meta_id 3301846

The European Securities and Markets Authority (ESMA) published a supervisory briefing on triangular passporting, addressing a complex cross-border regulatory scenario within the European Union's investment services framework. Triangular passporting refers to situations where investment firms established in one EU member state provide services to clients in another member state while utilising infrastructure, services, or arrangements provided by entities in a third member state. This structure creates layered regulatory obligations across multiple jurisdictions, requiring coordination between national competent authorities and ESMA to ensure consistent investor protection and market integrity. The briefing clarifies ESMA's supervisory expectations for firms engaging in triangular passporting arrangements. It addresses the application of relevant EU financial services legislation, including the Markets in Financial Instruments Directive (MiFID II) and associated regulations, to these multi-jurisdictional scenarios. The guidance covers key areas including: the allocation of regulatory responsibilities among competent authorities; compliance obligations for firms operating across borders; risk management and governance requirements; and investor protection measures that must be maintained throughout the arrangement. The briefing emphasises that firms must ensure they meet all applicable regulatory requirements in each relevant jurisdiction, regardless of the complexity of their operational structure. National competent authorities should coordinate effectively to prevent regulatory arbitrage and ensure consistent supervision. This supervisory briefing provides practical guidance for investment firms, national regulators, and other market participants seeking to understand their obligations in triangular passporting scenarios. Firms should review their existing arrangements against the principles outlined in this briefing to ensure full compliance with EU investment services legislation. **Reference:** ESMA35-243228190-8065