The European Securities and Markets Authority (ESMA) has today published a peer review on how national regulators assess compliance with MiFID’s suitability requirements when firms provide investment advice to retail clients...
These requirements are designed to ensure that firms only recommend suitable investment products, based on the investor’s profile.
Overall, ESMA found that while most national regulators have a good understanding of the investment advice market in their jurisdictions and regularly review the distribution methods and business models of investment firms, there is scope to adopt more proactive supervisory approaches and strengthen enforcement activities.
Steven Maijoor, ESMA Chair, said: “The MiFID suitability requirements are a key component of Europe’s investor protection framework and ESMA expects national competent authorities to be vigilant in ensuring firms comply with these important requirements.
“Supervisory convergence is high on ESMA’s agenda, as we stated in our 2016-2020 strategy, and the findings from this review show the importance of this work.”
ESMA found that:
The findings of this peer review will help ESMA identify those areas where there is a need for further supervisory convergence among regulators.
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