On 17 February 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on the implementation of investor protection topics under MiFID II and MiFIR. The updated Q&As now include new answers on MiFID II practices for firms selling financial instruments subject to the resolution regime under the Bank Recovery and Resolution Directive.
The new Q&As provides clarification on:
- sales of subordinated eligible liabilities and the assessment of suitability;
- whether Article 44a of the revised BRRD (BRRD 2) should apply only if there is an active offering on the part of the firm;
- information to be collected from clients in order to comply with Article 44a(1) and 44a(2) of BRRD 2;
- calculation of 10% threshold referred to in Article 44a(2)(a) of BRRD 2;
- what happens if a transaction relating to subordinated eligible liabilities is deemed unsuitable by the firm, but the retail client wishes to proceed anyway?
- monitoring of 10% threshold referred to in Article 44a(2)(a) of BRRD 2.
