EBF response to ESMA consultation on the review of MIFID II suitability guidelines

27 April 2022

...we would like to stress that the new regulation gives rise to a number of inconsistencies, concerns, and doubts which we believe will hinder its implementation.

While the EBF welcomes the ultimate objective of the European legislators and supervisors of promoting sustainable development, as a general remark, we would like to stress that the new regulation gives rise to a number of inconsistencies, concerns, and doubts which we believe will hinder its implementation.

• On timing: Misalignment of the application timelines of SFDR and MIFIR rules on integrating sustainability will create great legal uncertainty for investment firms and a huge confusion for their clients. We therefore fully support the European joint industry proposal to postpone the implementation of the MiFID II delegated act until 1 July 2023. We believe ESMA should allow for a sufficient broad implementation period following the publication of the final guidelines.
• Regarding the scope, we don’t support a “one-size fits all” approach as proposed which does not take into account the different nature and characteristics of certain financial instruments, especially for instruments that are not under the scope of SFDR and Taxonomy Regulations.
• Need for greater flexibility: we believe that ESMA’s suggested approach is excessively complex.
• Data availability: the new rules on sustainability preferences will have a big impact not only on investment firms subject to MiFID but also on producers manufacturers of financial instruments (e.g. companies and asset managers) that will need to provide a large amount of data that is needed in order for investment firms to fulfill their requirements.

EBF

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