Since our last newsletter, ESMA has updated its Q&A on the Market in Financial Instruments Directive 2014/65/EU of 15 May 2014 (“MiFID II”) and on the Markets in Financial Instruments Regulation 600/2014 of 15 May 2014 (“MiFIR”), on the following topics:
- Q&A on MiFID II Investor Protection and intermediaries (the “Investor Protection Q&A”)
- Q&A on MiFID II and MiFIR Transparency and market structure topics
- Q&A on MiFIR Data Reporting
- Q&A on MiFID II and MiFIR Transparency
In this article, we will only focus on the Investor Protection Q&A which includes one new Q&A relating to inducements. In particular, ESMA provides us with clarification on the application of the definition of “acceptable minor non-monetary benefits” which is given in paragraph 3 Article 12 of Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing MiFID II (the “MiFID II Delegated Directive”).
Article 12, paragraph 3 of the MiFID II Delegated Directive defines “acceptable minor non-monetary benefits” as benefits that are “reasonable and proportionate and of such a scale that they are unlikely to influence the investment firm’s behaviour in any way that is detrimental to the interests of the relevant client” and also lists various examples of what qualifies as “acceptable minor non-monetary benefits”. This definition is given in the context of inducements in respect of investment advice on an independent basis or portfolio management services.
ESMA has now clarified with this new Q&A that “acceptable minor non-monetary benefits” should be construed within the meaning as set out in Article 12, paragraph 3 of the MiFID II Delegated Directive irrespective of the investment service or ancillary service provided.