On 24 July 2018, ESMA published a follow-up report to its peer review on suitability requirements under MiFID.
The report looks at the actions taken by National Competent Authorities (NCAs) since April 2016, when ESMA published its previous peer review report. Follow-up work was commenced in December 2017. The key points from the follow-up report include:
- NCAs appear to have made improvements in how they supervise suitability requirements.
- Levels of enforcement action have been mixed.
- ESMA is satisfied that the FCA has addressed the deficiencies raised against the UK relating to the sufficient provision of information on whether firms operating on a branch basis (where the NCA is the host supervisor) and on freedom to provide services (where the NCA is the home authority) were providing investment advice.
- MiFID remains a priority area for ESMA’s supervisory convergence work programme.
MiFID II came into effect on 3 January 2018 and expanded the MiFID suitability provisions by adding additional requirements. The MiFID II guidelines published in May 2018 are an update to the 2012 guidelines issued under MiFID.