ESMA updates its guidance on the definition of advice in a supervisory briefing

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.

Next steps

ESMA and NCAs will continue monitoring the application of the MiFID II requirements and to make sure that investment services continue to be provided in the best interest of the client.

Sarah Edwards

Senior Communications Officer