ESMA Guidelines and other Convergence Instruments

The purpose of these guidelines is to establish consistent, efficient and effective supervisory practices and to ensure the common, uniform and consistent application of Union law, in particular of Article 18a(2) of the UCITS Directive and Article 16(2b) and (2c) of the AIFMD in relation to the selection, activation and calibration of LMTs.

ESMA has published these guidelines with the aim of harmonising the assessment of the knowledge and competence of employees of crypto-asset service providers who offer advice or information on crypto-assets and the use of crypto-asset services across Europe. The uniform criteria are intended to effectively support these providers in fulfilling their obligation to act in their clients' best interests. At the same time, the guidelines provide supervisory authorities with a clear framework for reliably assessing compliance with these obligations. Overall, ESMA expects this to significantly strengthen investor protection.

The present ESMA Guidelines aim at strengthening, technology-appropriate, and coordinated market surveillance in the field of crypto-assets. They provide a risk-based supervisory framework that addresses both traditional and novel forms of market abuse, while promoting resource awareness and EU-wide consistency.

The guidelines establish an information system by the ESAs for the exchange of information relevant for the assessment by competent authorities of the suitability and reliability of holders of qualifying holdings, directors and key function holders of financial institutions and financial market participants. The information system is a digital platform jointly established by EBA, EIOPA and ESMA in accordance with Article 31a of Regulation (EU) No 1093/2010, Regulation (EU) No 1094/2010 and Regulation (EU) No 1095/2010.

The ESAs' common guidelines aim to establish consistent, efficient and effective supervisory practices within the ESFS and to ensure the common, uniform and consistent application of Union law in relation to the use by competent authorities of the system for exchange of information established by the ESAs.

The fit and proper assessments of members of the management body, key function holders, and owners of qualifying holdings contribute significantly to the sound and prudent management of supervised institutions. They are therefore essential to ensuring consumer and investor protection, as well as maintaining confidence in the EU financial sector. These assessments serve as an important supervisory tool for the ongoing monitoring of the authorisation and governance processes of institutions and financial market participants.

The guidelines also specify the information to be provided in relation to:

• Natural persons: first name, surname/family name, date and place of birth, and, where available, other names used by the person (including maiden names and aliases).

• Legal persons: the legal name of the entity (including any abbreviations of the legal form), aliases, the Legal Entity Identifier (LEI), or, if the LEI is not available, the registration number and the head office address.

The guidelines also define the duration for which this information is to be stored in the system.

The objective of these Guidelines is to ensure coherent, efficient, and effective supervisory practices within the framework of the European System of Financial Supervision (ESFS). The regulatory framework responds to the growing significance of crypto-assets and ensures the consistent application of MiCAR provisions in the context of investment advice and portfolio management involving crypto-assets.

The ESMA Guidelines specify the criteria for determining when crypto-assets may qualify as financial instruments under MiFID II. They are addressed to national competent authorities, crypto-asset service providers (CASPs), issuers, investors, and other financial market participants. The Guidelines aim to promote a common, consistent, and coherent application of Article 2(4)(a) of the MiCAR Regulation across the European Union.

These guidelines are aimed at fulfilling the mandate given to the ESAs under Article 11(11) of Regulation (EU) 2022/2554, to develop common guidelines on the estimation of aggregated annual costs and losses of major ICT-related incidents referred to Article 11(10) of that Regulation. These guidelines also specify a common template for the submission of the aggregated annual costs and losses.

These guidelines are addressed to competent authorities as defined in Article 46 of Regulation 2022/2554 and to financial institutions as defined in Article 4(1) of Regulation (EU) 1093/2010, Article 4(1) of Regulation (EU) 1094/2010 and Article 4(1) of Regulation (EU) 1095/2010.

These ESMA guidelines specify the requirements set out in Article 14(1)(d) of MiCAR. They are addressed to crypto-asset service providers (excluding asset-referenced tokens and e-money tokens) as well as to entities applying for authorisation to trade such crypto-assets. The aim of the guidelines is to establish harmonised standards for IT security and system maintenance across the Union and to promote a consistent supervisory practice. The implementation of the guidelines must take into account the principle of proportionality and should therefore depend on the size, complexity, and risk profile of the provider.

