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News 31/08/23

ESMA updates briefing on definition of investment advice

The European Securities and Markets Authority (ESMA) has published a supervisory briefing on the definition of investment advice under MiFID II. This update of an earlier briefing aligns more closely with new types of online (and other) services.

The publication includes a decision tree with key tests for determining whether or not investment advice has been provided, as well as practical cases in which use is made of the decision tree.

The ESMA supervisory briefing on the definition of advice under MiFID II is intended for supervisory authorities, but can also be used by investment firms and influencers to assess the services they provide. This update introduces four practical cases focused on investment firms and influencers. The cases relate to online service models that are becoming increasingly common and that may involve a certain degree of doubt as to whether or not advice is being provided.

Two practical cases concern an investment firm offering a limited product range and giving clients the possibility to invest, with varying levels of assistance from the firm, in five well-diversified UCITS funds. The publication also includes a practical case involving a finfluencer who posts daily videos on social media about investing, amongst other topics, and who every week holds a live Q&A event for his followers.

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