23/12/2015
ESMA issues MiFID II guidelines on cross-selling practices
The European Securities and Markets Authority (ESMA) has published its Guidelines on Cross-Selling Practices under MiFID II to ensure investors are treated fairly when an investment firm offers two or more financial products or services as part of a package. The guidelines include principles on: improving disclosures when different products are cross-sold with one another; requiring firms to provide investors with all relevant information in a timely and clear manner; addressing conflicts of interest arising from remuneration models; and improving client understanding on whether purchasing the individual products offered in a package is possible. The European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA - initially intended to issue joint guidelines covering all cross-selling practices taking place in the banking, insurance and securities sectors given that cross-selling is often cross-sectoral, and had consulted the stakeholders previously on this basis. However, in light of legal concerns, the ESAs decided not to issue joint guidelines on crossselling practices but agreed that ESMA should issue ESMA-only guidelines under MiFID II in order to meet its 3 January 2016 deadline.While ESMA’s guidelines take into account the results of the ESAs’ joint consultation, the final report focuses on the feedback regarding cross-selling practices under MIFID II. Further, the guidelines are addressed to national regulators supervising the firms which provide MiFID services, when they engage in cross-selling practices. The ESAs intend to inform the European Commission about the issues encountered and raise the possibility of legislative change to provide a foundation for future joint guidelines. The guidelines will apply from 3 January 2017.
