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---
title: "ESMA Q&A 1787 — Q&A — Underwriting and placing [Answer Published]"
shortTitle: "ESMA Q&A 1787 — Q&A — Underwriting and placing [Answer Published]"
answer_id: ESMA_QA_1787
topic: "Underwriting and placing"
status: "Answer Published"
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instrument_type: qa
authority: ESMA
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legal_status: in_force
regulation: "MiFID II"
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date: 16 December 2016
source_link: https://www.esma.europa.eu/publications-data/questions-answers/1787
lifecycle: "Answer Published"
text_version: "ESMA Q&A register, 16 December 2016"
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---

**Answer by ESMA, published in its Q&A tool · not legislation · published 16 Dec 2016 [Answer Published]**

*Answer Published · ESMA Q&A register, 16 December 2016 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/1787)*

| | |
|---|---|
| **Full title** | ESMA Q&A 1787 — Q&A — Underwriting and placing \[Answer Published\] |
| **Prepared by** | ESMA |
| **Published by** | ESMA, in the ESMA Q&A tool |
| **Reference** | ESMA_QA_1787 |
| **Document type** | Q&A |
| **Legal nature** | Not legislation |
| **Addressees** | Not stated in the document |
| **Dates** | Published 16 December 2016; question submitted 16 December 2016 |
| **Legal basis** | MiFID II |
| **Related instruments** | None recorded |
| **Text on this page** | Word for word — the full text of the ESMA publication |

**Underwriting and placing**

### Question

What records should be kept by firms when providing underwriting or placing services and how should firms justify their final allocations to each investment client?

***

### Answer

\[ESMA 35-43-349 MiFID II Q&As on Investor protection Ch. 6, question 3\]

In order to be able to demonstrate to NCAs how they meet their obligations to the issuer client when providing underwriting and placing services, as well as their obligation to manage conflicts of interest between different clients or groups of clients, firms should have a process to record allocation decisions at material stages in the allocation process.

Records of allocations decisions should include:

a. The firm’s overarching allocation policy under Article 40(4) in force at the time of the commencement of the service;

b. The firm’s initial discussion with the issuer client and the agreed proposed allocation per type of investment client, as required by Article 40(5);

c. The content and timing of allocation requests received from each investment client with an indication of their type;

d. Where relevant, any further discussion and instructions or preferences provided by the issuer client, other members of the syndicate, or the firm itself, on the allocation process, including any emerging in light of allocation requests received from investment clients;

e. The final allocations registered in each individual investment client’s account.

Firms must provide a justification for the final allocation made to each investment client. For this purpose, a justification should explicitly provide detailed reasoning behind the final allocation unless firms can evidence that such detail has been provided through records maintained at stages (a-e) in the allocation process. Particular care should be given to justifications to any investment clients that appear in either of the following two rankings of the final allocation:

investors that receive a final allocation (recorded in (e) above) in the top 20% of the total allocation ranked by investor in descending order of size of allocation to each investor; or

investors that receive a final allocation in the top 20% of the total allocation ranked by investor in descending order of the percentage allocation granted to each investor divided by the percentage bid by each investor (i.e. the relative extent to which each investor has their order (recorded in (c) above) reduced in the final allocation (recorded in (e) above).

***

**Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/1787)