ESMA Publishes Final Guidelines On Appropriateness And Execution-only Requirements Under MiFID II

QuickTake

On 3 January 2022 the European Securities and Markets Authority (ESMA) published its Final Report on "Guidelines on certain aspects of the MiFID II appropriateness and execution-only requirements" (the 2022 Guidelines).¹ The purpose of the 2022 Guidelines is to enhance clarity and to foster convergence of the appropriateness and execution-only requirements in the EU's MiFIR/MiFID II legislative and regulatory regime as well as how national competent authorities (NCAs) supervise financial services firms' compliance.

Under the EU's MiFIR/MiFID II rules firms providing 'non-advised services' are required to request information on the knowledge and experience of clients or potential clients to assess whether the investment service or product envisaged is appropriate, and to issue a warning in case the investment service or product is deemed inappropriate. The execution-only framework allows for an exemption to this assessment in certain