Summary of CySEC's Circular C502

Memo #17-2022
CySEC Circular No: C502
Date: 19/04/2022
Subject: ESMA launches a Common Supervisory Approach with NCAs on the application of MiFID II Costs and Charges disclosure rules
Purpose: To inform the CIFs that ESMA announced the 2022 Common Supervisory Approach on ‘MiFID II Costs and Charges.

In Summary:

CySEC has issued the Circular C502 on 19/04/2022 to inform the Cyprus Investment Firms (‘CIFs’) that the European Securities and Markets Authority (‘ESMA’) published on February 8, 2022, an announcement regarding the 2022 Common Supervisory Approach (‘CSA’) on ‘MiFID II Costs and Charges'.

The CSA 2022 will allow ESMA and the National Competent Authorities (NCAs) to assess the application by firms of the MiFID II requirements on costs and charges.

The focus of the CSA will be on information provided to retail clients.

CySEC further informs that in the context of the CSA, CySEC is planning to conduct on-site visits and/or desk based reviews on a sample of CIFs that fall within the scope of the said CSA providing investment services to retail clients.

CySEC notes that for the purposes of the CSA 2022, the following regulatory framework will be taking into consideration:

a. Articles 25(4) (a)(C)(iii) and 25(5) of Law 87 (I)/2017
b. Articles 50(2), in combination with the cost items listed in Annex II, 50(3), 50(4), 50(9) and 50(10) of MiFID II Delegated Regulation (DR)
c. Questions 9.4, 9.5., 9.9, 9.11, 9.12, 9.13, 9.16, 9.17, 9.25, 9.26, 9.33 of the Questions and Answers on MiFID II and MiFIR investor protection and intermediaries topics (ESMA 35-43-349)

CySEC also notes that it expects CIFs to adhere to the content of this Circular C502 as this will form part of CySEC’s supervisory review for the purpose of the 2022 CSA.

The ESMA announcement regarding the 2022 CSA on ‘MiFID II Costs and Charges’ can be found on the following link: https://www.esma.europa.eu/press-news/esma-news/esma-launches-common-supervisory-action-ncas-mifid-ii-costs-and-charges
 
The Questions and Answers on MiFID II and MiFIR investor protection and intermediaries topics (ESMA 35-43-349) can be found on the following link: https://www.esma.europa.eu/sites/default/files/library/esma35-43-349_mifid_ii_qas_on_investor_protection_topics.pdf 

Read the CySEC Circular C502

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