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01 December 2011

Impact Amber traffic light Medium impact – more compliance obligations when communicating with eligible counterparties

Other areas to consider

Best interests of clients

Current MiFID rules

High level principle

All information, including marketing communications, addressed by the firm to clients/potential clients must be fair, clear and not misleading.

MiFID sets out a number of conditions with which a communication to a retail client must comply in order to comply with the high level requirement. The conditions should be applied in a way that is appropriate and proportionate.

MiFID Art: 19(2))

MiFID Implementing Directive Arts: 27

FSA rules


Proposed changes
Draft Directive Article 30(1)

To address concerns arising out of alleged mis-selling practices that non-retail clients are not always able to understand the risks they are subject to, the draft Directive clarifies that MiFID’s principles to act honestly, fairly and professionally and the obligation to be fair, clear and not misleading also apply to communications with eligible counterparties.

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