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loan mismatches; and (2) to introduce a general anti-abuse rule.

In May 2014, the Council agreed to split the pro- posal and address the two issues separately. As a first step, the Council adopted in July 2014 pro- visions preventing corporate groups from using hybrid loan arrangements to benefit from double non-taxation under the Directive. What’s in there? On 9 December 2014, the Council of the European Union approved the introduction of a general an- ti-abuse rule (“GAAR”) in the EU Parent-Subsidiary Directive. With this amendment the EU has taken a further significant step towards preventing tax avoidance and aggressive tax planning by corpo- rate groups. The purpose of the GAAR amendment is to prevent the abuse of the Parent-Subsidiary Directive by tax- payers who can otherwise fall within the scope of its application. This is to be done by tackling arrange- ments that are “not genuine” in the sense that they are not put in place for valid commercial reasons which reflect economic reality. The Council has confirmed that Member States will endeavour to inform each other, under the existing EU legal instruments, when information may be useful to another Member State. THE POLITICAL AGREEMENT OF THE COUNCIL ON THE GAAR AMENDMENT TO THE PARENT- SUBSIDIARY DIRECTIVE IS AVAILABLE HERE. What’s next? The Council Directive amending the Parent-Sub- sidiary Directive will be adopted at a forthcoming Council session without further discussion. Member States will have until 31 December 2015 to implement the amending Directive by introduc- ing an anti-abuse rule into their national laws. The same deadline applies to implementation of the amendments to tackle hybrid loan mismatches. Once the GAAR enters into force, by in effect requir- ing any holding company to have “valid commercial reasons which reflect economic reality” for its inclu- sion in any ownership chain, a holding company will have to have real substance. The Council will take into consideration the an- ti-abuse provision in its future work on a possible anti-abuse provision to be included in the Interest and Royalties Directive (Directive 2003/49/EC). 

tation Paper published by ESMA on 22 May 2014 and should be read in conjunction with the latter. The TA is divided in the eight sections: (1) Intro- duction; (2) Investor protection; (3) Transparency; (4) Data publication; (5) Micro-structural issues; (6) Requirements applying on and to trading venues; (7) Commodity derivatives; and (8) Portfolio com- pression. The key points in ESMA’s TA are the following: 1) Product governance obligations for investment firms manufacturing and/or distributing financial instruments and structured deposits, taking into account the nature of the investment product, the investment service and the target market for the product. 2) Requirements for firms to provide retail clients, professional clients and eligible counterparties with detailed information on all costs and charges linked to their investment. Disclosure requirements include cost aggregations, ex-ante and ex-post disclosure and information on the cumulative effect of costs on the return. 3) Clarifications on the circumstances in which the provision of research by third parties to investment firms providing portfolio management (or other in- vestment or ancillary services) to clients should not be regarded as an inducement. 4) Non-exhaustive list of circumstances and situ- ations where inducements do not meet the qual- ity enhancement requirement for the provision of advice. I. Improvement of investor protection

ESMA publishes final technical advice on MiFID II/MiFIR Background Directive 2014/65/EU on markets in financial in- struments (“MiFID II”; available here) and Regula- tion (EU) No 600/2014 on markets in financial in- struments (“MiFIR”; available here) were approved by the European Parliament on 15 April 2014 and by the Council of the EU on 13 May 2014. The two texts were published in the Official Journal of the EU on 12 June 2014 and entered into force on 2 July 2014. MiFID II and MiFIR aim at bringing greater trans- parency and improve the overall functioning of the EU’s financial markets, thus strengthening investor protection. They cover both secondary markets and investor protection issues. On 23 April 2014, ESMA received a formal request (available here) from the European Commission to provide technical advice to assist the Commission on the possible content of the delegated acts re- quired by several provisions of MiFID II and MiFID. What’s in there? On 19 December 2014, ESMA published its final technical advice (“TA”) to the Commission on the implementation of MiFID II and MiFIR through prac- tically applicable rules. The TA follows the structure of the relevant Consul-

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