The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, recently concluded a common supervisory action (CSA), implemented together with National Competent Authorities (NCA’s) on pre-trade controls under the Markets in Financial Instruments Directive II (MiFID II).
The CSA was launched with the goal of gathering further detailed insights on how investment firms are using pre trade controls across the European Union. The results highlighted that most investment firms have integrated pre-trade controls in their trading activity and in their risk management framework. Nevertheless, it appears that practices related to the implementation and governance are often divergent and not always robust.
Next steps
ESMA will further analyse the results gathered and publish guidance, including clarifications and best practices, in the coming months. The objective of such guidance will be to foster common practices among EU firms in the implementation and governance of pre-trade controls.
