The European Securities and Markets Authority has published new Guidelines on the appropriateness and execution-only requirements under the revised Markets in Financial Instruments Directive. The appropriateness requirements under MiFID II require investment firms providing investment advice to assess a potential client's knowledge and experience in the investment field, to ascertain whether a particular service or product is appropriate for the client. There are exemptions from these requirements under the execution-only framework, subject to certain conditions being met. ESMA's new Guidelines are designed to enhance convergence across the EU on the application of these requirements.
ESMA published a consultation on the proposed Guidelines in January 2021. The final Guidelines are largely in the form consulted upon, although certain changes have been made, including:
The guidelines will now be translated into all official EU languages and published on ESMA's website. Within two months of publication on ESMA's website, national regulators must notify ESMA whether they comply or intend to comply with the Guidelines.
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