Consultation Paper on draft guidelines on complex debt instruments and structured deposits
Article 25(10) of Directive 2014/65/EU (MiFID II) requires ESMA to develop guidelines for the assessment of the complexity of:
(i) Bonds, other forms of securitised debt and money market instruments incorporating a structure which makes it difficult for the client to understand the risk involved; and
(ii) Structured deposits incorporating a structure which makes it difficult for the client to understand the risk of return or the cost of exiting the product before term.
ESMA has developed draft guidelines on complex debt instruments and structured deposits. The Consultation Paper also covers the concept of embedded derivative for debt instruments. These guidelines are intended to enhance investor protection and are important for the correct classification of MiFID debt instruments (bonds, securitised debt and money market instruments) and structured deposits as either 'complex' or 'non-complex' for the purposes of Article 24(4) of MiFID II.
The consultation document on complex debt instruments and structured deposits can be accessed from the following link:
ESMA invites comments on all matters in this paper and in particular on the specific questions summarised in Annex 1. All contributions should use the response form, which can be accessed on the following link: http://www.esma.europa.eu/consultation/77824/response. All contributions should be submitted online.
The consultation period will be open until 15 June 2015. ESMA expects to publish final guidelines in Q4 2015.
Consultation Paper on draft guidelines for the assessment of knowledge and competence
Article 25(9) of MiFID II requires ESMA to develop guidelines specifying criteria for the assessment of knowledge and competence of the investment firm's personnel giving investment advice or information about financial instruments, investment services or ancillary services to clients on behalf of the investment firm to fulfil their obligations under Article 24 and Article 25.
ESMA has developed draft guidelines on certain aspects of MiFID II for the assessment of knowledge and competence. ESMA considers that these guidelines will establish a knowledge and competence framework that will set principles for individuals in MiFID firms that give investment advice or information about financial instruments, investment services or ancillary services to clients on behalf of the investment firm.
The consultation document can be accessed from the following link:
The consultation will be open until 10 July 2015. Thereafter, ESMA will consider the responses and expects to publish final guidelines in Q4 2015.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
