ESMA Guidelines and other Convergence Instruments

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.

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).

These Guidelines specify the requirements regarding the suitability of members of the management body of credit institutions, investment firms, financial holding companies and mixed financial holding companies and, in particular, in accordance with Article 91(12) of Directive 2013/36/EU2 Article 9(1) of Directive 2014/65/EU3, the notions of sufficient time commitment; honesty, integrity and independence of mind of a member of the management body; adequate collective knowledge, skills and experience of the management body; and adequate human and financial resources devoted to the induction and training of such members. The notion of diversity to be taken into account for the selection of members of the management body is also specified in accordance with the above mentioned articles. The Guidelines also specify requirements regarding the suitability of the heads of internal control functions and the chief financial officer (CFO) of credit institutions and certain investment firms, where they are not part of the management body, and, where identified on a risk-based approach by those institutions, of other key function holders, as part of the governance arrangements referred to in Articles 74 and 88 of Directive 2013/36/EU and Articles 9(3), 9(6) and 16(2) of Directive 2014/65/EU, and on the related assessment processes, governance policies and practices, including the principle of independence applicable to certain members of the management body in its supervisory function.

Date of application: These Guidelines apply from 30 June 2018.

The EBA Guidelines on the assessment of the suitability of members of the management body and key function holders (EBA GL 2012/06) are repealed with effect from 30 June 2018.

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.

Full title: Joint Guidelines under Article 25 of Regulation (EU) 2015/847 on the measures payment service providers should take to detect missing or incomplete information on the payer or the payee, and the procedures they should put in place to manage a transfer of funds lacking the required information

Subject matter and scope

1. These guidelines are addressed to:

a) payment service providers (PSPs) as defined in point (5) of Article 3 of Regulation (EU) 2015/847 where they act as the PSP of the payee, and intermediary payment service providers (IPSPs) as defined in point (6) of Article 3 of Regulation (EU) 2015/847; and

b) competent authorities responsible for supervising PSPs and IPSPs for compliance with their obligations under Regulation (EU) 2015/847.

2. These guidelines:

a) set out the factors PSPs and IPSPs should consider when establishing and implementing procedures to detect and manage transfers of funds that lack required information on the payer and/or the payee to ensure that these procedures are effective; and

b) specify what PSPs and IPSPs should do to manage the risk of money laundering (ML) or terrorist financing (TF) where the required information on the payer and/or the payee is missing or incomplete.

3. Competent authorities should use these guidelines when assessing the adequacy of the procedures and measures adopted by PSPs and IPSPs to comply with Articles 7, 8, 11 and 12 of Regulation (EU) 2015/847.

4. PSPs, IPSPs and competent authorities should also use these guidelines to ensure compliance with Articles 9 and 13 of Regulation (EU) 2015/847.

5. The factors and measures described in these guidelines are not exhaustive. PSPs and IPSPs should consider other factors and measures as appropriate.

6. These guidelines do not apply to restrictive measures imposed by regulations based on Article 215 of the Treaty on the Functioning of the European Union, such as Regulations (EC) No 2580/2001, (EC) No 881/2002 and (EU) No 356/2010 (‘the European sanctions regime').

Full title: Joint Guidelines under Articles 17 and 18(4) of Directive (EU) 2015/849 on simplified and enhanced customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions (The Risk Factors Guidelines)

These guidelines set out factors firms should consider when assessing the money laundering and terrorist financing (ML/TF) risk associated with a business relationship or occasional transaction. They also set out how firms should adjust the extent of their customer due diligence (CDD) measures in a way that is commensurate to the ML/TF risk they have identified.

These guidelines focus on risk assessments of individual business relationships and occasional transactions, but firms may use these guidelines mutatis mutandis when assessing ML/TF risk across their business in line with Article 8 of Directive (EU) 2015/849.

The factors and measures described in these guidelines are not exhaustive and firms should consider other factors and measures as appropriate.

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.

EMIR and the regulatory and implementing technical standards made under it establish requirements which are consistent with the Principles for Financial Markets Infrastructures (PFMIs) published by the Committee on Payment and Settlement Systems and the Board of the International Organization of Securities Commissions (CPSS-IOSCO). According to this ESMA guideline, when carrying out the duties resulting from EMIR for the authorisation and supervision of CCPs, national competent authorities should ensure that CCPs etablished in their territory comply with these requirements in accordance with the PFMIs and operate in a manner that is consisent with them.

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 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 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.