On May 25, the European Securities and Markets Authority (ESMA) updated its questions and answers on the revised Markets in Financial Instruments Directive (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) investor protection and intermediaries topics, with nine new or updated Q&As.
While the clarifications impact investment firms more widely, ESMA expressly contemplates providers of contracts for difference in the Q&As as an example of an “other liquidity provider” that will need to comply with best execution requirements under the relevant MiFID II regulatory technical standard, RTS 27.
In addition, the updated Q&As clarify the conditions under which a firm may treat, to a certain extent, a private individual investor as a professional client. Crucially, firms must not implement any practice “that aims at incentivizing, inducing or pressuring a private individual investor to request to be treated as a professional client.”
The updated Q&As from ESMA are available here.
ESMA’s press release announcing the updated Q&As is available here.