22 December 2015

ESMA publishes MiFID II guidelines on cross-selling practices

The guidelines include principles on:

•    improving disclosures when different products are cross-sold with one another;
•    requiring firms to provide investors with all relevant information in a timely and clear manner; 
•    addressing conflicts of interest arising from remuneration models; and
•    improving client understanding on whether purchasing the individual products offered in a package is possible.

 The European Supervisory Authorities initially intended to issue joint guidelines covering all cross-selling practices taking place in the banking, insurance and securities sectors given that cross-selling is often cross-sectoral, and had consulted the stakeholders previously on this basis.

However, in light of legal concerns, the ESAs decided not to issue joint guidelines on cross-selling practices but agreed that ESMA should issue ESMA-only guidelines under MiFID II in order to meet its 3 January 2016 deadline.

While ESMA’s guidelines take into account the results of the ESAs’ joint consultation, the final report focuses on the feedback regarding cross-selling practices under MiFID II. Further, the guidelines are addressed to national regulators supervising the firms which provide MiFID services, when they engage in cross-selling practices.

The ESAs intend to inform the European Commission about the issues encountered and raise the possibility of legislative change to provide a foundation for future joint guidelines.

The guidelines apply from 3 January 2017.

Full guidelines

© ESMA