Amendments to FIN-FSA regulations and guidelines 7/2018 concerning the integration of sustainability factors into product governance obligations and to implement new ESMA Guidelines on appropriateness requirements
The following amendments have been made to FIN-FSA regulations and guidelines 7/2018 on the organisation of activities and code of conduct of investment services:
New ESMA Guidelines on appropriateness requirements
The present amendments implement nationally the new Guidelines of the European Securities and Markets Authority (ESMA) “Guidelines on certain aspects of the MiFID II appropriateness and execution-only requirements” (ESMA35-43-3006).
The purpose of the Guidelines is to clarify the application of certain aspects of requirements concerning the MiFID II appropriateness assessment and the execution and transmission of client orders at the client’s initiative (“execution-only” service) and to ensure the common, uniform, and consistent application of relevant regulation.
The amendments to the regulations and guidelines will enter into force on 13 October 2022. The FIN-FSA recommends that entities falling within the scope of application of the Guidelines comply with the ESMA Guidelines.
Sustainability factors into product governance obligations
Based on the FIN-FSA’s regulatory powers, the present amendments to the regulations and guidelines implement nationally Commission Delegated Directive (EU) 2021/1269 amending Delegated Directive (EU) 2017/593 as regards the integration of sustainability factors into the product governance obligations.
Henceforth, the manufacturers and distributors of financial instruments must determine sustainability factors for financial instruments in their product governance processes. In determining a suitable client target group / client type for a financial instrument, they must also consider sustainability-related objectives as part of the client target group's objectives.
In accordance with the EU Disclosure Regulation (2019/2088), sustainability factors mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
The amendments to the regulations and guidelines are applicable as of 22 November 2022.
For more information, please contact
Riitta Seppä, Senior Policy Advisor, telephone +358 9 183 5027 or riitta.seppa(at)fiva.fi