The European Securities and Markets Authority (ESMA) the EU’s financial markets regulator and supervisor, today published a supervisory briefing on understanding the definition of advice under MiFID II.
ESMA reviewed and updated the CESR Q&A on Understanding the Definition of Advice under MiFID, a document that is widely used by supervisors and firms, to align it with new business models and recent technological developments.
The Q&A document is issued in the form(at) of a supervisory briefing and intended for use by the National Competent Authorities (NCAs) in their supervisory activities.
The supervisory briefing, among other topics, covers:
The provision of personal recommendations and whether other forms of information could constitute investment advice;
Guidance on when recommendations will be viewed as based on a view of a person’s circumstances;
Perimeter issues around the definition of personal recommendation;
Issues around the form of communication, including use of social media posts.
The document is also intended to provide guidance to firms.