MiFID II
: your sustainable preferences
New European rules on sustainable finance came into force on 2 August 2022 for providers of investment advisory services and discretionary portfolio management.
The aim is to move towards a more sustainable society, and as an investor, you can play an active part in this transition.
As a result of changes to the rules of the European MiFID II Directive, you can now voice your views on sustainability within your investments. By means of a new questionnaire, you are invited to express your sustainable investment preferences by answering a number of questions.
Suitability improved by your sustainability preferences
The European Union requires financial institutions offering investment services to take sustainability risks into account in their organisation, and to include the client's sustainability preferences in their suitability process*.
In addition to the conventional elements of financial capacity, risk tolerance, knowledge and experience, companies also need to gather information on clients' sustainability preferences. The aim is to ensure that the instruments recommended or used in discretionary portfolio management are adapted to sustainability preferences.
In addition to the conventional elements of financial capacity, risk tolerance, knowledge and experience, companies also need to gather information on clients' sustainability preferences. The aim is to ensure that the instruments recommended or used in discretionary portfolio management are adapted to sustainability preferences.
* For clients with an order reception, transmission and execution service, nothing changes.
How will it work in practice?
Depending on your situation (new client, existing client or new portfolio), we will invite you to complete the questionnaire on your sustainability preferences.
New clients will be invited to complete the questionnaire when opening a new investment portfolio. The bank will ask you to create a profile, based on a series of questions (investment profile) which are now supplemented by questions about your sustainability preferences.
For existing clients, your private banker or your usual contact will ask you to complete the sustainability questionnaire when your MiFID investment profile is being reviewed.
If you are already a client and would like to open a new portfolio we will also collect your sustainability preferences to ensure that the proposed investments are in line with your sustainable investment objectives. These objectives may differ from one account to another.
It is also stipulated that only "sustainable investments" can be used to match the investor's specific sustainability preferences.
To achieve this, 3 instrument typologies have been developed:
- Instruments aligned with the taxonomy
- Sustainable instruments according to SFDR
- Instruments that take PAI into account
Your sustainability preferences
Do you want to learn more about sustainable investing?
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RPR | RPM Brussels
RPR | RPM Brussels
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