Recently, the European Securities and Markets Authority (ESMA) announced that it is launching a Common Supervisory Action (CSA) with national competent authorities concerning the application of MiFID II suitability rules. The purpose of the CSA is to promote common supervisory approaches throughout the EU.
ESMA notes that the suitability assessment is a key requirement for investor protection.
In light of this, CySEC and other national competent authorities have agreed to cooperate with ESMA to assess the application of the suitability rules. As a result, CySEC is planning to conduct on-site visits and desk-based reviews on a sample of regulated entities in 2020.
Do the rules apply to you?
Yes, if you are:
- An Investment Firm
- An Alternative Investment Fund Manager
- A UCITS Management Company
and provide investment advice and/or portfolio management services under MiFID II.
Clients and products: Did you make a good match?
The suitability rules require that firms understand the essential facts and characteristics of their clients so that they can offer suitable products. The suitability of a service and/or an investment needs to be assessed against the client’s investment objectives, financial situation, knowledge and experience.
CySEC will check how regulated entities apply the MiFID II suitability requirements and examine whether and how the costs of investment products are taken into account when recommending an investment product and/or when providing portfolio management.
In addition, the CSA will take into consideration the MiFID II supervisory briefing on suitability, which was published by ESMA on November 13, 2018, and the guidelines on certain aspects of the MiFID II suitability requirements that were published by ESMA on November 6, 2018.
How can Complyport EU (formerly MAP S.Platis) assist you?
Our team of experts can offer you the following services:
- Assistance with the revision of your suitability assessment questionnaire.
- Bespoke compliance health-check reviews of suitability policies, controls and procedures and issuance of relevant reports and recommendations.
- Review of the suitability of investments recommended and/or performed on behalf of clients.
- Development and recommendation of tailored and practical remedy actions.
- Training of employees on suitability rules.
- Additional help with Q&As.
Why Complyport EU (formerly MAP S.Platis)?
Complyport EU (formerly MAP S.Platis) is the leading financial services consulting group in Cyprus with clients that include regulators, banks, funds and fund managers, investment firms, insurance companies, and payment and electronic money institutions. Our expert team provides unique and tailored solutions in licensing, regulatory compliance, risk management, internal audit, human resources, banking, regulatory technology, executive training and innovation consulting to financial institutions in Cyprus and the EU. Thanks to our vast regulatory compliance experience supporting local and international financial services institutions, continued interaction with regulatory authorities, multidisciplinary and diverse team of professionals, unparalleled track record, global network of associates and wealth of resources, our internationally recognized and award-winning firm can support any client’s regulatory needs, both efficiently and effectively.
For more information on our services, please contact our team at +357 2535 1335 or via email at info@mapsplatis.com
