EBF’s response to CESR’s Consultation on understanding the definition of advice under MiFID
04 January 2010
CESR’s understanding of “advice” is very broad and in contradiction with the current legal situation in most Member States.
Generally, the distinction between information and investment advice is made on the basis of the existence of an explicit advisory contract, or when information is clearly provided as a personal recommendation with regard to the best option for the client.
There is also significant objection to CESR’s approach of relying on the client’s subjective understanding in defining advice, which would result in harmful legal uncertainty.
The clear difference made in MiFID between investment advice, as a core service, and the ancillary service of corporate finance advice should be better reflected in CESR’s guidance. The motives underlying the respective transactions are fundamentally different.
© EBF
