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Quick info

Overview

This page explains how the platform's risk model supports compliance with MiFID II suitability assessment requirements. It maps specific regulatory obligations to risk model functionality and provides guidance on using the risk model to meet your regulatory responsibilities.

Regulatory Framework: The risk model helps firms comply with suitability assessment obligations under:

• Article 25(2) of MiFID II – Core suitability requirements for investment advice and portfolio management
• Article 54 of MiFID II Delegated Regulation – Technical standards for conducting suitability assessments
• Article 55 of MiFID II Delegated Regulation – Updating and reviewing client information

Article 25(2): Suitability Assessment Requirements

What the Regulation Requires

When providing investment advice or portfolio management, firms must obtain necessary information about the client regarding:

1. Investment Objectives – Client's investment goals, including risk tolerance
2. Financial Situation – Client's financial circumstances, including ability to bear losses
3. Knowledge and Experience – Client's understanding of investments relevant to the specific product or service

Firms must recommend only investment services and financial instruments that are suitable for the client based on this information.

How the Risk Model Supports Compliance

Investment Objectives and Risk Tolerance The risk model systematically captures investment objectives through:

• Time horizon questions linked to specific investment goals
• Risk tolerance questions assessing willingness to accept volatility
• Scenario-based questions that test client understanding of risk/return tradeoffs