ESMA published these guidelines to clarify the application of the reverse solicitation exemption under MiCAR and to prevent circumvention of the regulation. Firms from third countries may only provide crypto-asset services to EU clients if the client seeks out the service on their own initiative – not through advertising or targeted solicitation. The guidelines ensure that national competent authorities apply consistent methods to monitor and prevent unlawful client solicitation.

The ESMA guidelines specify the requirements for providers of crypto-asset transfer services in accordance with Article 82 of MiCAR. They aim to ensure a consistent supervisory approach and to strengthen investor protection. Providers of these transfer services must clearly inform clients, prior to the conclusion of a contract, about the terms, fees, and security measures. Before a transfer takes place, clients must be notified about the irreversibility and costs involved; afterwards, details such as the parties involved, addresses, and amounts must be provided.

The purpose of these guidelines is to ensure common, uniform and consistent application of the provisions in Article 28 of the MMF Regulation. In particular, they establish common reference parameters of the stress test scenarios to be included in the stress tests taking into account the factors specified in Article 28(1) of the MMF Regulation.

1. Joint EBA and ESMA Guidelines on the assessment of the suitability of the members of the management body of issuers of asset-referenced tokens and of crypto-asset service providers
2. Joint Guidelines on the assessment of the suitability of the shareholders or members, whether direct or indirect, with qualifying holdings in issuers of ARTs or of CASPs

Joint EBA and ESMA Guidelines on the assessment of the suitability of the members of the management body of issuers of asset-referenced tokens and of crypto-asset service providers

In accordance with Article 21(3) and Article 63(11), of MiCA, these joint guidelines concern the assessment of the suitability of members of the management body of issuers of ARTs and CASPs.

Joint Guidelines on the assessment of the suitability of the shareholders or members, whether direct or indirect, with qualifying holdings in issuers of ARTs or of CASPs

In accordance with Article 16 of Regulation (EU) No 1093/2010 and of Regulation (EU) No 1095/2010, these draft Joint Guidelines lay down the methodology that competent authorities should use for the assessment of the circumstances giving rise to qualifying holdings (Section D.1 of the Guidelines).

These draft Joint Guidelines lay down the methodology that competent authorities should use for the assessment of the suitability of the shareholder or member that has qualifying holdings, whether direct or indirect (Section F.2 of the Guidelines):

a) in an applicant issuer seeking for an authorisation under Article 18 of MiCA, in accordance with the mandate set out by Article 21(3) of that Regulation;

b) in an applicant CASP seeking for authorisation under Article 62 of MiCA, in accordance with the mandate set out by Article 63(11) of that Regulation.

In accordance with Article 16 of Regulation (EU) No 1093/2010 and of Regulation (EU) No 1095/2010, these draft Joint Guidelines lay down the methodology that competent authorities should use for the assessment of the suitability of a proposed acquirer of direct or indirect qualifying holdings (Section D.3 of the Guidelines):

a) in an issuer of ARTs authorised under Article 21 of MiCA, in accordance with the criteria set out by Article 42(1), points (a) to (e) of that Regulation;

b) in a CASP authorised under Article 63 of that Regulation, in accordance with the criteria set out by Article 84(1), points (a) to (e) of that Regulation.

These Guidelines constitute consistent, efficient and effective practices on the oversight cooperation and information exchange between ESAs and competent authorities regarding the DORA oversight framework of critical ICT third-party service providers.

The objective of the Guidelines is to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names, and to provide OGAW managers and AIF managers with clear and measurable criteria to assess their ability to use ESG or sustainability-related terms in fund names.

These Guidelines are based on Article 15(5) of CCPRRR. The objective of these Guidelines is to promote convergence of resolution practices regarding the application of Section C in accordance with Article 16(1) of the Regulation (EU) No 1095/2010.

The aim of those Guidelines is to provide clarity on the key elements of the resolution plan that should be included in the summary referred to in Article 12(7), point (a), of CCPRRR and disclosed to the CCP in accordance with Article 12(8) of CCPRRR.”

These Guidelines are based on Article 16(1) of the ESMA Regulation. The objectives of these Guidelines are to establish consistent, efficient and effective supervisory practices within the ESFS and to ensure the common, uniform and consistent application of Article 4 of CCPRRR and of the Resolution College Delegated Regulation. In particular, they aim to clarify the key elements referred to in Article 4 of CCPRRR and of the Resolution College Delegated Regulation.

