The European Securities and Markets Authority (ESMA) has published an opinion on practices to be observed by investment firms when selling complex financial products to investors. ESMA is issuing this opinion to remind national supervisors and investment firms about the importance of requirements governing selling practices under the Markets in Financial Instruments Directive (MiFID).

The areas covered by the opinion relate to:

  • firms’ organisation and internal controls;
  • the assessment of the suitability or appropriateness of certain products;
  • disclosures and communications in relation to products; and
  • compliance monitoring of the sales functions.

For the purposes of the opinion, complex financial products are those that do not meet the criteria of “non-complex” as set out in article 19(6) of MiFID and article 38 of the MiFID implementing Directive. Financial instruments with structures that make the risks and likelihood of return more difficult to understand, including platforms giving access to complex products, are also likely to be considered ‘complex’.

View Opinion: MiFID practices for firms selling complex products, 7 February 2014