ESMA · ESMA_QA_1760 Answer Published
Suitability and appropriateness
- Regulation
- Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Investor Protection and Intermediaries
- Topic
- Suitability
- Submitted
- 2016-10-10
- Answered
- 2016-10-10
Question
Shall a suitability report be provided to the client when the advice given is not to buy or sell a financial instrument?
Answer
[ESMA35-43-349 MiFIDII Investor protection Q&As Ch2 question 5] Yes. Firms providing investment advice are required to always provide the client with a suitability report, irrespective of the specific recommendation given, including the advice not to buy, hold or sell a financial instrument. In this regard, Recital 87 of the MiFID II Delegated Regulation specifically clarifies that “investment firms should undertake a suitability assessment not only in relation to [when] recommendations to buy a financial instrument are made but for all decisions whether to trade including whether or not to buy, hold or sell an investment”.
This Q&A is published by European Securities and Markets Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.
Similar Q&As
More Q&As on this topic
📋 Track EU financial regulation continuously
Forseti monitors EU financial regulation and delivers personalised alerts anchored to verified official sources.
14-day free trial. No credit card required.