MiFID Connect Issues Guidance on Suitability Checks
Guidelines for financial firms on meeting the ‘suitability and appropriateness’ provisions of a forthcoming EU Directive have received recognition from the City of London’s regulator. The guidelines, covering investor protections under the forthcoming Markets in Financial Instruments Directive (MiFID), have been confirmed by the Financial Services Authority (FSA). This means that the FSA will take into account a firm’s use of the guidelines when exercising its regulatory functions. The guidelines come from MiFID Connect, a joint project between 11 City trade associations to ease the transition from the current FSA rulebook to the implementation of the new EU-wide requirements. MiFID Connect will make the guidelines available to firms, who are working to comply with the new Directive, which comes into force on 1 November this year. The guidelines set out points firms might consider in assessing whether their advice-based investment services are suitable for their customers, and whether other services they provide may be appropriate for the client under new requirements introduced by MiFID.