Independent Investment Advice under MiFID II

Abstract

Distinction of independent and “non-independent” investment advice along with related duties of investment firms is one of the highlights brought by the recast of Markets in financial instruments directive to the area of European investment services regulation. Within the scope of the paper, the attention will be focused mainly on answering the important question: what makes independent investment advice independent? In other words, distinction of both above-mentioned ways the investment firm provides its advisory services, along with the question of “limited” independent investment advice, i.e. advice of an investment firm with a limited scope of financial instruments considered, will be addressed. The regulatory regime of independent investment advice is a superstructure of the general regime in three following levels: the level of variety of financial instruments considered, the level of taking into account the relationship between respective investment firm and providers, issuers or distributors of financial instruments considered within the provided investment advice and finally in the level of inadmissibility of receiving incentives related to the provided investment advice. Analysis of the first conceptual characteristic, namely the assessment of a sufficiently wide range of financial instruments, will be carried out. Relevant issues connected with prospective application of the regulatory regime, as well as several questionable issues that might lower the legal certainty level of the investment firms providing independent investment advice in the future will be pointed out.

Keywords: Investment Firm, MiFID II, Non-Independent Investment Advice, Independent Investment Advice, Variety of Financial Instruments