ESMA to launch Common Supervisory Action on MiFID II conflicts of interest requirements

The European Securities and Markets Authority (ESMA) will initiate a Common Supervisory Action (CSA) in 2026. This action will involve National Competent Authorities (NCAs) and focus on conflicts of interest in financial instrument distribution. The CSA aims to evaluate how firms adhere to MiFID II regulations concerning the identification, prevention, and management of such conflicts. Specifically, it will examine the influence of staff remuneration and inducements on product offerings to retail clients. The role of digital platforms in guiding investors toward particular products will also be scrutinized. Furthermore, the CSA will investigate how firms balance their own financial gains with the best interests of retail investors. ESMA anticipates that this collaborative effort will promote uniform application of EU rules. This initiative is designed to bolster investor protection across the European Union. The findings and exchanged best practices are expected to enhance regulatory consistency. Ultimately, this leads to stronger safeguards for retail investors engaging with financial products.