Since October 2016, ESMA has published several Questions and Answers (“Q&As”) relating to Directive 2014/65/EU on markets in financial instruments (“MiFID II”) and Regulation (EU) No. 600/2014 on markets in financial instruments (“MiFIR”), relating to 6 different topics:
- ESMA/2016/1165: Q&A relating to the provision of CFDs and other speculative products to retail investors under MiFID;
- ESMA/2016/1444: Q&A on MiFID II and MiFIR investor protection topics;
- ESMA/2016/1673: Q&A on MiFID II and MiFIR commodity derivatives topics;
- ESMA/2016/1424: Q&A on MiFID II and MiFIR transparency topics;
- ESMA/2016/1583: Q&A on MiFID II and MiFIR market structures topics; and
- ESMA/2016/1680: Q&A on MiFIR data reporting.
The Q&A on MiFID II and MiFIR investor protection topics is one of the most extensive of these documents.
This Q&A, which was most recently updated in December 2016, covers topics relating to the following areas:
- Best execution obligation (article 27 MiFID II);
- Suitability and appropriateness (article 25(2) and 25(6) MiFID II);
- Recording of telephone conversations and electronic communications (16(7) MiFID II);
- Recordkeeping (article 16(6) and 16(7) MiFID II);
- Investment advice on an independent basis (article 24(4) and 24(7) MiFID II);
- Underwriting and placing;
- Inducements (research) (article 24 MiFID II);
- Post-sale reporting; and
- Information on costs and charges (article 24 MiFID II).
The Q&A clarifies various specific rules in these areas and explains the applicability of “Level 2” regulation (in particular the MiFID II Delegated Regulation of 25 April 2016 and MiFID II Delegated Directive of 7 April 2016 issued by the European Commission) to a wide range of topics, ranging from unrequested research “free of charge” to the encryption of records.