Intelligent MiFID Conduct Rules Compliance for Optimal Client Relationship Excellence
MiFID II conduct of business rules establish the investor protection framework for investment firms across the EU.
MiFID II conduct of business rules cover the full chain of client-facing obligations: from client categorisation through suitability assessment and appropriateness testing to cost transparency, inducements rules and product governance. ESMA guidelines and national supervisors provide further detail. ADVISORI guides firms through structured implementation — focusing on auditability, process efficiency and regulatory sustainability.
We offer a comprehensive portfolio of AI-supported solutions for the strategic implementation of all MiFID Conduct of Business Rules requirements. Our approach combines deep conduct rules expertise with effective technology solutions for sustainable compliance excellence and client relationship optimization.
6 service modules
Bookable individually or as an end-to-end programme.
We design and implement the full suitability assessment and appropriateness test process — from data collection through assessment logic to the suitability report. The focus is on traceability and examination readiness.
Building ex-ante and ex-post cost disclosure processes in accordance with MiFID II Delegated Regulation requirements. We ensure correct cost aggregation and develop auditable processes for full disclosure of all costs and charges.
We establish product governance processes: from manufacturer target market definition through distribution strategy to ongoing product monitoring. Including alignment between manufacturers and distributors.
Advisory on implementing the inducements ban and its exemptions. We review existing remuneration models, identify risks and develop solutions for the quality-enhancing use of inducements.
Implementation of record-keeping obligations including telephone recording (taping) requirements for client orders. We design documentation processes that meet supervisory requirements while minimising operational overhead.
Preparation for on-site inspections focusing on conduct of business rules. We review your implementation against current ESMA guidelines, identify weaknesses and guide you through the examination process.
5 phases
ADVISORI guides investment firms from gap analysis through process design to examination preparation — with the goal of implementing conduct of business rules not only in a regulatory-compliant manner but also operationally efficient.
Your contact
Melanie Düring
Head of Risk Management
The strategic optimization of MiFID Conduct of Business Rules is fundamental for trust and integrity in modern financial services. Our AI-supported conduct rules solutions enable institutions not only to achieve regulatory compliance but also to develop strategic competitive advantages through intelligent client relationship optimization and automated investment advice strategies. By combining deep conduct of business expertise with advanced AI technologies, we create sustainable client relationship advantages while protecting sensitive customer data and ensuring optimal client protection.
National supervisors regularly examine compliance with conduct of business rules through on-site inspections. Deficiencies in suitability assessments or cost transparency rank among the most frequent findings. Comprehensive documentation and clear process design are essential.
7 QUESTIONS, BRIEFLY ANSWERED
MiFID II conduct of business rules establish the investor protection framework for investment firms. They cover the general obligation to act honestly, fairly and professionally, client information duties, the suitability assessment for investment advice and portfolio management, the appropriateness test for non-advised services, cost transparency requirements, product governance obligations and the inducements regime.
The suitability assessment applies to investment advice and portfolio management. The firm must collect information on the client's knowledge, experience, financial situation and investment objectives to ensure the recommendation is suitable. The appropriateness test applies to non-advised execution services and only checks whether the client can understand the product's risks. If no information is provided, a warning must be issued.
Investment firms must provide ex-ante cost information before the transaction and ex-post cost information annually. The cost disclosure must present all costs and charges in aggregate — both as a total amount and as a percentage. This includes service costs, product costs and any inducements. Supervisors require a traceable calculation with clearly defined cost components.
Product governance under MiFID II requires manufacturers of financial instruments to define a target market, set a distribution strategy and conduct ongoing monitoring. Distributors must verify that a product is appropriate for the identified target market. Target market determination covers client type, knowledge, financial loss capacity, risk tolerance and client needs.
Under MiFID II, inducements are generally prohibited for independent advice and portfolio management and must be passed on to the client. For non-independent advice, inducements are only permissible if they enhance the quality of the service and are disclosed to the client. Supervisors set high standards for demonstrating the quality enhancement.
Investment firms must record all services and transactions. Telephone client orders must be recorded (taping). The retention period is at least five years. Documentation must be designed so that the supervisor can verify compliance with all obligations.
In on-site inspections of conduct of business rules, supervisors typically examine suitability assessment implementation, correctness of cost information, inducements regime compliance, product governance processes and record-keeping obligations. Common findings include incomplete suitability reports, incorrect cost aggregation and insufficient documentation of quality enhancement for inducements.
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