Relevant to: Regulated Entities 1
Circular C579 (“the Circular”) dated 06/06/2023 informs Regulated Entities on ESMA Guidelines on certain aspects of the MIFID II suitability requirements.
Through Circular C579, CySEC wishes to inform Regulated Entities that the European Securities and Markets Authority (ESMA) published, on April 4, 2023, the Guidelines on certain aspects of the MiFID II suitability requirements (the ‘Guidelines’), translated in all official languages of the EU.
The key takeaways from CySEC’s C579 circular can be found below:
- The Guidelines apply in relation to Article 25(2) of MiFID II and Articles 54 and 55 of MiFID II Delegated Regulation and apply to the provision of the investment services listed in Section A of Annex I of MiFID II, that is investment advice and portfolio management.
- The Guidelines principally address situations where services are provided to retail clients and the purpose of the Guidelines is to clarify the application of certain aspects of the MiFID II suitability requirements in order to ensure the common, uniform and consistent application of Article 25(2) of MiFID II and of Articles 54 and 55 of the MiFID II Delegated Regulation.
- The Guidelines apply as from October 5, 2023. The previous ESMA guidelines issued under MiFID II (ESMA35-43-1163) as well as the CySEC’s circular C290 (Guidelines on certain aspects of the MiFID II suitability requirements) will cease to apply on the same date.
- CySEC further informs that it has adopted the Guidelines by incorporating them into its supervisory practices and regulatory approach and urges the Regulated Entities to carefully study the Guidelines and ensure that they fully comply with them.
Should you need more information or assistance with implementation of the Guidelines, you can email us at firstname.lastname@example.org or call us at 25-508201.
- Cyprus Investment Firms (‘CIFs’);
- UCITS Management Companies (‘UCITS MC’) as defined in Article 2(1)(b) of UCITS Directive (Directive 2009/65/EC), when providing the investment services of individual portfolio management or non-core services [within the meaning of Article 6(3)(a) and (b)(i) of UCITS Directive; and
- Alternative Investment Fund Managers (‘AIFMs’) as defined in Article 5(1)(a) of the AIFMD (Directive 2011/61/EU), when providing the investment services of individual portfolio management or non-core services [within the meaning of Article 6(4)(a) and (b)(i) of the AIFMD].