ESMA Guidelines and Recommendations

ESMA calls for consistent application of MiFIR product intervention powers

ESMA Guidelines and Recommendations

Date: 19 January 2017

On 12th January 2016, the European Securities and Markets Authority (ESMA) issued an Opinion regarding the scope of the product intervention powers under the Markets in Financial Instruments Regulation (MiFIR). These powers can be exercised by both national competent authorities (NCAs) and ESMA from 3 January 2018.

Currently, the powers will only apply to MiFID investment firms marketing products which pose risks to retail investors, market integrity, and financial stability in the EU, but do not cover UCITS management companies and Alternative Investment Fund Managers (AIFMs). ESMA is concerned about the potential for regulatory arbitrage and the potential reduction in effectiveness of future intervention measures, and believes that the EU institutions should address this issue.

The Opinion outlines the potential consequences linked to the exclusion of fund management companies from the scope of the powers, including the risk of arbitrage where a type of fund that is restricted or banned under MiFIR could be distributed through fund management companies if they decided to market or distribute the funds themselves.

Steven Maijoor, Chair, said:

“ESMA believes that including fund management companies in scope of the MiFIR intervention regime would ensure a harmonised framework across entities and instruments.

“This would create a level-playing field between MiFID firms and fund management companies, ensuring we appropriately address risks to investors and financial stability.”


From 3 January 2018, ESMA and NCAs will have the power to temporarily prohibit or restrict investment firm’s marketing, distribution or sale of:

  1. units or shares in UCITS and Alternative Investment Funds (AIFs); and
  2. financial instruments with certain specified features.

ESMA and NCAs will also have the powers to prohibit MIFID financial activities or practices which pose risks to investors, market integrity, and financial stability in the EU.  

For more information on MiFID click here