On 3 October 2023, the European Securities and Markets Authority (ESMA) announced the launch of a common supervisory action (CSA) on MiFID II sustainability requirements.
ESMA will launch this CSA with Member State competent authorities (NCAs), with the goal being to assess the progress made by intermediaries in the application of the key sustainability requirements which entered into application in 2022, following the amendments to the MiFID II Delegated Acts.
The CSA will cover:
- How firms collect information on their clients’ “sustainability preferences”.
- Which arrangements firms have put in place to understand and correctly categorise investment products with sustainability factors for the purpose of the suitability assessment.
- How firms ensure the suitability of an investment with respect to sustainability (including the use of a “portfolio approach”).
- How firms specify any sustainability-related objectives a product is compatible with as part of the target market assessment of the investment product.
ESMA and the NCAs will carry out the CSA during 2024.