ESMA MiFID II Suitability Requirements Around Sustainability

ESMA has published its final report guidelines on selected aspects of the MiFID II suitability requirements, including specifically around sustainability.

So what does this mean for your organisation?

The main four categories of amendments to suitability requirements on the topic of sustainability are:

1.      Help clients to understand the concept of sustainability preferences, to differentiate between products with or without sustainability features, and in a clear manner that the client can understand
2.      Collect client sustainability preferences, and how much the client wishes to invest in such products
3.      Assess sustainability preferences alongside the client’s knowledge/experience, financial situation and other investment objectives, to identify the right products for the client’s suitability preferences
4.      Train staff appropriately on sustainability topics, and upon acting in the client’s best interests for their sustainability preferences

Once the guidelines have been translated into the official languages of the EU and published on the ESMA website, National Competent Authorities will have two months to notify ESMA whether they intend to comply with the guidelines. The guidelines will then apply six months after publication date (yet TBA)

Contact Jonathan Boswell to see how Investment Solutions Consultants (ISC) Ltd can assist you…