These Guidelines are based on the legislative mandate included in the second subparagraph of Article 79(4) of CCPRRR. Article 79(4) mandates ESMA to develop Guidelines specifying the types and content of the provisions included in cooperation arrangements.

The purpose of the amended Guidelines on transfer of data under EMIR is threefold: (i) Remove portability obstacles from the competitive TR environment, and ensure that TR participants can benefit from the multi-TR environment, (ii) Ensure the quality of data available to authorities, including the aggregations carried out by TRs, even when the TR participant changes the TR to which it reports and irrespective of the reason for such a change and (iii) Ensure that there is a consistent, standardised and harmonised way to transfer records from one TR to another TR and support the continuity of reporting and reconciliation in all cases including the withdrawal of registration of a TR.

These Guidelines are based on Article 16(1) of ESMA’s Regulation. They fulfil several purposes with regards to the harmonisation and standardisation of reporting under EMIR. This is key to ensure high quality of data necessary for the effective monitoring of the systemic risk. Furthermore, increased harmonisation and standardisation of reporting allows to contain the costs along the complete reporting chain - the counterparties that report the data, the TRs which put in place the procedures to verify the completeness and correctness of data, and the authorities, defined in Article 81(3) of EMIR which use data for supervisory and regulatory purposes.

These Guidelines apply in relation to Article 45a of EMIR, which mandates ESMA to draft guidelines further specifying the circumstances in which the competent authority may require the CCP to refrain from undertaking any of the restricted actions referred to in Article 45a(1) of EMIR, for a period specified by the competent authority, that cannot exceed five years.

These Guidelines apply to competent authorities designated pursuant to Article 22 of EMIR.

These Guidelines are based on Article 29(7) of CCPRRR. The objective of these Guidelines is to promote the convergence of supervisory and resolution practices regarding the methodology to be used by the resolution authority for determining the valuation of contracts prior to their termination as referred to in Article 29(1) of CCPRRR. In particular, they aim to promote the convergence of supervisory and resolution practices with respect to this valuation methodology. For this purpose, the Guidelines cover respectively the process of the valuation, its scope, the valuation according to the rules and arrangements of the CCP which should be considered first and then the valuation using alternative price discovery methods and sources if deem necessary.

These Guidelines are based on Article 18(8) of CCPRRR and issued in accordance with Article 16 of the ESMA Regulation. The objectives of these Guidelines are to establish consistent, efficient and effective supervisory practices within the ESFS and to ensure the common, uniform and consistent application of Article 18(1) of CCPRRR.

In particular, these Guidelines seek to provide competent authorities with guidance on the situations under which they should consider the application of early intervention measures to CCPs. Specifically, the Guidelines provide indicators guiding on the application of the triggers prompting the consideration of whether to apply early intervention measures.

The objective of these Guidelines is to promote the convergence of supervisory and resolution practices regarding the application of the circumstances under which a CCP is deemed to be failing or likely to fail.

These Guidelines clarify the different circumstances under which a CCP is deemed to be failing or likely to fail, one of the three cumulative conditions set out in Article 22(1) of CCPRRR for triggering a resolution action. In particular, they aim to promote the convergence of supervisory and resolution practices with respect to how and when resolution should be triggered with respect to the circumstances under which a CCP is deemed to be failing or likely to fail.

These guidelines specify the common procedures and methodologies for the functioning of the supervisory review and evaluation process (SREP) referred to in Articles 36 and 45 of Directive (EU) 2019/20345 and processes and actions taken with reference to Articles 39, 40, 41 and 42 of that Directive.

These guidelines apply in relation to the supervisory review and evaluation process (SREP) of the investment firms as defined in Articles 36 to 45 of Directive (EU) 2019/2034.

Competent authorities should apply these guidelines at the highest level of consolidation in accordance with the level of application of the requirements of Part One, Title II of Regulation (EU) 2019/2033. For parent undertakings and subsidiaries included in the consolidation, competent authorities should adjust the depth and the level of granularity of their assessments to correspond to the level of application.

