority (EBA) published amendments to its final draft ITS on the supervisory reporting and disclosures of investment firms.

The ITS on investment firms reporting and disclosures anticipates that investment firms could opt to report the same information as credit institutions. Formally, the alignment with the reporting by credit institutions was achieved by adding cross-references to the applicable ITS on Supervisory reporting by credit institutions. After the amendments introduced in the Capital Requirements Regulation 3, the references included in the ITS for reporting of investment firms required updating.

The EBA will publish a technical package, which includes the data point modelling (DPM), validation rules and taxonomy. This technical package is required to be used by investment firms to submit this supervisory reporting information.

The revised reporting requirements are expected to be applicable from 1 January 2025.

EMIR Directive published in the Official Journal of the EU

On 4 December 2024, the EMIR Directive ((EU) 2024/2994 of the European Parliament and of the Council of 27 November 2024) was published in the Official Journal of the EU. The EMIR Directive will enter into force on the twentieth day following that of its publication in the Official Journal of the EU.

EMIR 3 published in the Official Journal of the EU

On 4 December 2024, EMIR 3 (Regulation (EU) 2024/2987 of the European Parliament and of the Council of 27 November 2024) was published in the Official Journal of the EU. EMIR 3 will enter into force on the twentieth day following that of its publication in the Official Journal of the EU.

For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.

This publication provides an overview of certain legal and regulatory developments that may be of interest to certain entities. It does not purport to provide analysis of law or legal advice and is strictly for information purposes only.