--- title: "ESMA Q&A 1846 — Q&A — Appropriateness Complex Financial Instruments [Answer Published]" shortTitle: "ESMA Q&A 1846 — Q&A — Appropriateness Complex Financial Instruments [Answer Published]" answer_id: ESMA_QA_1846 topic: "Appropriateness" status: "Answer Published" type: qa instrument_type: qa authority: ESMA binding: false binding_character: non_binding legal_status: in_force regulation: "MiFID II" mifid_level3: true mica_level2: false legal_basis: "MiFID II" date: 6 June 2017 source_link: https://www.esma.europa.eu/publications-data/questions-answers/1846 lifecycle: "Answer Published" text_version: "ESMA Q&A register, 6 June 2017" source_url: "https://www.esma.europa.eu/publications-data/questions-answers/1846" check_status: matched verified: true last_checked: 2026-10-26 checked_against: "the ESMA publication" source: prepared_by: "ESMA" published_by: "ESMA" published_in: "ESMA Q&A tool" evidence: prepared_by: "ESMA Answer" locator: "ESMA Q&A entry ESMA_QA_1846: field 'ESMA Answer', no 'Answer provided by' line" document_type: "qa_answer" legal_nature: "not_legislation" addressees: "not stated in the document" dates: published_on: "2017-06-06" question_submitted_on: "2017-06-06" locators: published_on: "ESMA Q&A Excel export ESMA_QA_1846, column 'Esma responses', date line" question_submitted_on: "ESMA Q&A Excel export ESMA_QA_1846, column 'Date of submission'" lifecycle_label: "Answer Published" --- **Answer by ESMA, published in its Q&A tool · not legislation · published 6 Jun 2017 [Answer Published]** *Answer Published · ESMA Q&A register, 6 June 2017 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/1846)* | | | |---|---| | **Full title** | ESMA Q&A 1846 — Q&A — Appropriateness Complex Financial Instruments \[Answer Published\] | | **Prepared by** | ESMA | | **Published by** | ESMA, in the ESMA Q&A tool | | **Reference** | ESMA_QA_1846 | | **Document type** | Q&A | | **Legal nature** | Not legislation | | **Addressees** | Not stated in the document | | **Dates** | Published 6 June 2017; question submitted 6 June 2017 | | **Legal basis** | MiFID II | | **Related instruments** | None recorded | | **Text on this page** | Word for word — the full text of the ESMA publication | **Appropriateness Complex Financial Instruments** ### Question Can shares in non-UCITS collective investment undertakings explicitly excluded under point (i) of Article 25(4)(a) of MiFID II be nevertheless assessed against the criteria set out in Article 57 of the MiFID II Delegated Regulation and as a consequence potentially be deemed non-complex financial instruments for the purposes of the appropriateness test? *** ### Answer \[ESMA 35-43-349 MiFID II Q&As on Investor protection Ch. 10, question 1\] No. Article 25(4) of MiFID II allows, subject to certain conditions, MiFID firms to provide execution and/or reception and transmission of orders services without having to assess the appropriateness of the product for the client. One condition is that the service to be provided does not relate to a complex product. MiFID II has further clarified which instruments should be deemed complex per se. Shares in non-UCITS explicitly excluded from the universe of non-complex products are complex per se and cannot be reassessed against the criteria set out in Article 57 of the MiFID II Delegated Regulation. This approach is confirmed by Recital 80 of MiFID II which clarifies that: “Investment firms are allowed to provide investment services that consist only of execution and/or of the reception and transmission of client orders, without the need to obtain information regarding the knowledge and experience of the client in order to assess the appropriateness of the service or the financial instrument for the client. Since those services entail a relevant reduction of client protection, it is appropriate to improve the conditions for their provision. (...). It is also appropriate to better define the criteria for the selection of the financial instruments to which those services should relate in order to exclude certain financial instruments, including those which embed a derivative or incorporate a structure which makes it difficult for the client to understand the risk involved, shares in undertakings that are not undertakings for collective investment in transferable securities (UCITS) (non-UCITS collective investment undertakings) and structured UCITS as referred to in the second subparagraph of Article 36(1) of Commission Regulation (EU) No 583/2010” (our underlining[^1]). The treatment of shares (or units[^2]) in non-UCITS as complex products does not prohibit firms from selling these instruments but only ensures a higher level on investor protection by requiring MiFID firms to carry out the appropriateness test before providing MiFID execution services in relation to these instruments. \---------- [^1]: This position has also been stated by ESMA in its Technical Advice on MiFID II (19 December 2014, ESMA/2014/1569). [^2]: ESMA has already clarified that investments in non-UCITS collective investment undertakings should be considered complex, regardless of whether they take the legal form of shares or of units (ESMA/2014/1569, page 159). *** **Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/1846)