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ESMA Publishes Updated Supervisory Briefing on MiFID II Suitability Rules; ESMA Publishes Standards and Guidance for Securitization Repositories Under the Securitization Regulation

ESMA Publishes Updated Supervisory Briefing on MiFID II Suitability Rules

On November 13, the European Securities and Markets Authority (ESMA) published an updated version of its supervisory briefing on the suitability requirements of the revised Markets in Financial Instruments Directive (MiFID II).

This briefing introduces European supervisors to MiFID II suitability rules, which require investment firms providing investment advice or portfolio management services to provide suitable personal recommendations to their clients or make suitable investment decisions on behalf of their clients. ESMA states that the briefing also is a useful starting point when deciding on areas of supervisory focus. The briefing summarizes the key elements of the rules and explains the associated objectives, outcomes and indicative questions that supervisors could ask a firm when assessing their approach applying MiFID II rules.

This briefing covers topics such as determining situations where the suitability assessment is required, providing information to clients about the purpose of the suitability assessment, obtaining information from clients and suitability reports.

The briefing takes into account ESMA’s guidelines on certain aspects of the MiFID II suitability requirements, which were published in May 2018 (for further information, please see here).

The guidelines go into effect on March 7, 2019. As of this date, ESMA’s previous 2012 supervisory briefing relating to suitability will be retired.

The briefing is available here.

ESMA Publishes Standards and Guidance for Securitization Repositories Under the Securitization Regulation

On November 13, the European Securities and Markets Authority (ESMA) published a number of documents relating to the implementation of the EU Securitization Regulation, supporting the new European framework for securitizations:

  • a final report containing draft regulatory and implementing technical standards (RTS and ITS) on securitization repository (SR) requirements, operational standards and access conditions under the Securitization Regulation. The RTS and ITS concern the information and templates to be provided as part of an application by a firm to register as an SR with ESMA;

  • a final report containing technical advice to the European Commission on fees for SRs under the Securitization Regulation;

  • guidance on ESMA’s arrangements for being notified of a securitization’s simple, transparent and standardized (STS) status consisting of a set of reporting instructions and an interim STS notification template, pending the development by ESMA of its STS Register in the coming months; and

  • a statement aiming to provide additional information to market participants on ESMA’s responsibilities under the Securitization Regulation.

ESMA has submitted the RTS, ITS and technical advice to the European Commission for endorsement.

A press release, with links to each of the documents, is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume VIII, Number 320


About this Author

John Ahern, Financial Attorney, London, Katten Law Firm

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...