RegSol Blog

Central Bank Dear CEO letter – MiFID Structured Retail Product Review

April 2022

On 22nd April 2022, the Central Bank of Ireland (the “CBI”) issued a “Dear CEO” letter which outlined its findings of a review identifying issues in the marketing of complex investment products - Structured Retail Products (SRPs) - manufactured and distributed by MiFID investment firms.

The letter comes on foot of the CBI’s Consumer Protection Outlook Report 2022 in which it highlighted a number of risks for consumers including ineffective disclosures on investment products and what it expects regulated firms to do to mitigate those risks.

Due to the current low deposit interest rate environment, retail clients seeking higher returns on their investments are turning to increasingly complex structured products, with intricate features and characteristics that oftentimes they may not fully understand the product or how the return is generated and may misinterpret the level of capital protection and risk associated with their investment.

The subsequent “Dear CEO” letter requires regulated firms to take action to identify a sufficiently granular target market for SRPs and to make improvements in the quality and transparency of disclosures to retail clients of the risks investing in such products.

The letter refers to a number of poor practices and weaknesses identified in firms’ SRP arrangements and controls including examples where firms have failed to:

  1. Identify a sufficiently granular target market.
  2. Adequately consider the use of highly complex features in SRPs being manufactured and distributed to retail clients, which may be difficult for these clients to understand.
  3. Present fair and balanced past performance (back-testing) information, supported by appropriate context and narrative.
  4. Display capital at risk warnings in prominent positions for products where the client’s capital is at risk.
  5. Ensure consistent levels of clarity and comprehensiveness in disclosures.
  6. Disclose adequately the risk and potential impact of restructuring to clients prior to sale.

For relevant MiFID investment firms, due consideration should be given to the contents of the letter and ensure they are continually evaluating the effectiveness of their arrangements and controls in the manufacture and distribution of SRPs to ensure that they are meeting the highest standards of investor protection, which the CBI will have due regard to as part of future supervisory engagements.

You can access the Consumer Protection Outlook Report 2022, press release and Dear CEO letter by clicking the below links:

Consumer Protection Outlook Report 2022 (

Central Bank reviews identify issues in marketing of complex investment products

Dear CEO letter - MiFID Structured Retail Product Review (