Requirement (MIFID)
Article 27 Conditions with which information must comply in order to be fair, clear and not misleading
Requirements MIFID - DIRECTIVE 2006/73/EC
Description
Description
1. Member States shall require investment firms to ensure that
all information they address to, or disseminate in such a way that
it is likely to be received by, retail clients or potential retail
clients, including marketing communications, satisfies the
conditions laid down in paragraphs 2 to 8.
2. The information referred to in paragraph 1 shall include the
name of the investment firm.
It shall be accurate and in particular shall not emphasise any
potential benefits of an investment service or financial instrument
without also giving a fair and prominent indication of any
relevant risks.
It shall be sufficient for, and presented in a way that is likely to be
understood by, the average member of the group to whom it is
directed, or by whom it is likely to be received.
It shall not disguise, diminish or obscure important items,
statements or warnings.
3. Where the information compares investment or ancillary
services, financial instruments, or persons providing investment
or ancillary services, the following conditions shall be satisfied:
(a) the comparison must be meaningful and presented in a fair
and balanced way;
(b) the sources of the information used for the comparison
must be specified;
(c) the key facts and assumptions used to make the comparison
must be included.
4. Where the information contains an indication of past
performance of a financial instrument, a financial index or an
investment service, the following conditions shall be satisfied:
(a) that indication must not be the most prominent feature of
the communication;
(b) the information must include appropriate performance
information which covers the immediately preceding 5
years, or the whole period for which the financial
instrument has been offered, the financial index has been
established, or the investment service has been provided if
less than five years, or such longer period as the firm may
decide, and in every case that performance information
must be based on complete 12-month periods;
(c) the reference period and the source of information must be
clearly stated;
(d) the information must contain a prominent warning that the
figures refer to the past and that past performance is not a
reliable indicator of future results;
(e) where the indication relies on figures denominated in a
currency other than that of the Member State in which the
retail client or potential retail client is resident, the currency
must be clearly stated, together with a warning that the
return may increase or decrease as a result of currency
fluctuations;
(f) where the indication is based on gross performance, the
effect of commissions, fees or other charges must be
disclosed.
5. Where the information includes or refers to simulated past
performance, it must relate to a financial instrument or a
financial index, and the following conditions shall be satisfied:
(a) the simulated past performance must be based on the actual
past performance of one or more financial instruments or
financial indices which are the same as, or underlie, the
financial instrument concerned;
(b) in respect of the actual past performance referred to in
point (a), the conditions set out in points (a) to (c), (e) and
(f) of paragraph 4 must be complied with;
(c) the information must contain a prominent warning that the
figures refer to simulated past performance and that past
performance is not a reliable indicator of future performance.
6. Where the information contains information on future
performance, the following conditions shall be satisfied:
(a) the information must not be based on or refer to simulated
past performance;
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Comment
Applies to Article 19(2) of Directive 2004/39/EC