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French Asset Management Association (Association Française de la Gestion financière, AFG)
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Small (10 to 49 employees)
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AFG decided very early on to fully support the development of responsible investment in France.

French asset management companies are fully committed to this approach and are adapting their offering to the concerns of their institutional and private investors by proposing products that entail varying degrees and types of commitment – SRI funds, integration of ESG criteria, shareholder engagement, thematic investing and so on – and have in common respect for the values of sustainable development.

We would like to provide you with our comments on the European Commission’s draft legislative proposal to amend MiFID II and IDD.

We are supportive of the overarching principle to clarify the suitability assessment requirements and formally include client preferences on sustainability. In this regard we believe it is essential that those carrying out suitability assessments on investor needs are fully included in this debate. These can range from large wealth managers and discretionary managers to the vast number of individual advisors and insurance intermediaries who support European consumers in their investment choices.

We are concerned that the corresponding text in IDD is far more general and further increases the gap existing between the strict framework applying to advice and sale of financial products by MIFID firms and distribution of the same investment products by insurance intermediaries.

At least on this topic there should be an absolute level playing field. It is not a good signal in terms of governance of the regulation to deepen the opposition between the 2 regulations and even more so on the matter of ESG and sustainable investment. Therefore, we recommend to align the requirements in MIFID with those in IDD: namely the introduction of a client investor’s ESG preferences as a new criterion to be explicitly considered when performing an investment service.

There is in our view a timing error in the proposed amendments. Investment firms and asset managers have not yet a reliable experience of the consequence of the profound changes in the MIFID resulting from the recent modifications introduced this year.

We are grateful in advance for your attention to the concerns expressed in this response and we would welcome the opportunity to discuss these with you in further detail.

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