03 September 2013

FECIF comments on ESMA consultation on MiFID holdings

The European Federation of Financial Advisers and Financial Intermediaries submitted its response to ESMA's consultation paper on draft RTS on information requirements for assessment of acquisitions and increases in holdings in investment firms (MiFID).

Introductory note

The draft specifies in its title “Regulatory Technical Standards on information requirements for assessment of acquisitions and increases in holdings in investment firms”. However, referring to page 9 § 7 under i) small non-complex investment firms that do not hold client assets, FECIF feels that there is room to address any non-investment classified company that decides to purchase another firm, irrespective of their core business. If this [was] not originally intended, FECIF suggests that a provision in the final draft should exclude any commercial firm. In FECIF's opinion this will not succeed as FECIF reads (in its interpretation of the text) that any holding company will be subject to these rules. This represents, in FECIF's opinion, a real danger as any acquisition by a commercial, (non-financial) services or industrial firm will fall under these guidelines irrespective of the aim of the acquisition pursued, as they will be considered as holding companies per se.

Referring to page 8 § 5, FECIF cannot accept that the same burden in terms of required information is placed on different subjects irrespective of the fact that a person’s acquisition originates from “a large complex investment firm or a small two person operation”. This implies that the systemic risk is assumed to be of the same nature regardless the size or nature of the firm.

Referring to § 6 “if the proposed acquirer intends on changing”, it is one thing to “intend” and another to “succeed”. One can always change his mind once the acquisition is done, as the Promised Land is often not a bunch of roses, or if it is, it has also the thorns with it. The text assumes that strategy is there to stay, once and for all. However, a minimum of adjustment and leeway should be allowed. It would be much more efficient to judge ex-post than ex-ante as any speculation exercise can only be a wishful of good intentions, for it cannot be backed by any hard evidence.

Full response

Original ESMA consultation: Draft RTS on information requirements for assessment of acquisitions and increases in holdings in investment firms (MiFID), 8.7.13

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