France’s AMF checks how investment firms assess client knowledge

Maria Nikolova

The firms checked by the regulator have overall improved their practices of testing the knowledge of their clients about financial products.

One of the main topics of the MiFID II rules has been investor protection and the regulatory changes have involved changes to onboarding procedures at investment firms, as well as more detailed tests of the level of clients’ expertise with regard to a certain financial product. This is a rather pressing issue, if we take into account that the latest ESMA restrictions on CFD offering, for instance, simply do not apply to professional investors, and hence, the risk of clients being easily transferred to the “professional” category has been present.

Earlier today, France’s Financial Markets Authority (AMF) has published a summary of the findings stemming from five checks related to the knowledge and experience of clients of investment firms.

The checks, carried out early in 2018, have been done under a new AMF program called SPOT. The checks have uncovered both good and bad practices, but the regulator underlines that, overall, the practices related to checking clients’ knowledge of financial products have improved.

More precisely, the regulator has identified a number of good procedures. For instance, the firms are now asking their (potential) clients various questions, depending on the type of financial product offered to the client. Also, clients are offered a document setting forth in a clear manner the peculiarities and the risks associated with complex financial or risky products. Another good practice is to periodically revise the questionnaire.

There are bad practices that the AMF has uncovered too. For instance, some firms have asked questions that had no possible answer for “no knowledge”. Instead the options were low / medium / good knowledge. In addition, some firms still allow clients choose their profile by self-assessment.

Earlier this month, the French regulator warned of some issues related to the implementation of the new ESMA rules. AMF’s Chairman Robert Ophèle said chaos may emerge if ESMA stops renewing its measures restricting CFD offering to retail investors and prohibiting binary options. According to him, once ESMA does not renew the rules for CFDs and binary options, there will be a multitude of national regimes regarding the offering of these products. This will result in chaotic surveillance of products that are marketed online.

Read this next


The FX Algo Wheel, is it wheels up and ready to take flight?

by David Catterick, Sales Director, BidFX Australia

Retail FX

eToro users now can trade underlying Italian stocks

Israeli social trading and multi-asset brokerage company eToro has expanded its service offering and trading products by incorporating new markets, namely Italian stocks listed at underlying exchanges.

Digital Assets

BlackRock bets on crypto bank Silvergate despite drastic fall

BlackRock, the world’s largest asset manager, has increased its stake in Silvergate Bank, a crypto-friendly lender that counts major crypto exchanges like Coinbase and Kraken as clients.


A viewpoint from Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, on SEC regulation of the digital asset sector

The SEC’s latest episode comes across as more of a PR performance rather than an act of investor protection.

Digital Assets

Tether denies receiving any loans from Celsius, the opposite is true

World’s largest stablecoin issuer, Tether dismissed reports suggesting that it received a $2 billion loan from the bankrupt cryptocurrency lender Celsius.

Institutional FX

Cboe FX volume makes strong rebound in January

Cboe’s institutional spot FX platform today announced its trading volume for the month ending January 2023, which marks a mild rebound after a steep fall in December.

Uncategorized appoints Exness alumni Mohamad Ibrahim as CEO, the multi-regulated financial services provider, has appointed Mohamad Ibrahim as the group’s newest chief executive officer (CEO).


B2Broker Integrates Match-Trader Solution to Expands Its White Label Liquidity Offering

A global provider of technology and liquidity for the FX and cryptocurrency markets, B2Broker recently announced the extension of its white label liquidity offering by merging with Match-Trader.

Digital Assets

UK launches open consultation to regulate crypto exchanges, custody, and lending

The government’s proposed measures have been informed by recent market events – including the failure of FTX – which reinforce the case for effective regulation and sector engagement.