ESMA consults on draft guidelines specifying criteria for the assessment of knowledge and competence in MiFID II 

The European Securities and Markets Authority launched today a consultation on draft guidelines specifying criteria for the assessment of knowledge and competence of natural persons in investment firms that provide investment advice or information about financial instruments, investment services or ancillary services to clients.

The consultation paper (CP) proposes that such criteria should be met by attaining an “appropriate qualification” and “appropriate experience” and sets out the areas of knowledge and competence that need to be assessed against, in order to provide investment advice or information to clients.

These areas include understanding of:

• the key characteristics, complexity, and total costs of relevant products or services;
• how the market functions, the market structure, and the impact of economic data;
• how to use relevant data sources and valuation principles; and
• the relevant regulatory requirements, and the firm’s internal procedures designed to ensure compliance with MiFID II.

The CP also proposes that national competent authorities or other appropriate bodies should determine the list of appropriate qualifications or criteria for the assessment of qualifications.

These guidelines are intended to enhance investor protection by setting out the standards required to be held by staff in investment firms that provide investment advice or information to clients, and requiring the review and assessment of how such staff meet these standards.

The consultation will be open until 10 July 2015. Thereafter, ESMA will consider the responses and expects to publish final guidelines in Q4 2015.

Source: ESMA

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