The European Securities and Markets Authority (ESMA) has begun consulting the financial industry on its proposal that adviser standards should be set by individual national authorities under MiFID II.
In its latest guidelines, the body suggested that advisers must acquire an “appropriate qualification” set by their relevant national body following the implementation of the Markets in Financial Instruments Directive II in 2016.
The authority also suggested that each national authority should determine a minimum period of “appropriate experience” for advisers, which can be differentiated depending on the qualification attained by staff and the service being provided.
It said that required standards of knowledge and competence should also be maintained on an on-going basis through “appropriate monitoring and evaluation”.
The consultation period for responses to the guidelines will close on 10 July this year and ESMA will consider the feedback through Q2 and Q3, with a view to publishing a final report in Q4.
“ESMA considers that the level and intensity of knowledge and competence expected for those providing advice should be of a higher standard than those that only give information on financial instruments, structured deposits and services,” it said. “This reflects the fact that investment advice is a high value service that requires an enhanced level of investor protection.
“ESMA considers that the introduction of guidelines on knowledge and competence sould secure commitment from all stakeholders and increase emphasis on providing evidence that firm’s staff have attained appropriate knowledge and competenece.”
According to the body, which is currently implementing MiFID II into legislation, any existing staff member with five years’ or more experience could, at a national authority’s discretion, be considered to possess the relevant knowledge by default.
MiFID II aims to increase financial transparency across Europe in the wake of the 2008 financial crisis.
