CESR publishes reports on inducements and investment advice
27-04-2010
The report on Inducements highlights some of the observed industry practices (based on a questionnaire CESR members distributed to investment firms) on the MiFID inducements rules and provides investment firms with an understanding of how CESR views such practices. Throughout this report CESR has indicated what types of firm behaviour European securities regulators encourage (good practices) and discourage (poor practices). This is expected to provide firms with a benchmark against industry compliance with the MiFID inducements rules, with the additional comfort of knowing whether European securities regulators encourage or discourage particular instances of firm behaviour.
The report on the definition of advice under MiFID reflects CESRs statement of its policy following its consultation paper. In parallel to this Q&A, CESR also publishes its Feedback Statement (Ref. CESR/10-294) responding to comments it received in response to the CP and would recommend that these documents be read in conjunction.
The main questions for consideration, when determining whether a particular service amounts to investment advice, are laid out in "Diagram: the five key tests for investment advice? in the Introduction (see page 6). This diagram illustrates the five key tests that are set out in MiFID, with issues to consider in relation to each test.