02/08/2022

I. Integrating sustainability preferences in the suitability assessment


As from 2 August 2022
, pursuant to Commission Delegated Regulation 2021/1253 of 21 April 2021 amending Delegated Regulation 2017/565, banks and investment firms that provide investment advice or portfolio management to professional and retail clients (“Concerned Entities”) are required to consider clients’ sustainability preferences in their suitability assessment.

In that context, the CSSF published two press releases on 1 and 2 August 2022 reminding Concerned Entities of this requirement.

The CSSF is aware that the European Securities and Markets Authority (“ESMA”) is finalising the update of its Guidelines on certain aspects of the MiFID II suitability requirements.

The CSSF notes, however, that even in the absence of the finalised guidelines, it expects Concerned Entities:

  • to monitor the developments of the regulatory framework and the publication of the Guidelines,
  • to collect and take into account all relevant information related to the sustainability preferences of new clients as from 2 August 2022 onwards,
  • to update existing client information at the latest at the next regular update of the client’s profile,
  • to continue to adapt their processes and governance.

 

II. Integrating sustainability factors in product governance requirements


The CSSF further notes that pursuant to Commission Delegated Directive (EU) 2021/1269 of 21 April 2021 amending Delegated Directive 2017/593, which will apply as of 22 November 2022, sustainability factors need to be integrated into product governance obligations.

The CSSF draws market players’ attention to the publication on 8 July 2022 of an ESMA Consultation Paper on the review of the Guidelines on MiFID II product governance requirements.

 

  • Read Commission Delegated Regulation (EU) 2021/1253 of 21 April 2021 amending Delegated Regulation (EU) 2017/565 as regards the integration of sustainability factors, risks and preferences into certain organisational requirements and operating conditions for investment firms here_
  • Read Commission Delegated Directive (EU) 2021/1269 of 21 April 2021 amending Delegated Regulation (EU) 2017/593 as regards the integration of sustainability factors into the product governance obligations here_
  • You can access the ESMA Consultation on the review of the Guidelines on certain aspects of the MiFID II suitability requirements here_
  • You can access the ESMA Consultation on the review of the Guidelines on MiFID II product governance requirements here_
  • Read CSSF press release 22/18 of 1 August 2022 here_
  • Read the CSSF press release of 2 August 2022 here_
  • Read our newsflash on integrating sustainability into the MiFID II framework here_
  • You can access our timeline on key ESG milestones in the banking and insurance sectors here_

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