ESMA in its recent press release has identified costs and performance for retail investment products and market data quality as the Union Strategic Supervisory Priorities for NCAs in 2021.
Under these Priorities, ESMA urges NCAs to undertake supervisory action, coordinated by ESMA in:
- costs and fees charged by fund managers
- improving the quality of transparency data reported under MiFIR.
Regarding market data quality, a better understanding of the requirements by market participants could help to avoid poor and late reporting. Improving data quality is important to investors, market participants and regulators as reliable and timely data is needed to prevent and detect market abuse, provide transparency calculations and identify systemic and counterparty risk.
The area of costs and performance is also a key part of investor protection. Unfair and disproportionate costs and fees can increase investor detriment and affect investors’ trust in financial markets. Investment firms and fund managers should ensure that costs and charges are reasonable and disclosed in a transparent and non-complex manner.