Final EU Guidelines on Compliance Function Requirements Under MIFID II | Shearman & Sterling LLP

The European Securities and Markets Authority has published final guidelines on the compliance function requirements that are set out in the revised Markets in Financial Instruments package. The final guidelines replace ESMA’s 2012 guidelines issued under MiFID I.

MiFID II requires investment firms to have a robust governance framework. Firms must implement systems and controls, policies and procedures to manage risks and ensure compliance, including regulatory compliance and the establishment of an independent and effective compliance function. MiFID II strengthened the compliance function requirements that were in MiFID I, including by providing that the compliance function has certain responsibilities for the firm’s product governance requirements and requiring the compliance function to advise the firm’s management body on the firm’s remuneration policies.

The final guidelines will apply to investment firms, banks, managers of Undertakings for Collective Investment in Transferable Securities and Alternative Investment Fund Managers two months after the translated versions are published on ESMA’s website.

View the final guidelines.

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