Changes from report parliamentary committee draft to plenary report

Added(68) ‘online interface’ means any software, including a website, part of a website or an application, including a mobile application;

RemovedDirective 2014/65/EU

Added(68a) ‘finfluencer’ means a natural or legal person carrying out a commercial influence activity by mobilising their popularity to communicate to the public, by electronic means and for any sort of remuneration as defined in Article 2, point (5), of Delegated Regulation (EU) 2017/565, content aimed at promoting, directly or indirectly, financial products or contracts;’;

RemovedArticle 1 – paragraph 1 – point 13, Article 24c – paragraph 6: 6. Member States shall ensure that national competent authorities can take timely and effective action in relation to any marketing communication or marketing practice that do not comply with requirements laid down in paragraphs 1 to 3.

Added(3a) Article 5(4), point (a) is replaced by the following:

RemovedAlignment with Article 26a of Directive (EU) 2016/97.

Added‘(a) any investment firm which is a legal person has its head office in the same Member State as its registered office, in which it carries out its business, operates fully within the single market and utilises the freedom to provide services. The Member State shall ensure that the investment firm has sufficient understanding of the risk and legal requirements to which it or its clients are subject, and acts in a manner consistent with Union law and the principles of the single market;’;

RemovedDirective 2014/65/EU

Added(4) the following Article 5a is inserted:

RemovedArticle 1 – paragraph 1 – point 13, Article 24c – paragraph 8 – introductory part: 8. The Commission is empowered to adopt a delegated act in accordance with Article 89 to supplement this Directive by specifying:

Added‘Article 5a

RemovedAlignment with Article 26a of Directive (EU) 2016/97.

AddedProcedure to address unauthorised activities offered through digital means

RemovedDirective 2014/65/EU

Added1. Member States shall ensure that where a natural or legal person provides investment services or activities online targeting clients within its territory without being authorised under Article 5(1) or national law or where a competent authority has reasonable grounds to suspect that that entity provides such services without being authorised under Article 5(1) or national law, the competent authority takes all appropriate and proportionate measures to prevent the offering of the unauthorised investment services or activities, including related to marketing communication, by resorting to the supervisory powers referred to in Article 69(2). Any such steps shall respect the principles of cooperation between Member States set out in Chapter II.

RemovedArticle 1 – paragraph 1 – point 16, Article 35a – paragraph 1 – subparagraph 1 – point b: (b) the type, scope and scale of services provided and activities carried out in each Member State through the freedom to provide investment services and activities and ancillary services;

AddedThe first subparagraph of this paragraph shall also apply to finfluencers that are remunerated or incentivised through non-monetary compensation by a firm which is not authorised under Article 5(1) or national law, where such finfluencer promotes through public social media platforms services or financial instruments on behalf of such a firm.

RemovedAll information contained in the reporting is useful also as regards the Home Member State, since Home NCAs will find it useful to have the full picture of the firm’s activity, including in its home jurisdiction.

Added2. Member States shall provide that competent authorities publish any decision imposing a measure taken pursuant to paragraph 1, in accordance with Article 71.

RemovedDirective 2014/65/EU

AddedCompetent authorities shall inform ESMA of any such decision without undue delay. ESMA shall establish an electronic database containing the decisions submitted by competent authorities, which shall be accessible to all competent authorities. ESMA shall publish a list of all existing decisions, describing the natural or legal persons concerned and the types of services or products provided. The list shall be accessible to the public through a link on ESMA’s website. As regards natural persons, this list shall not lead to the publication of more personal data of those natural persons than that published by the competent authority pursuant to the first subparagraph, and in accordance with Article 71(1).’;

RemovedArticle 1 – paragraph 1 – point 16, Article 35a – paragraph 1 – subparagraph 1 – point c: (c) for each Member State, the total number and the categories of clients corresponding to the services and activities referred to in point (b), and provided during the relevant period ending on the 31 December and a breakdown between professional and non-professional clients;

Added(5) Article 7 is amended as follows:

RemovedAll information contained in the reporting is useful also as regards the Home Member State, since Home NCAs will find it useful to have the full picture of the firm’s activity, including in its home jurisdiction.

Added(a) in paragraph 3, the following subparagraph is added:

RemovedDirective 2014/65/EU

Added‘Where the authorisation has not been granted, the competent authority shall inform ESMA about the reasons for not granting the authorisation without undue delay.’;

RemovedArticle 1 – paragraph 1 – point 16, Article 35a – paragraph 1 – subparagraph 1 – point d: (d) the number of complaints referred to under Article 75 received from clients and interested parties in each Member State;

Added(b) the following paragraph 3a is inserted:

RemovedAll information contained in the reporting is useful also as regards the Home Member State, since Home NCAs will find it useful to have the full picture of the firm’s activity, including in its home jurisdiction.

