DISTRIBUTION OF ILLIQUID FINANCIAL PRODUCTS
On 2 March 2009 CONSOB issued Communication n. 9019104, concerning the obligations of correctness and transparency to be fulfilled by the intermediaries, falling within the measures implementing MIFID Directive III with regards to the Regulations for intermediaries. Said communication examines the distribution of illiquid products (bank bonds, insurance products with financial character, derivatives) to retail clients suggesting concrete actions with regards to the transparency of the pricing and deeper knowledge, to be transmitted to the clients, about the distributed illiquid products.
Specifically, with regards to the recommendations concerning transparency, intermediaries shall provide clients with information concerning the correct value and the implicit and explicit costs of the products, including the deferred costs. Furthermore, intermediaries shall inform clients about the characteristics of the product by providing comparisons with simple and known products in order to allow them to make an acquainted choice. At the other hand, intermediaries shall search detailed information about the client's preferences with specific regards to the investment horizon, in order to suggest adequate products. Due to the relevancy and the impact of the above measures, intermediaries are requested to implement all necessary steps and to update their company's procedures as soon as possible.
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