Compliance Briefing — August 2, 2022

Executive briefing: Delegated Regulation (EU) 2021/1253 amending MiFID II suitability rules applied on 2 August 2022. Investment firms must incorporate clients’ sustainability preferences into advisory and portfolio management suitability assessments and ensure product governance frameworks map sustainable characteristics accurately.

Key compliance checkpoints

Sustainability preference capture. Update suitability questionnaires to record whether clients want products aligned with the EU Taxonomy, SFDR Article 8/9, or PAI commitments.
Product governance. Maintain target market definitions that reference sustainability characteristics and ensure recommended products meet stated preferences.
Disclosure linkage. Tie MiFID suitability reports to SFDR and Taxonomy disclosures, evidencing how recommendations honour sustainability choices.

Operational priorities

Advisor training. Educate front-office teams on explaining sustainable investment options, data limitations, and fallback approaches if preferences cannot be met.
Systems updates. Configure CRM and portfolio management tools to store preference data, flag mismatches, and monitor post-sale alignment.
Data governance. Source reliable sustainability metrics from issuers and data vendors to validate product classifications.

Enablement moves

Establish governance forums between product, compliance, and sustainability teams to review inventory alignment regularly.
Deploy monitoring dashboards that track recommendations against captured preferences and escalate exceptions.
Synchronise MiFID and insurance-based investment product (IBIP) workflows to streamline multi-channel compliance.

Sources

Zeph Tech equips wealth managers with sustainability preference capture flows, product mapping, and surveillance analytics to satisfy MiFID II updates.