Where an investment firm has a subsidiary in the same Member State a proportionate approach for the assessment of capital and liquidity adequacy may be applied by focusing on the assessment of allocation of capital and liquidity across the entities and potential impediments to the transferability of capital or liquidity within the group.

For investment firm groups, including groups with undertakings established in third countries, procedural requirements should be applied in a coordinated manner within the framework of colleges of supervisors established pursuant to Article 48 of Directive (EU) 2019/2034. Title 11 explains the details of how these guidelines apply to cross-border groups and their entities.

These guidelines are addressed to competent authorities as defined in Article 4(2), point (viii) of Regulation (EU) No 1093/2010.

These Guidelines are based on Article 9(12) of CCPRRR and issued in accordance with Article 16(1) of the ESMA Regulation. The objectives of these Guidelines are to establish consistent, efficient and effective supervisory practices within the ESFS and to ensure the common, uniform and consistent application of Article 9(1) of CCPRRR. They aim at specifying the range of recovery plan scenarios to be considered by CCPs when drawing up and maintaining their recovery plans and by competent authorities when assessing those recovery plans.

The objective of preparing the range of recovery plans scenarios is to identify a range of forward-looking events of severe distress, a CCP may face, against which the effectiveness of recovery measures and the adequacy of indicators contained in the CCP recovery plan can be tested.

These Guidelines apply to competent authorities as defined in point (7) of Article 2 of CCPRRR and to CCPs authorised under Article 14 of EMIR.

These Guidelines are based on Article 9(5) of CCPRRR and issued in accordance with Article 16 of the ESMA Regulation. The objectives of these Guidelines are to establish consistent, efficient and effective supervisory practices within the ESFS and to ensure the common, uniform and consistent application of Article 9(3) of CCPRRR. In particular, they aim at specifying the minimum list of qualitative and quantitative indicators to be included in CCP recovery plans. Such indicators shall be assessed by the competent authorities as part of their assessment of recovery plans as stipulated in and in accordance with Article 10 of CCPRRR.

The objective of preparing a set of recovery plan indicators is to define a set of triggers that should be used by each CCP to define the points at which it has to decide whether to take action under its recovery plan, and to determine which particular actions or measures contained in the recovery plan may be taken, in accordance with the conditions and requirements set out in CCPRRR.

Furthermore, pursuant to Article 16(1) of ESMA Regulation, ESMA may issue guidelines with a view to establishing consistent, efficient and effective supervisory practices within the ESFS, and to ensuring the common, uniform and consistent application of Union law. The scope of these guidelines is with this aim expanded beyond the scope set forth by Article 9(5) of CCPRRR, by introducing Guideline 4 covering the integration of the CCP recovery plan indicators with the CCP’s monitoring system. The purpose of this guidance is to ensure the monitoring of all relevant types and sources of risk and their integration in the monitoring system, as these are necessary steps in order to ensure that recovery plan indicators are overall effective.

These Guidelines apply to competent authorities as defined in point (7) of Article 2 of CCPRRR and to CCPs authorised under Article 14 of EMIR

These guidelines relate to common procedures and methodologies for the supervisory review and evaluation process pursuant to Article 21 of EMIR. These guidelines do not introduce new requirements for CCPs in addition to the ones specified in EMIR or the relevant technical standards.

The Guidelines and Recommendations define the written agreement that a CCP´s NCA should propose as part of its etablishment of a college under Article 18 of EMIR (CCP colleges) to facilitate the exercise of the tasks referred to in Articles 15,17,49,51 and 54 of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC Derivatives, CCPs and Trade Repositories (EMIR) and that the CCP college members should agree to ahead of their participation in such colleges.

The objectives of the guidelines on article 25 AIFMD are to establish consistent, efficient and effective supervisory practices within the ESFS and to ensure the common, uniform and consistent application of Article 25 of the AIFMD. In particular, they relate to the assessment of leverage-related systemic risk and aim to ensure that competent authorities adopt a consistent approach when assessing whether the condition for imposing leverage related measures are met.

These guidelines relate to performance fees in UCITS and certain types of, marketed to retail investors, AIFs. The guidelines apply for new funds, created on or after January 5, 2021. For existing funds these guidelines apply by the beginning of the financial year following July 5, 2021.

