On 5 February 2020, the European Securities and Markets Authority (ESMA) announced the launch of a common supervisory action (CSA) with Member State national competent authorities (NCAs) concerning the application of the suitability requirements under the MiFID II Directive.

The CSA will enable ESMA and the NCAs to assess the progress made by intermediaries in applying the suitability requirements and how firms take into account the costs of investment products when recommending them to a client. ESMA believes that this initiative will help ensure consistent implementation and application of EU rules and enhance the protection of investors as well as improve NCA’s understanding of supervisory approaches in line with ESMA’s objectives.

The CSA will be conducted throughout 2020.