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CBI ‘Dear CEO’ Letter - Common Supervisory Action on MiFID II marketing communication requirements
On 10 October 2024, the Central Bank of Ireland (CBI) issued a ‘Dear CEO’ Letter presenting the findings of its thematic review of investment firms' application of the marketing communications disclosure requirements as set out in the European Union (Markets in Financial Instruments) Regulations 2017 and Commission Delegated Regulation (EU) 2017/565 (together MiFID II). The Dear CEO letter also outlined the CBI’s expectations regarding the application of the MiFID II Marketing and Advertising Requirements. The review was conducted as part of an ESMA Common Supervisory Action (CSA) and the CBI’s findings have also been highlighted in ESMA’s reports on the application of MiFID II marketing requirements.
The Dear CEO letter highlighted key deficiencies identified by the thematic review including marketing and advertising content that was not clearly identifiable as such, poor governance and controls, inadequate oversight of outsourced marketing activities, imbalanced, unclear, and potentially misleading marketing content and gaps in identification of target audience.
The CBI outlined in the letter, specific actions that MiFID Investment Firms and companies providing MiFID II services to retail clients should take which include reviewing and documenting marketing and advertising practices, considering formal mitigating actions and adopting a proactive approach to compliance.
Handbook of Prudential Requirements for Investment Intermediaries
The CBI has published an updated version of its Handbook of Prudential Requirements for Investment Intermediaries (the handbook). The requirements in the handbook apply to investment business firms and are imposed under the Investment Intermediaries Act 1995.
Under section 4.1 of the handbook, an investment intermediary is required to put a policy of professional indemnity insurance (PII) in place which covers the investment intermediary’s activities in accordance with section 4.2 of the handbook. Under section 4.2 of the handbook as updated, the PII cover must at a minimum, provide cover for €1,564,610 per claim (increased from €1.3m) and €2,315,610 in aggregate for investment business activities (increased from €1.92m). Firms are required to hold separate, ring-fenced cover in relation to each authorised activity that requires the firm to hold PII cover.
CBI Consumer Research Bulletin on marketing and advertising of investment products
On 10 October 2024, the CBI published a Consumer Research Bulletin on Marketing and Advertising of Investment Products (the bulletin). The bulletin set out findings from a mystery shopping exercise conducted by the CBI to understand how Irish retail investors engage with investment firms’ advertising and marketing materials. The bulletin complements the CBI’s recent thematic review on marketing communications for investment firms and its contents are also relevant to the CBI’s review of the Consumer Protection Code 2012.
ESMA updates guidance on the transitional arrangements under the MiFID II/MiFIR Review
On 16 October 2024 the European Securities and Markets Authority (ESMA) published updates to the following publications in light of the transitional provisions under the MiFID II/MiFIR Review:
The amendments made to the publications provide guidance on the transitional arrangements under the MiFID II/MiFIR review and are published with the objective of contributing to the consistent application of MiFIR and complementing the MiFIR review and technical standards published earlier this year. Further updates to the level 3 guidelines will be introduced following the implementation of the new and updates rules and technical standards.
ESMA consults on transaction reporting and order book data
On 3 October 2024, ESMA launched a consultation on draft regulatory technical standards (RTS) in relation to transaction reporting and order book data under MiFIR in connection with the MiFIR review. The RTS aim to enhance the information available to stakeholders by simplifying and harmonising reporting requirements and to reduce reporting burdens. The deadline for submission of responses is 3 January 2025.
After considering the feedback in responses, a final report will be published and the draft RTS will be submitted to the European Commission.
Council of the EU adopts the Listing Act
On 8 October 2024, the Council of the EU adopted the Listing Act. Important changes made by the Listing Act include changes to the Market Abuse Regulation, the Prospectus Regulation and MiFID II and MiFIR.
Following its adoption, the Listing Act will be published in the Official Journal later this year. Some of the provisions in the Listing Act will come into effect on publication. The remaining provisions will come into force 15 or 18 months after publication.
ESMA publishes 2025 Work Programme
On 1 October 2024, ESMA published its work programme for 2025. The work programme focuses on implementing ESMA’s multiannual strategy which identifies three strategic priorities and two thematic drivers. The work programme addresses the objectives and outputs in relation to each of the priorities and drivers and divides the outputs into ongoing work, annual outputs and specific 2025 outputs.
The strategic priorities identified are:
The thematic drivers identified are:
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.