These Guidelines relate to liquidity stress testing in UCITS and AIFs and apply to managers and depositaries. In respect of managers they apply primarily in relation to § 14(1) AIFMG, Art 47 & 48 AIFM-Regulation, § 85 InvFG 2011, Art 40(3) UCITS delegated Directive and Art 28 MMFR. In respect of depositaries they apply primarily in relation to § 19 AIFMG, Art 92 AIFM-Regulation, § 40(2) InvFG 2011 and Art 3 UCITS-Regulation.

Regarding the FMA Regulation on the risk management process for liquidity risks of investmentfunds (Inv-LRMV) these Guidelines complement the existing rules. Managers have to continue to comply with, at least, monthly liquidity stress testing for UCITS and AIF, according to § 4(3)(5) Inv-LRMV.

These ESMA Guidelines on liquidity stress testing in UCITS and AIF entered into force on 30 September 2020.

These guidelines establish a framework for cooperation and information exchange between competent authorities through either bilateral engagements or anti-money laundering/combatting the financing of terrorism (AML/CFT) colleges and govern the establishment and functioning of AML/CFT colleges.

The purpose of the guideline is to ensure a common, uniform and consistent application of the definitions of commodity derivatives under C6 and C7 of Annex I of the Markets Financial Instruments Directive.

These guidelines shall ensure common, uniform and consistent application of Article 9 of CSDR as well as the relevant provisions of the Commission Delegated Regulation (EU) 2017/391 and the Commission Implementing Regulation (EU) 2017/393 3 , including the exchange of information between ESMA and the competent authorities regarding internalised settlement.

These guidelines seek to establish consistent, efficient and effective supervisory practices within the ESFS and to ensure a common, uniform and consistent application of Article 41 of EMIR and Article 10 and Article 28 of the RTS in the context of limiting procyclicality of CCP margins.

These guidelines shall ensure common, uniform and consistent application of the Articles 33 of EMIR and Article 3, 5, 6 and 7 of the CCP RTS. In order to elaborate these guidelines, ESMA has also reviewed regulations issued in respect of other market infrastructures, in particular CSDs, and actual rules published by CCPs.

In order to ensure the adequate protection of consumers, these Guidelines seek to clarify expectations relating to firms’ organisation relating to complaints-handling; provide guidance on the provision of information to complainants; provide guidance on procedures for responding to complaints; harmonise the arrangements of firms for the handling of all complaints they receive; and ensure that firms’ arrangements for complaints-handling are subject to a minimum level of supervisory convergence across the EU.

The Guidelines on complaints-handing for the securities and banking sectors correspond to the 2014 version of the Guidelines in terms of their content. The scope of application was, however, extended to cover new providers in accordance with PSD II and the MCD. The BMDW is competent for the supervision of providers pursuant to the MCD (credit intermediation services).

The Guidelines contain interpretations about the MiFID II product governance provisions that are transposed in Articles 30 and 31 WAG 2018. The objective of the Guidelines is to create coherent standards for the implementation and supervision of MiFID II Product Guidance regulations for guaranteeing investor protection.

The Guidelines focus on the determining of the target market for MiFID II financial products. In particular they contain a description of the material factors in the determination of the target market as well as remarks about the negative target market and for determining the distribution strategy as well as clarifications regarding the application of the principle of proportionality. Furthermore, the Guidelines contain explanations about the distribution of products manufactured by entities not subject to MiFID II requirements and for reviewing their target market and distribution strategy. Furthermore the distribution of products that were manufactured prior to the applicability of MiFID II and the target market requirements for professional clients and eligible counterparties are also addressed.

These Guidelines are based on Article 45(9) for market operators and Article 63(2) for data reporting services providers of the Directive 2014/65/EU (MiFID II). They clarify the requirements applicable to members of the management bodies of market operators or data reporting services providers (both existing members and those to be appointed) and relate to issues like time commitment, honesty and integrity, knowledge, skills and experience and independence of mind.

These guidelines set out the characteristics of a risk-based approach to anti-money laundering and countering the financing of terrorism (AML/CFT) supervision and the steps competent authorities should take when conducting supervision on a risk-sensitive basis as required by Article 48(10) of Directive (EU) 2015/849.

