ESMA published a report on the final guidelines for certain aspects of the Markets in Financial Instruments Directive (MiFID) II suitability requirements. The guidelines in the final report confirm and broaden the existing MiFID I guidelines on suitability, which were issued in 2012.
This final report summarizes and analyzes the responses to the consultation paper on suitability requirements, which ran from July 13, 2017 to October 13, 2017. For finalization of the guidelines, ESMA considered responses received to the consultation, along with the advice of the Securities and Markets Stakeholder Group (SMSG). Along with the guidelines, the report provides the cost-benefit analysis, summarizes the opinion of the SMSG, and contains the feedback statement. The guidelines will be translated in the official EU languages and published on ESMA website. Within two months of the publication of translations, the national competent authorities must notify ESMA whether they comply or intend to comply with the guidelines.
The assessment of suitability is one of the most important requirements for investor protection in the MiFID framework. It applies to the provision of any type of investment advice, whether independent or not, and portfolio management. Investment firms providing investment advice or portfolio management must provide suitable personal recommendations to their clients or have to make suitable investment decisions on behalf of their clients. The guidelines, by supporting a consistent and harmonized application of the requirements in the area of suitability, will ensure that MiFID II’s objectives are achieved. When preparing the final report, ESMA has carefully considered the content of the EC's action plan on sustainable finance. ESMA will also keep monitoring the legislative proposals stemming from the action plan and will consider making focused amendments to the guidelines to reflect changes to the MIFID II delegated acts on the topic of sustainability.
Keywords: Europe, EU, Securities, MiFID II, Suitability Requirements, Guidelines, Investor Protection, Sustainable Finance, EC, ESMA
Previous ArticleEC Regulation and Guideline on Statistics on Holdings of Securities
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.