MiFID rules related to sustainability: application of the requirements relating to product governance

Application of Grand-ducal Regulation of 27 July 2022 amending Grand-ducal Regulation of 30 May 2018 on the protection of financial instruments and funds belonging to clients, product governance obligations and the rules applicable to the provision or reception of fees, commissions or any monetary or non-monetary benefits for the purposes of transposing Commission Delegated Directive 2021/1269 of 21 April 2021 amending Delegated Directive (EU) 2017/593 as regards the integration of sustainability factors into the product governance obligations (the Grand-ducal Regulation).

The CSSF would like to remind supervised entities that from 22 November 2022 onwards, the date of application of the Grand-ducal Regulation, entities are required to take into account sustainability factors when specifying the target markets for the financial instruments and structured deposits they manufacture and/or distribute.

The European Securities and Markets Authority (ESMA) is currently finalising the update of its “Guidelines on MiFID II product governance requirements” in order to take into consideration these amendments. These guidelines will provide firms with further guidance on the application of the new requirements.

As a reminder, according to Commission Delegated Regulation 2021/1253, since 2 August 2022, providers of investment advisory and discretionary portfolio management services are required to obtain specific information on their clients’ preferences regarding sustainability and meet such preferences, while also meeting their other investment objectives and taking into account their financial situation and knowledge and experience.