These Guidelines are aimed at clarifying the procedural rules and the assessment criteria to be applied by competent authorities for the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector. These Guidelines apply to competent authorities in the prudential assessment of acquisitions or increases of qualifying holdings in target undertakings.

The purpose of the APM Guidelines is to promote the usefulness and transparency of APMs included in prospectuses, financial reports and market disclosures, which qualify as regulated information. The guidelines set out the principles that issuers should follow when presenting APMs in documents; these principles address the labelling, calculation, presentation and comparability of the information.

These Guidelines and Recommendations concern the implementation of the CPSS-IOSCO Principles for Financial Market Infrastructure (PFMIs) by competent authorities as part of the exercise of their duties resulting from EMIR for the authorisation and supervision of CCPs pursuant to Article 22(1) of EMIR.

The purpose of these guidelines is to ensure common, uniform and consistent application of the reporting obligations to national competent authorities (NCAs) stemming from Articles 3(3)(d) and 24(1), (2) and (4) of the AIFMD and Article 110 of the Regulation. These guidelines achieve this goal by providing clarifications on the information that alternative investment fund manager (AIFMs) must report to NCAs, the timing of such reporting together with the procedures to be followed when AIFMs move from one reporting obligation to another.

The purpose of these guidelines is to ensure common, uniform and consistent application of the con-cepts that comprise the definition of "AIF" in Article 4(1)(a) of the AIFMD by clarifying each of these concepts. Appropriate consideration should be given to the interaction between the individual con-cepts of the definition of the AIF and an entity should not be considered an AIF unless all the elements included in the definition of "AIFs" under Article 4(1)(a) of the AIFMD are present.

The purpose of these guidelines is to ensure consistent application of the provisions of the delegated act adopted by the European Commission regarding the supervisory cooperation arrangements that are required in accordance with Articles 20(1)(d), 21(6)(a), 34(2), 35(11), 36(3), 37(15), 40(11) and 42(3) of the AIMD.

These guidelines apply in relation to the remuneration policies and practices for AIFMs and their identified staff.

The Guidelines aim at preventing conflicts of interests that may arise in connection with the sale of investment products. For example, conflicts of interest could emerge where a variable remuneration received by staff providing investment advice in relation to the sale of certain products creates an incentive to sell these products. Credit institutions and investment firms can avoid such conflicts of interest through internal rules in relation to the remuneration of sales staff. The guidelines explain for example that the ratio between fixed and variable remuneration should be well balanced. Further, the guidelines contain several examples for “good and bad practices” in relation to remuneration of staff providing investment services.

The Guideline and Recommendations define what NCAs should analyse in assessing an interoperability arrangement between CCPs and therefore on what aspects of the interoperable arrangement the relevant CCPs will need to focus their attention.

The "Guidelines on certain aspects of the MiFID compliance function requirements" contain an interpretation of the relevant MiFID rules (Markets in Financial Instruments Directive) respectively the national laws which are based on this European directive. The Guidelines specify the role and responsibilities of the compliance function in credit institutitions and investment firms. Among other topics, the Guideline explain the responsibilities of the compliance-function and give information about the necessary resources for the compliance-function. The legal basis remains unaffected by this circular letter of the FMA. Any rights and obligations going beyond the statutory provisions cannot be derived from these Guidelines.

The purpose of these guidelines is to provide certain types of structured UCITS as described in guideline 1 with an optional regime for the calculation of the global exposure using the commitment

The third set of CESR guidance at level 3 covers following issues: Harmonisation of requirements for insider lists; Suspicious Transactions Reporting; Stabilisation Regime as Level 3; The notion of inside information to be analysed as a Level 3 topic.

The second set of CESR guidance at level 3 covers following issues: What constitutes inside information; When is it legitimate to delay the disclosure of inside information; When does information relating to a client´s pending orders constitute inside information; insider lists in multiple jurisdictions.

This Guideline shall provide a safe harbor to investment firms, Regulated Markets and MTF´s in interpreting the obligation to publish post-trade transparency data.

The first set of CESR guidance at level 3 concentrates on three market facing issue that CESR members consider to be priorities. The priority areas cover accepted market practices in relation to market manipulation, guidance on what CESR members consider to contitute market manipulation and guidance and a common reporting format for reporting suspicious transactions.