The new Investment Firms Regulation (IFR) and Directive (IRD) will require third-country firms providing investment services and activities in the EU to report granular information to ESMA.
ESMA (European Securities and Markets Authority) has launched a consultation on draft technical standards on the provision of investment services and activities in the EU by third-country firms under MiFIR and MiFID II.
The consultation relates to the EU’s new Investment Firms Regulation (IFR) and Directive (IRD), which introduced changes to the MiFIR and MiFID II regimes, including new reporting requirements for third-country firms and new powers for ESMA allowing it to ask for up to five years of data relating to firm’s EU orders and transactions, whether on their own account or on behalf of a client.
“Third-country firms providing investment services and activities in the [EU] … will be required to report granular information on such services and activities
to ESMA, on an annual basis, and to provide ESMA with access to relevant data,” the consultation paper says.
The data third-country firms will need to report includes information relating to the size and scope of their services and activities, exposures to EU counterparties, the extent of EU financial instruments underwritten or placed on a firm commitment basis, as well as arrangements relating to investor protection, risk management and governance.
ESMA has developed draft technical standards setting out the functioning of the new regime, which will need to be submitted to the European Commission for adoption of the final legal text.
The consultation, available here, is open for comment until 31 March 2020.
ESMA expects to send its final report to the European Commission for endorsement in Q3 2020.
The IFR becomes directly applicable from 26 June 2021.