EU Regulatory Updates

Author: Clerkin Lynch LLP

Date Published 06/12/2022

Consultation on Investment Firms Passporting

17 November 2022

The European Securities and Markets Authority (“ESMA”), the EU’s overall financial markets regulator and supervisor, has launched a consultation process on the technical standards applicable under Article 34 of the Markets in Financial Instruments Directive (MiFID II), covering the provision of investment services across the EU.


It is proposing adding the following items to the information that investment firms are required to provide at the passporting stage:

  • the means of marketing it will use in host Member States;
  • the language(s) which the firm has the necessary capacity to deal with complaints from clients from each of the host Member States in which it provides services;
  • which Member States the firm will actively use its passport as well as the categories of clients targeted; and
  • the firm’s internal organisation in relation to the cross-border activities of the firm.


Provision of investment services through the use of the passport is a key element of the single market of financial services which fosters competition and expands the range of services and investment products available to consumers.


Lately, ESMA and the National Competent Authorities (“NCAs”) have noted a continued increase in cross-border activities to retail clients provided under the MiFID II free provision of services regime. This increase results from several factors, including the development of the single market and the digitalisation of financial services, which further facilitates firms to provide services across borders. The pandemic has also created conditions that contributed to an increase in retail investors’ exposure to securities markets, including cross-border. While this has been welcomed by ESMA, the increase in cross-border activities by investment firms means that NCAs need to increase their focus on the supervision of cross-border activities and on cooperation.


The consultation closes on 17 February 2023 and ESMA expects to publish a final report by the end of 2023 so a further update the relevant regime for passporting is expected then.