The European Association of Cooperative Banks (EACB) gladly takes the opportunity to provide evidence to ESMA with respect to the impact of inducements, costs and charges disclosures requirements under MiFID II/ MiFIR. However, we regret the short timeframe over the summer period given to stakeholders to reply to ESMA’s call for evidence. We therefore strongly encourage ESMA to confirm any decisions made out of this call through a subsequent public consultation that should run over a three month period. This will also give time for stakeholders to process recent updates to interpretations published by ESMA on MiFID II and MiFIR, in line with their operational processes and the interpretations of national competent authorities in each Member State.
In the meantime, the EACB members have highlighted the biggest impacts of the relevant rules which we believe are not conducive to the goals of the Capital Markets Union (CMU) of incentivising access to capital markets, particularly for SMEs, namely:
- the reduced demand and supply of MiFID II investment services in the retail client business, due to the requirements on costs and charges disclosures;
- the reduction in the research that covers SMEs due to the research unbundling rules under the inducements disclosures regime; and
- the lack of comparability and comprehension of the information investors must process due to these inefficient rules or inconsistency with other securities legislation, such as the PRIIPS Regulation.
Moreover, we also advocate for the possibility of investment firms to opt out of providing ex-ante and ex-post cost information to professional clients and/or eligible counterparties, and as a temporary solution, for ESMA to clarify the rules on standardized cost information for all products to such clients. This request is also extended to retail clients but under specific conditions.
More details can be found in our position paper.