Summary of CySEC's Circular C386
Memo #33-2020
CySEC Circular No: C386
Date: 11/05/2020
Subject: COVID-19: ESMA’s Public Statement regarding the conduct of business obligations under MiFID II
Purpose: To draw the attention to the CIFs to the ESMA's Public Statement issued very recently in relation to the conduct of business obligations under MiFID II.
In Summary:
CySEC has issued the Circular C386 on 11/05/2020 in order to draw the attention of the Cyprus Investment Firms ('CIFs') to the Public Statement issued on the 6th of May 2020 by the European Securities and Markets Authority ('ESMA') in relation to the conduct of business obligations under MiFID II.
The ESMA's Public Statement refers to the risks for retail investors when trading under highly uncertain market circumstances due to the COVID-19 pandemic.
The ESMA's Public Statement reminds investment firms of the key conduct of business obligations under MiFID when providing services to retail investors.
In accordance with the ESMA’s Public Statement, ESMA believes that in the current uncertain market circumstances due to the COVID-19 pandemic, firms have even greater duties when providing investment or ancillary services to investors, especially when these investors are new to the market, or have limited investment knowledge or experience.
ESMA reminds firms of their obligation to act in accordance with the best interests of their clients, and points to the most relevant conduct of business obligations under MiFID II, namely product governance, information disclosure, suitability and appropriateness.
This Circular C386 refers with more details about the Product Governance, Information Disclosure and Suitability and Appropriateness Assessment obligations and that CIFs shall ensure that they fully comply with these obligations.
CySEC requests CIFs to review their policies and arrangements in place and ensure that they fully comply with their conduct of business obligations and related organizational requirements under MiFID II.
The ESMA’s public statement can be found on the following link: https://www.esma.europa.eu/sites/default/files/library/esma35-43-2391_esma_statement_on_covid-19_retail_investor_activity.pdf
Read the CySEC Circular C386
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