On 13 July, ESMA proposed guidelines on MiFID II suitability provisions.
- Follows ESMA 2012 guidance on MiFID for suitability and compliance units.
- Covers guidelines to enhance clarity and foster convergence in suitability requirements.
- Key principles remain unchanged since MiFID but has strengthened certain obligations.
- Guidelines make reference to fact that robo-advisers do not reduce a firm’s responsibility.
- That firms must provide a statement on suitability prior to the conclusion of transaction.
- Further details on conduct rules for firms providing a periodic assessment of suitability.
- Requires firms to take into account whether equivalent products might meet client needs.
- And requires firms analyze costs and benefits of switching from an investment to another.
- Must also consider clients’ risk tolerances and extends suitability to structured deposits.
- Comments are due by 13 October 2017.