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MiFID II › Level 3 › Q&A › ESMA

ESMA Q&A 1760 — Q&A — Suitability and appropriateness [Answer Published]

Financial servicesLevel 3Q&AMiFID IIAnsweredOfficial source

Suitability and appropriateness

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”.

Source: ESMA original document