According to the supervisory briefing, regulated firms must be transparent and precise in their marketing communications. They should disclose all charges and costs related to copy trading services. Offered products must prioritize the clients’ best interests, and firms should ensure that traders whose trades are replicated have the requisite qualifications and expertise.
ESMA and National Competent Authorities’ (NCAs) will continue to monitor the copy trading industry’s progress and may implement further measures in the future to ensure that copy trading complies with the applicable MiFID II requirements and that investment services consistently prioritize clients’ best interests.
The ESMA-prepared supervisory brief takes into account the Q&A published in June 2012 regarding the legal classification of the automatic execution of trade signals.
ESMA and NCAs have indicated that they will continue to monitor developments on this matter and may take additional measures in the future to ensure that copy trading is provided in a manner consistent with the relevant MiFID II regulations and that investment services continue to be provided in the clients’ best interest.
Earlier in the week, ESMA released a statement expounding…
