Wealth Managers in Spotlight for Adherence to New Sustainable Suitability Rules

Get ready for the upcoming Common Supervisory Action from ESMA

On October 3, the European Securities and Markets Authority (ESMA) announced an enhanced focus on regulating Green MiFID implementation for wealth managers. Specifically, in 2024, ESMA will coordinate a Common Supervisory Action (CSA) with member states on the integration of sustainability preferences in wealth management firms’ suitability assessment.?

According to some studies, European wealth managers currently fall short in this regard, and this announcement stands to change that. The CSA aims to evaluate their adherence since the 2022 application of Green MiFID, focusing on a range of aspects, including how wealth managers specify the sustainability-related characteristics of the investment products they cover and how these are matched to client preferences. To help wealth managers prepare for this supervisory action Clarity AI has created a step-by-step guide to implementing Green MiFID.

The checklist includes steps for:

1. The initial operational setup:
2. Client outreach and engagement
3. Required periodic actions
4. Suggested periodic actions

There are 15 boxes you should be checking, how well-prepared are you?