MiFID II suitability assessment: the AMF applies the updated ESMA guidelines
The Autorité des Marchés Financiers (AMF) has published an update to its Position DOC-2019-03 to incorporate updates to the guidelines issued by the European Securities and Markets Authority (ESMA) on certain aspects of the MiFID II suitability requirements. The AMF also updaties its Position-Recommendation DOC-2006-23 to extend the scope of these revised guidelines to financial investment advisers (FIAs). The updated positions will come into force on 3 October 2023.
Background
At the end of 2021, ESMA began a project to update its guidelines on suitability assessment when providing investment advice or portfolio management services to reflect:
- the publication of Delegated Regulation (EU) 2021/1253, which came into force on 2 August 2022 and requires investment service providers to collect any sustainability preferences the client may have when carrying out the suitability assessment;
- implementation issues identified in particular during the 2020 common supervisory action on this subject.
ESMA’s final report on this update was published on 27 September 2022. The translated versions of the revised guidelines were published on 3 April 2023.
Fostering greater convergence
The AMF has incorporated the new version of the ESMA guidelines on certain aspects of the MiFID II suitability requirements into its updated Position DOC-2019-03.
These revised guidelines will apply from 3 October 2023 and are designed to clarify the implementation of these requirements and foster greater convergence in their interpretation and supervision. They will accordingly strengthen investor protection.
In particular, ESMA provides clarification in the following guidelines on the requirement to take into account any sustainability preferences clients may have:
- information to clients about the purpose of the suitability assessment and its scope;
- arrangements necessary to understand clients;
- updating client information;
- arrangements necessary to understand investment products;
- arrangements necessary to ensure the suitability of an investment.
Position DOC-2019-03 applies to investment firms, credit institutions and management companies providing investment advice and/or portfolio management services.
Scope extended to FIAs
As FIAs operate under a French national regime, the ESMA guidelines do not apply directly to them. However, under the AMF General Regulation, they must comply with rules analogous to those that apply to investment services providers with regard to checking the suitability of investment advice, including their clients’ sustainability preferences. In view of this, the AMF has decided to extend the scope of these updated guidelines to FIAs. The associated update of Position-Recommendation DOC-2006-23 will also apply from 3 October 2023.
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