ESMA promotes proportionate supervision of MiFID II sustainability requirements

The statement highlights key themes emerging from the supervisory exercise and sets out high-level interim supervisory expectations, notably in relation to:

• the collection and treatment of clients' sustainability preferences;
• the categorisation and matching of products to those preferences;
• the application of the portfolio approach; and
• the target market assessment of products.

ESMA reaffirms the importance of sustainability and encourages firms to continue implementing the MiFID II sustainability requirements, recognising that the CSA has been conducted at a time when the sustainable finance framework is undergoing significant revision.

In view of these developments, and reflecting ESMA's strategic priority of promoting simplification and reducing undue burden, ESMA invites national competent authorities to adopt a proportionate supervisory approach. This includes fostering dialogue with firms during the transition period, rather than prioritising enforcement actions, without prejudice to cases involving clear breaches or mis-selling.

Next steps

ESMA will consider the results of this work for any future updates of the MiFID II Delegated Acts on sustainability and the related ESMA Guidelines, with the aim to simplify the framework and support more consistent and effective application.

Further information:

Iris Hude

Communications Officer
[email protected]