Knowledge Base
Monitor the evolution of clients and products over time
What is the recommended frequency for updating data on clients' financial situations, according to recommended practice?
The text indicates that recommended practice provides for annual or biennial updating of data on financial situations and knowledge. This frequency may be increased for clients with an aggressive risk profile, but the base frequency is annual or biennial.
What is the minimum retention period for records under Articles 72 to 75 of the MiFID II Delegated Regulation?
The minimum retention period is set at five years by Articles 72 to 75 of the MiFID II Delegated Regulation. This period ensures the availability of documents for audits and regulatory reviews.
What events justify an immediate update of client information under the duty of vigilance?
According to the text, triggering events for an immediate update include a change in family circumstances (marriage, divorce, birth), a change in professional circumstances (retirement, job loss), receipt of a significant inheritance or gift, repayment of a major loan, or any substantial change in wealth. These elements are critical for keeping client information up to date and compliant with regulatory requirements.
What documents must be retained under Articles 72 to 75 of the MiFID II Delegated Regulation?
Documents to be retained include all versions of client questionnaires, suitability reports, periodic assessments, client correspondence, profile changes with their justifications, recommendations issued (even without a transaction), and alerts sent to the client. This retention is necessary to ensure traceability and compliance.
True or False: Product monitoring does not require a structured internal organisation.
The text indicates that product monitoring requires a structured internal organisation built around dedicated committees and alert mechanisms. This structure is essential for effectively monitoring products in the portfolio.
True or False: Articles 72 to 75 of the MiFID II Delegated Regulation require a minimum record retention period of three years.
The text specifies that Articles 72 to 75 of the MiFID II Delegated Regulation require a minimum record retention period of five years. This duration is crucial for ensuring traceability and compliance of client monitoring processes.
Indicators for measuring the risk level of a portfolio instrument:
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The SRI (Synthetic Risk Indicator) or SRRI (Synthetic Risk and Reward Indicator) are used to measure the risk level of an instrument. These indicators are essential for assessing the suitability of the product to the client's profile.
Categorize items by dragging them to the appropriate zones
Items to categorize:
Client monitoring
Product monitoring
Changes in family and professional circumstances relate directly to the client, while issuer rating changes and trading suspensions relate to products. This distinction is essential for effectively organising monitoring.