ESMA_QA_2648
Status: ✅ Answer Published
Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/2648
Regulatory Context
Regulation : MIF2
Level 1 Regulation: Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Investor Protection and Intermediaries
Level 2 Regulation: Regulation 2017/565 - MiFID II Delegated Regulation
Level 3 Regulation: ESMA/2012/188 - Guidelines - Compliance function (MiFID)
Topic: Outsourcing
Subject Matter: Outsourcing; Critical and important functions; Principle of Proportionality
Question
Submission Date: 19 September 2025
In light of the first subparagraph of Article 16(5) of Directive 2014/65/EU (MiFID II), as well as Article 2(3) and Article 30(1) of Commission Delegated Regulation (EU) 2017/565, can it be affirmed that where a management company has delegated to an entity the performance of crucial elements of the marketing of UCITS funds, including their registration and listing for marketing purposes, the activity of that entity in entering into brokerage and distribution agreements with third-party intermediaries for the purpose of marketing such funds constitutes outsourcing of a critical and important function?
Furthermore, and in the light of the EBA Guidelines on Outsourcing Arrangements (EBA/GL/2019/02), to what extent does the principle of proportionality guide the assessment carried out during the risk evaluation of such outsourcing arrangements? In particular, do factors such as the continuity and duration of the agreement with third-party intermediaries, the scope and materiality of the delegated tasks, and the frequency and regularity of such delegation have an impact on whether the relationship should be qualified as the outsourcing of a critical or important function under the above-mentioned instruments?
ESMA Answer
Answer Date: 03-12-2025
Dear Madam/Sir, Thank you for contacting ESMA. The selection of questions to be developed into policy Q&As is done according to a number of criteria, which include the following:
Type of stakeholder: Questions received from investors’ and regulated firms’ associations, will be prioritised over questions from individual firms. Geographical origin: EU individuals and entities have priority over non-EU stakeholders. Level of public attention: Topics receiving a higher number of questions will have a higher priority. Relevance of the issue: Questions addressing matters with high market impact, important legal risks and significant cross-border effects will have a higher priority.
We would like to inform you that your suggested question does not appear to be amongst the ones considered of higher priority, at least at this stage. This means that, in view of the number of questions received by ESMA, we are unable to provide you with any further feedback to your question, for the moment. We thank you for your input and invite you to monitor our website where we will continue to publish further Q&As, and other forms of guidance, with the purpose of ensuring the consistent and effective day-to-day application of Union law within ESMA’s remit. Kind regards, ESMA
This document was automatically extracted from the ESMA EMIR Q&A database.