Following the public consultation launched in 2019 on draft guidelines on certain aspects of the MiFID II compliance function requirements, on 5 June 2020 the European Securities and Markets Authority (“ESMA”) published the final guidelines on the MiFID II compliance function, which guidelines replace the ESMA guidelines on the same topic issued in 2012 and are designed to establish consistent, efficient and effective supervisory practices and to ensure the common, uniform and consistent application of certain aspects of the MiFID II compliance function.
The guidelines are addressed to investment firms and credit institutions providing investment services and activities, investment firms and credit institutions selling or advising clients in relation to structured deposits, UCITS management companies and alternative investment fund managers when providing investment services and activities in accordance with the UCITS Directive and the AIFMD.
ESMA expects that these new guidelines promote greater convergence in the implementation, and supervision, of the new MiFID II compliance function requirements and enhance the value of existing standards. The twelve guidelines cover (i) responsibilities of the compliance function, including guidelines on compliance risk assessment, monitoring and reporting obligations, and advisory and assistance obligations, (ii) organisational requirements of the compliance function, including guidelines on effectiveness, skills, knowledge, expertise and authority, permanence and independence, and outsourcing of the compliance function and (iii) competent authority review of the compliance function.
The guidelines will be translated into the official EU languages and then published on ESMA's website and they will become applicable two months after the translations are published.
A copy of the guidelines can be obtained by clicking here.
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