ESMA_QA_2249
Status: ✅ Answer Published
Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/2249
Regulatory Context
Regulation : MIF2
Level 1 Regulation: Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Investor Protection and Intermediaries
Level 2 Regulation: Regulation 2017/565 - MiFID II Delegated Regulation
Level 3 Regulation: No information available
Topic: Investment advice on an independent basis
Subject Matter: Scope of the exemptions provided for in article 2(1), (c) and (k) of Directive 2014/65/EU (MiFID II)
Question
Submission Date: 12 August 2024
We would like to submit to you the two following questions regarding the ambit of the exemptions provided for in article 2(1), under points (c) and (k) of Directive 2014/65/EU (MiFID II).
• As regards art. 2(1)(c) of MiFID II, the provision states that :
“The Directive shall not apply to (…) persons providing an investment service where that service is provided in an incidental manner in the course of a professional activity and that activity is regulated by legal or regulatory provisions or a code of ethics governing the profession which do not exclude the provision of that service”.
Article 4 of the Commission Delegated Regulation 2017/565 then states further that :
“(…) an investment service shall be deemed to be provided in an incidental manner in the course of a professional activity where the following conditions are satisfied: (a) a close and factual connection exists between the professional activity and the provision of the investment service to the same client, such that the investment service can be regarded as accessory to the main professional activity ; (…)”.
Moreover, Recital 34 of this Delegated Regulation states that “the exemption should only apply if the investment service has an intrinsic connection to the main area of the professional activity and is subordinated thereto”.
Given the foregoing, assuming that conditions (b) and (c) from article 4 of the Delegated Regulation are met, should article 2(1)(c) of MiFID be construed as meaning that, in order to benefit from the exemption thereunder, it suffices that the provision of an investment service is complementary to the provision another service otherwise regulated, and do not need to be necessary to the provision of that other service?
• As regards art. 2(1)(k) of MiFID II, the provision states :
“The Directive shall not apply to (…) persons providing investment advice in the course of providing another professional activity not covered by this Directive provided that the provision of such advice is not specifically remunerated”.
Assuming that the investment advice is not specifically remunerated, should this article be construed as meaning that, in order to benefit from the exemption thereunder, it is necessary but sufficient that the investment advice is made in the context of the provision of another service (not covered by the Directive), irrespective of whether the investment advice is ancillary, incidental, complementary or even, factually or otherwise, connected to the other service, and irrespective of whether the activity is regulated?
ESMA Answer
Answer Date: 22-01-2025
Dear Sir/Madam, Thank you for contacting ESMA. ESMA is committed to replying to questions from market participants and to develop them to Q&As. However, due to the significant number of questions received, ESMA is not in the position to address all issues raised by market participants and has to prioritise them. The selection of questions to be developed into Q&As through this web-based tool is done taking into account a number of criteria related to the level of public attention and relevance of the topic from an overall EU perspective, also taking into account the type of stakeholder represented. Having carefully considered your question and considering the above criteria and current number of questions that have been addressed to us recently, ESMA will unfortunately not be in a position to develop a Q/A in relation to this question. Despite not being able to provide a Q&A on this occasion ESMA welcomes questions from you also in the future and invites you to take part of numerous Q&As and other guidance the ESMA has developed to seek guidance among that material. Regards, ESMA
This document was automatically extracted from the ESMA EMIR Q&A database.