- BaFin's investigation on MiFID II shows some weaknesses but also some progress.
- The implementation of telephone taping requirements has been largely successful.
- But room for improvement in suitability declarations and ex-ante cost information.
- Focused on telephone recordings, suitability statements, ex ante cost information.
- Reviewed 40 banks: 10 savings and cooperative and 20 private and foreign banks.
- Institutes had implemented recording of telephone conversations as early as 2018.
- Previous issues regarding top, start buttons were no longer observed in the study.
- Evaluations show banking employees are guided by the bank's internal guidelines.
- Only 1.5% of customers comment negatively on the record of their conversations.
- Forecast quality of costs is high with 90% of cost statements matching actual cost.
- 98.5% of ex-ante cost information provided on time, on permanent data medium.
- 92.7% comply with Annex II of Delegated Regulation (EU) 2017/565 in their detail.
Different Cost Statements
- Most cost information concerns specific international securities identification number.
- Still some generic cost statements where costs reported regarding whole asset class.
- Generic cost statement decrease from 6.7 percent to 4.5 percent compared to 2018.
- Such cost statements shown to have higher error rate when forecasting entry costs.
- However average forecast deviation increased from 94.5 percent to 155.5 percent.
- Ex-ante cost information still diverse, mainly due to lack of uniform market standard.
- BaFin discussing this with ESMA, supervisory authorities of other EU member states.
- BaFin's main criticism is that in many cases no qualitative comparison between the client's information and the properties of the recommended product is documented.
- Many statements contain blanket formulaic statements and no additional information.
- Documentation regarding cost-benefit analysis re portfolio shifts is also a weak area.