In This Issue:
Opinions and Warnings – ESMA’s Views on Complex Products; SEC Releases Draft Strategic Plan; Distributing Structured Notes from a Regulation S Platform; and Non-U.S. Equity Underliers and Exchange Rate Risks.
Excerpt from Opinions and Warnings – ESMA’s Views on Complex Products:
The European Securities and Markets Authority (ESMA) finally published its views on the regulation of structured products on 7 February 2014, focusing in particular on selling practices relating to “complex” investments. Accepting that EU regulatory requirements in this area (as set out in the Markets in Financial Instruments Directive (MiFID)) should already “be sufficient, if correctly applied, supervised and enforced,” ESMA felt it necessary to provide a detailed opinion (the “Opinion”) to national competent authorities (NCAs), serving as both a reminder of their existing duties and obligations when regulating the marketing and sale of complex products under MiFID, as well as providing additional color with respect to the approach that should be taken in order to ensure compliance. The existing approach under MiFID, it feels, is the right one. The execution, however, is lacking—particularly with respect to the conduct of business rules, such as information to clients, suitability and appropriateness. Accordingly, the intention is to find some “common ground where possible for distribution frameworks of complex structured products across the Union”.
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