CESR recommendations on inducements

29 May 2007

CESR issued its recommendations to foster supervisory convergence and consistent implementation of Inducements. The document contains six recommendations and a number of supporting examples which illustrate some of the variety of situations in which Article 26 of the MiFID Level 2 Directive is relevant. The recommendations themselves clarify the range of application of the regime, specifying a common approach to the understanding of the different categories of payments within Article 26.

The paper also introduces some indicative factors to help supervisors establish whether specific third-party payments are likely to meet the regulatory tests within Article 26(b). The paper further clarifies the effect of Recital 39 in interpreting the operative provisions Article 26. Finally, some direction is provided with regard to the possibility for firms to have recourse to summary disclosure in connection with third party payments.

CESR has adjusted some of its views in response to significant issues raised by stakeholders both as a result of the two public consultations on inducements and the two open hearings. CESR also publishes a Feedback Statement which sets out how the issues raised during consultation have been considered and reflected in the final recommendations.

Recommendations
Feedback statement

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