Added‘3a. ESMA shall establish and make available to competent authorities a list of all entities that have been refused authorisation.

RemovedDirective 2014/65/EU

AddedThe list shall contain information on the services or activities for which each investment firm has sought authorisation, as well as the reasons for the refusal to grant the authorisation and shall be updated on a regular basis.’;

RemovedArticle 1 – paragraph 1 – point 16, Article 35 a – paragraph 1 – subparagraph 1 – point e: (e) the type of marketing communications used in Member States.

Added(6) Article 8 is amended as follows:

RemovedAll information contained in the reporting is useful also as regards the Home Member State, since Home NCAs will find it useful to have the full picture of the firm’s activity, including in its home jurisdiction.

Added(a) the second paragraph is replaced by the following:

RemovedDirective 2014/65/EU

Added‘Every withdrawal of authorisation shall be notified to ESMA, without undue delay. The competent authority shall inform ESMA about the reasons for withdrawing the authorisation.’;

RemovedArticle 1 – paragraph 1 – point 17 – point c, Article 69 – paragraph 2 – subparagraph 1 – point w: (w) to impose the use of risk warnings by investment firms in information materials, including marketing communications, where those instruments could pose a serious threat to investor protection.;

Added(b) the following paragraph is added:

RemovedThis power should be broader and not be limited to ‘risky products’ only. NCAs may need to impose risk warnings for other reasons than excessive risk (e.g., excessive complexity of certain products).

Added‘The list referred to in Article 7(3a) shall also contain all entities from which authorisation has been withdrawn, as well as information on the services or activities for which each investment firm has been withdrawn authorisation, and the reasons to withdraw the authorisation.’;

RemovedDirective 2014/65/EU

Added(7) Article 9(3) is amended as follows:

RemovedArticle 1 – paragraph 1 – point 17 – point c, Article 69 – paragraph 2 – subparagraph 1 – point w a (new): (wa) use webscraping techniques and tools to collect online data for monitoring, surveillance, detection and investigation purposes.

Added(a) the first subparagraph is replaced by the following:

RemovedNational competent authorites should be enabled to use webscraping tools in order to perform their monitoring, surveillance, detection and investigation activities in view of the new models of communication emerging from social networks and, more broadly, online platforms. This will in particular make them fit to detect online scams and frauds, as well as false rumours aimed at price manipulation.

Added‘Member States shall ensure that the management body of an investment firm defines, oversees and is accountable for the implementation of the governance arrangements that ensure effective and prudent management of the investment firm including the segregation of duties in the investment firm, the prevention of conflicts of interest and the protection of investors, and in a manner that promotes the integrity of the market and the best interest of clients.’;

RemovedDirective 2014/65/EU

Added(aa) in the second subparagraph, point (a) is replaced by the following:

RemovedArticle 1 – paragraph 1 – point 21, Article 87a – paragraph 6: 6. In the event of disagreement within the platform and where there are serious concerns about negative effects on investors or about the content of an action or inaction to be taken in relation to an investment firm, ESMA may decide to initiate and coordinate joint on-site inspections. ESMA shall invite the competent authority of the home Member State as well as other relevant competent authorities of the collaboration platform to participate in such joint on-site inspection.

Added‘(a) the organisation of the firm for the provision of investment services and activities and ancillary services, including the skills, knowledge and expertise required by personnel, the resources, the procedures and the arrangements for the provision of services and activities, taking into account the nature, scale and complexity of its business and all the requirements the firm has to comply with. The policy shall ensure that the monetary and non-monetary benefits to the clients are taken into consideration;’;

RemovedIn the circumstances covered by paragraph 6 (disagreement, serious threat), it is justified and legitimate to empower ESMA to initiate and coordinate a joint on-site inspection. This will be much more efficient than a mere recommendation to the Home NCA, as the Commission proposes.

Added(b) in the second subparagraph, the following point (d) is added:

RemovedDirective (EU) 2016/97

Added‘(d) a policy on marketing communications and practices, aiming to ensure compliance with obligations set out in Article 24c.’;

RemovedArticle 2 – paragraph 1 – point 2 – point c a (new), Article 3 – paragraph 7 a (new): (ca) the following paragraph is added: / “7a. Member States shall ensure that competent authorities refuse registration if an insurance, reinsurance or ancillary insurance intermediary, which is a legal person, has its head office in the same Member State as its registered office but provides or performs investment activities solely in other Member States.”;

Added(8) Article 16 is amended as follows:

RemovedIntroducing an anti-forum shopping principle in line with Article 5(4)(a) in Directive 2014/65/EU.