The 2020 CSA has shown that firms overall comply with key elements of the suitability requirements that were already regulated under MiFID I, such as the understanding of products and clients and their processes and procedures to ensure the suitability of investments. However, shortcomings and areas of improvement have emerged about some of the new requirements introduced by MiFID II, notably the requirement to consider the cost and complexity of equivalent products, the costs and benefits of switching investments and suitability reports.

This exercise was launched in February 2020 . Its purpose was for all NCAs to conduct coordinated supervisory activities to assess the application of MiFID II suitability rules across the EU. The CSA was also an opportunity to strengthen the ongoing exchange of supervisory knowledge and experience among NCAs.

Next steps

ESMA, based on the results of the CSA, will update, in 2021/2022, its guidelines on suitability to address, where needed, some areas where a lack of convergence has emerged or/and to further clarify some of the new MiFID II requirements. In this context, it will also be possible to complement the guidelines with relevant examples of good and poor practices emerged from the CSA. The review of the guidelines also aim to align the suitability guidelines to the guidelines on appropriateness and execution-only and to the revised MiFID II Delegated Regulation on the topic of sustainable finance.

Furthermore, based on the results of the CSA, NCAs will undertake follow-up actions on individual cases, where needed, to ensure that regulatory breaches as well as other shortcomings or weaknesses identified are remedied.

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