AMF applies ESMA guidelines on suitability requirements for financial services and products provided to clients

12 October 2012

The Autorité des Marchés Financiers incorporated the ESMA guidelines on the MiFID suitability requirements for financial services and products provided to clients (ESMA/2012/3871) in its position 2012-13. Provisions will apply as of December 22, 2012.

The European Securities and Markets Authority (ESMA) enacted nine guidelines on the basis of the MiFID Directive (2004/39/CE) and its Implementing Directive (2006/73/CE). They aim at clarifying the implementation of the provisions incumbent on investment service providers as regards the suitability assessment of the financial services or instruments they provide to each of their clients (whether professional or non-professional). When they offer investment portfolio management or investment advice services, investment service providers shall establish appropriate procedures in order to assess the information related to the investment objectives, financial situation and experience of their clients, in order to provide them with suitable services or instruments.

These guidelines, which are reproduced in the AMF position, provide details on the following:

• information to clients on the purpose of the suitability assessment and on its practical application (in particular in terms of the identification risks linked to investment);
• the resources to be deployed (appropriate procedures, staff with an adequate level of knowledge and expertise, adapted decision support tools);
• the information to be collected from clients (proportionality between the information to be collected from the client and the kind of services and products provided);
• taking reasonable steps to assess the reliability of client information and update client information;
• the special cases of legal entities or groups;
• record-keeping.

Full position

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