28 February 2012

ALFI response to ESMA’s consultations papers on MiFID suitability requirements and on compliance function requirements

ALFI would recommend taking into account the fact that investment firms can only rely on the information provided by their clients, and that it is those clients' responsibility to give true and reliable information, as well as to communicate any relevant changes in their personal situation.

Response on MiFID suitability requirements

ALFI welcomes ESMA’s initiative to consult the public and the financial industry on certain aspects of MiFID suitability requirements.

As a general comment, ALFI would recommend taking into account the fact that investment firms can only rely on the information provided by their clients and that it is those clients’ responsibility to give true and reliable information, as well as to communicate any relevant changes in their personal situation. Overall, ALFI thinks that current rules are adequate and that any new regulation in this regard should be of real value–added to the suitability process and not constitute a mere additional administrative burden.

Full response

Response on compliance function requirements

ALFI welcomes ESMA’s initiative to consult the public and the financial industry on certain aspects of the compliance function in order to enhance clarity and foster convergence in the implementation of the MiFID organisational requirements.

As a general comment, ALFI would like to stress that although the compliance function is in its view key to the sound organisation of investment firms, certain proposals in the consultation document do not take into account the need for proportionate application of the rules according to the size and nature of the business concerned. More specifically, ALFI would recommend that such proportionality be more explicitly envisaged as regards the monitoring, reporting and effectiveness aspects of the compliance function.

Full consultation paper

© ALFI - Association of the Luxembourg Fund Industry