CESR clarifies that a service will only be considered as investment advice if it meets all five of the tests set out in CESR's Q&A. CESR also accepts that in practice firms can often place greater reliance on the ability of professional clients to understand whether they are receiving advice.
CESR has sought in this Feedback Statement to respond to comments made and points raised in response to its Consultation Paper “Understanding the definition of advice under MiFID” which was published on 14 October 2009. Alongside, this Feedback Statement, CESR publishes its final policy position in a set of Questions and Answers.
This Feedback Statement sets out CESR’s response to various issues that respondents raised, including by clarifying that:
• a service will only be considered as investment advice if it meets all five of the tests set out in the Questions and Answers; and
• while the tests described in the Questions and Answers apply in relation to both professional clients and retail clients, CESR accepts that in practice firms can often place greater reliance on the ability of professional clients to understand whether they are receiving advice.
Other issues discussed in this Feedback Statement include respondents‟ views and concerns about:
• the inclusion of potentially subjective criteria in assessing whether or not a particular service amounts to advice (including a client‟s perception of the service he receives);
• the potential for recommendations to be made implicitly, or to be implicitly presented as suitable;
• the risk that marketing communications will be viewed as presented as suitable or based on personal circumstances; and
• different ways in which investment advice and corporate finance advice might be distinguished from one another.
© CESR - Committee of European Securities Regulators
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