ESMA to launch Common Supervisory Action on MiFID II sustainability requirements

ESMA is planning to launch a CSA in 2024, in collaboration with NCAs, to assess how financial intermediaries are integrating sustainability into their suitability assessment and product governance procedures. This evaluation is in response to amendments made to the MiFID II Delegated Acts, which entered into application on 2 August 2022, introducing key sustainability requirements (eventid=11684).
The CSA will examine several aspects, including how firms collect information about their clients‘ sustainability preferences, the methods firms employ to categorize investment products with sustainability factors for suitability assessment, the procedures for ensuring that investments align with sustainability objectives, and the specification of sustainability-related goals for investment products in target market assessments.
The goal of this initiative is to promote the consistent application of EU rules and enhance investor protection in line with ESMA’s objectives. ESMA believes that sharing best practices among NCAs will contribute to this aim. This CSA follows ESMA’s recent update of guidelines on suitability and product governance, which entered into application on 3 October 2023 (eventid=20391 and eventid=17348). The CSA will be carried out by ESMA and NCAs in 2024.