Provision of services at the exclusive initiative of the client - MiFID 2 Provision

MiFID 2 Anatomy™ →Go uptown In a Nutshell™ Section 42: 42. Provision of services at the exclusive initiative of the client Where an EU client solicits (exclusively) an investment service from a third-country firm, the third-country firm is not required to be authorised under Article 39 for that investment service. Just because a client has made such a solicitation it does not entitle the third-country firm to market other investment products or services to that client. view template Full wikitext: 42. Provision of services at the exclusive initiative of the client Member States shall ensure that where a retail client or professional client within the meaning of Section II of Annex II established or situated in the Union initiates at its own exclusive initiative the provision of an investment service or activity by a third-country firm, the requirement for authorisation under Article 39 shall not apply to the provision of that service or activity by the third-country firm to that person including a relationship specifically relating to the provision of that service or activity. An initiative by such clients shall not entitle the third-country firm to market otherwise than through the branch, where one is required in accordance with national law, new categories of investment products or investment services to that client. view template MiFID 2: Less fondly known as EU Directive 2014/65/EU (EUR Lex) | MiFID 1Articles: 16(7) (Recording of Communications) Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

The provision by which MiFID 2 formalised the “reverse inquiry” idea. Don’t get carried away now, folks. And don't think you can innocently market stuff and get away with it:

Quoth ESMA:

According to Article 42 of MiFID II, where a retail client or professional client ... established or situated in the Union initiates at its own exclusive initiative the provision of an investment service or activity by a third-country firm, the third country firm is not subject to the requirements under Article 39.

As provided in recital 111, in order to qualify for Article 42 of MiFID II, “where a third-country firm solicits clients or potential clients in the Union or promotes or advertises investment services or activities together with ancillary services in the Union, it should not be deemed as a service provided at the own exclusive initiative of the client”.

...ESMA is of the view that every communication means used such as press releases, advertising on internet, brochures, phone calls or face-to-face meetings should be considered to determine if the client or potential client has been subject to any solicitation, promotion or advertising in the Union on the firm’s investment services or activities or on financial instruments.

See also

• reverse inquiry