ESMA Finds Best-Execution Compliance under MiFID at Low Level

The European Securities Markets Authorities ("ESMA") published a peer review report on best execution under MiFID. The report found that the implementation level of best-execution provisions and of convergence of supervisory practices by national competent authorities ("NCAs") was "relatively low."

ESMA called on NCAs to streamline their oversight of investment firms' application of best-execution rules for client trades by making a number of improvements, including the following:

• prioritizing best execution as a key business conduct requirement;
• allocating sufficient resources to supervise best execution; and
• taking a more proactive supervisory approach to monitoring compliance with best-execution requirements.

The report also provided recommendations for future work by NCAs and ESMA that could promote the implementation, supervision and enforcement of the best execution rules, including providing guidance for the national implementation of MiFID rules and assessing the adequacy of NCAs' resources.

See: ESMA Peer Review Report.