We disagree with an extension of its scope to UCITS’ and AIFs’ management companies to the scope of the reporting requirements imposed by MiFIR, Art. 26. This extension would be in breach of the principle of proportionality, as:
- it would apply to none-core activities of UCITS and AIFS and would only identify only a few (if any) market activities to report,
- ESMA does not demonstrate the existence of market abuses detected,
- ESMA and NCAs can already associate the transactions with the decision makers in most cases (notably through the reporting provided by trading venues under MiFIR, Art. 26 para. 5),
- Contrary to ESMA views, introducing MiFIR reporting for UCITS management companies and AIFM would not create a level playing field. Market participants have the free choice to operate either as investment firm or in consideration of the requirements for UCITS’ or AIFs’ management companies. Licenses and requirements are different and market participants can switch licenses at any time but each model has specificities,
- extending the scope of Art. 26 MiFIR would create disadvantages in comparison to UK UCITS Management Companies when applying for portfolio management mandates outside EU-27.
Considering the cornerstone’s role of the principle of proportionality in EU legislation, should ESMA envisage to impose additional reporting to UCITS’ and AIFs’ management companies, those implementing burden must be minimised. In that perspective and rather than amending Art. 26 of MiFIR, we suggest introducing two new reporting fields, which could deliver ESMA’s required information but with a much lower burden to the financial industry For that same effect, we encourage ESMA to take into account alternatives which could reduce the reporting burden for market participants such as HTRM . Our proposed approach can be adopted with respect to EMIR, SFTR and MiFIR.
We also remind ESMA of the compulsory need to identify all financial instruments with ISINs, even if they were bespoke transactions like some derivatives transactions.