The European Securities and Markets Authority (ESMA) has officially scrapped RTS 28 best execution requirements following the milestone agreement reached last summer by the European Union and Parliament.
In a statement released on 13 February, ESMA said it no longer expected National Competent Authorities (NCAs) to prioritise supervisory actions towards investment firms relating to the periodic reporting obligation to publish the RTS 28 reports.
“ESMA stresses the importance of the best execution requirements under both the current and the reviewed Mifid II framework,” the regulator said in its Tuesday statement.
“So, apart from the content of this statement, investment firms are required to strictly adhere to best execution requirements and NCAs are expected to supervise their compliance.”
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The European Union and European Parliament reached a political agreement concerning the Mifid/Mifir review in June last year after a lengthy consultation process.
Among the topics discussed was the deletion of Article 27 under Mifid II which requires firms to make public the top five execution venues they executed client orders in the preceding year and information on the quality of the execution obtained. Article 28 specifies further format and content relating to this information.
Behind the proposed deletion were claims by market participants that the reports are “hardly read and do not enable investors or other users of those reports to make meaningful comparisons based on the information provided”.
ESMA confirmed that after the date of entry into the new directive amending Mifid II, member states will have 18 months to convert it into national law. Some firms may have to continue reporting until this takes place in their respective member state.
However, from 13 February, ESMA has advised that NCAs do not prioritise supervisory action towards firms relating to RTS 28.