In its consultation paper Inducements under MiFID published in December 2006 (CESR/06-687), CESR explained that it was considering issuing recommendations to its Members with the aim of fostering supervisory convergence and consistent implementation of Article 26 of the MiFID Level 2 Directive.
CESR is in the process of finalising these recommendations.
Article 26 of the MiFID Level 2 Directive, entitled "Inducements", sets out requirements in relation to the receipt or payment by an investment firm of a fee, commission or non-monetary benefit that could place the firm in a situation where it would not be acting in compliance with the principle in MiFID Article 19(1) that the firm act honestly, fairly and professionally in accordance with the best interest of its clients.
CESR has considered the views of market participants, following the publication of the December 2006 consultation paper and has taken these responses into account in developing the draft recommendations. In order to achieve an open and transparent process CESR has decided to publicly re-consult on an amended draft of its recommendations.
Today's announcement therefore launches a second consultation on the draft recommendations on inducements under MiFID. This consultation provides the opportunity for all stakeholders to provide input in the development of recommendations in this important area of the new regulatory framework.
The consultation paper contains six draft recommendations which have been developed from the material published in the December 2006 consultation paper in light of the responses received from the industry and consumer representatives. The consultation paper also contains a number of additional examples from the Inducements under MiFID consultation paper, which illustrate some of the variety of situations in which Article 26 of the Level 2 Directive is relevant. Respondents should therefore focus on the new aspects of the draft recommendations, rather than repeat the arguments made in response to the December 2006 consultation.
Responses are welcomed by 27 April 2007 and can be submitted on the CESR website. CESR will be hosting a public hearing in its premises on 24 April 2007. CESR plans to publish the final recommendations by the end of May 2007.