Retail Investment Strategy

The European Commission published on 26 September a questionnaire on new provisions that it is considering as part of its retail investment strategy, with a view to enhancing the appropriateness and  suitability regimes. An open hearing was held on the draft on 28 September. AMAFI took part and stressed the need to maintain two separate regimes, since not all clients want to be advised on their investments.

After telling the Commission that its questions could not be answered in such a short timeframe, France’s professional associations are currently working on a shared position paper that they will shortly submit to the Commission. AMAFI, along with Germany’s derivatives association DDV and the French Treasury, held a meeting on 24 October to discuss the two associations’ shared priorities for the retail investment strategy (AMAFI / 22-78). Among the topics broached were alternatives to a potential ban on inducements, with a particular focus on the value for money of marketed financial instruments and improved transparency and delivery procedures for investment services targeting retail customers.

Product governance

AMAFI submitted numerous observations (AMAFI / 22-69) to the consultation launched in early July by ESMA on updating its guidance on product governance requirements to reflect the integration of ESG criteria in MiFID II. The association called for flexibility in the methodologies that could be used to define sustainability criteria for financial instruments, including with regard to the types of ESG data used.
This flexibility is needed throughout the period during which the data disclosable under Europe’s new sustainable finance legislation (particularly CSRD) will be unavailable because the legislation will not yet have come into effect.

Impact of inflation on MiFID II implementation

ESMA released a statement on 27 September concerning the impact of inflation on the provision of investment services. It reminded firms to consider inflation and inflationary risks when providing  investment services to retail customers and to pay particular attention to the provision of information and to suitability and product governance requirements. AMAFI is working with the members of its Compliance Committees to draft an interpretative note clarifying some of the operational impacts of ESMA’s statement.