On 28 May 2018, the European Securities and Markets Authority published its Final Report – Guidelines on certain aspects of the MiFID II suitability requirements. The Report addresses key issues AIMA raised on behalf of members in our response to the consultation in October 2017, as follows:

• ESMA has provided additional explanation on how client categorisation should be taken into account when applying specific guidelines. ESMA also encourages firms to apply the requirements proportionately, specifically clarifying that the Guidelines are applicable principally in relation to retail clients, and will apply “to the extent they are relevant” in relation to services provided to professional clients.
• ESMA has addressed specific concerns raised, by confirming that, for per se professional clients, a cost/benefit analysis of switching investments need only be carried out on the investment strategy. This avoids the need to conduct a cost/benefit analysis in relation to re-balancing or adjustment of a client portfolio (often on a daily basis).

If members have any questions, please contact Adele Rentsch or Adam Jacobs-Dean.