ESMA publishes MiFID II supervisory briefing on suitability

Chris Hamblin

19 November 2018

This publication is an updated version of ESMA’s supervisory briefing of 2012 and takes into account the content of ESMA’s guidelines to do with certain aspects of the MIFID II suitability requirements, which it published on 28 May.

The supervisory briefing covers the following topics:

how to spot situations where the suitability assessment is required;
information that must go to clients about the purpose of the suitability assessment;
how to obtain information from clients;
arrangements necessary to understand investment products;
arrangements necessary to understand the suitability of an investment;
suitability reports;
qualifications of staff at firms; and
recordkeeping.

The briefing is aimed at national regulators and its contents will be passed down the line to firms. It is also meant to give market participants indications of compliant implementation of the MiFID II suitability provisions. The overarching aim is to promote the same supervisory approaches and practices among regulators when they are enforcing MiFID II's suitability rules.