ESMA consults on the review of MiFID II suitability guidelines

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is consulting on certain aspects of suitability requirements under the Markets in Financial Instruments Directive (MiFID II), in order to update its  guidelines following amendments to MiFID II relating to sustainability.

The assessment of suitability is one of the most important protections for investors under MiFID II and applies to the provision of all types of investment advice (whether independent or not) and portfolio management.

Proposed Guidelines on certain aspects of the MiFID II suitability requirements

The main amendments introduced to the MIFID II Delegated Regulation and reflected in the guidelines on the topic of sustainability are:

Collection of information from clients on sustainability preferences – Firms will need to collect information from clients on their preferences in relation to the different types of sustainable investment products to what extent they want to invest in these products;

Assessment of sustainability preferences – Once the firm has identified a range of suitable products for client, in accordance with the criteria of knowledge and experience, financial situation and other investment objectives, it shall identify - in a second step - the product(s) that fulfil the client’s sustainability preferences; and

Organisational requirements – Firms will need to give staff appropriate training on sustainability topics and keep appropriate records of the sustainability preferences of the client (if any) and any updates of these preferences.

The review of this set of guidelines is also the opportunity to consider other relevant factors such as:

the integration of the good and poor practices identified in the 2020 Common Supervisory Actions (CSA) to complement the current guidelines. These good and poor practices will give practical guidance to firms in the areas where lack of convergence still seems to persist; and

the  amendments introduced through the Capital Markets Recovery Package to Article 25(2) of MiFID II.  Steps

The consultation closes on 27 April 2022. ESMA will consider the feedback it receives to the consultation in Q2 2022 and expects to publish a final report in Q3 2022.

Further information:

Solveig Kleiveland

Senior Communications Officer

✆   +33 (0)1 58 36 43 27

@   press@esma.europa.eu