Esma clarifies Opinion as it affects AMs post Brexit

The European Securities and Markets Authority (Esma) has provided further information relating to its broader Opinion, published in May (see below), that more precisely outlines its thoughts on the principles it expects the asset management sector to adhere to as it adjusts to a post Brexit environment.

The Authority is seeking “consistency in authorisation, supervision and enforcement related to the relocation of entities, activities and functions from the United Kingdom” that it expects following the referendum that took place in the UK on 23 June 2016, and which led to the triggering of Article 50 negotiations in Brussels between the UK and the EU27 on the terms of its exit.

Esma says that the latest updated Opinions are intended to provide “practical tools” for in particular national competent authorities (NCAs) which are responsible for implementing the European securities and markets regime at the individual member state level. Esma is concerned that the NCAs

The opinions, building on the general opinion issued in May, are practical tools to support supervisory convergence in the context of requests from UK financial market participants seeking to relocate to the EU27. They are addressed to national competent authorities (NCAs) and are relevant for market participants considering relocating.

They provide guidance to NCAs aimed at ensuring a consistent interpretation of the requirements relating to authorisation, supervision and enforcement in order to avoid the development of regulatory and supervisory arbitrage risks.

This arbitrage risk was flagged up by Esma chair Steven Maijoor at the Alfi European Asset Management Conference 2017, which took place in March. This preceded the official Opinion published in May, which put down a marker for EU member state governments not to engage in activity that could seek to entice business away from London, but be done in a way that could constitute a threat to the objectives of regulatory harmonisation.

The latest guidance and principles are outlined in an Esma document here:

However, there may still be concerns around this guidance. The last Opinion note drew criticism from specialist lawyers, who warned that the Opinion itself could create problems in respect of existing regime implementation by EU institutions (see below).


Esma opinion on NCAs post-Brexit misjudged, says law firm

Esma outlines rules for AMs to move from UK to EU post-Brexit



Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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