EU · MiFID II · TITLE II AUTHORISATION AND OPERATING CONDITIONS FOR INVESTMENT FIRMS · CHAPTER IV Provision of investment services and activities by third country firms · Section 1 Provision of services or performance of activities through the establishment of a branch
Article 42 MiFID IIProvision of services at the exclusive initiative of the client
Reverse solicitation: a third-country firm needs no branch authorisation to serve a retail or elective professional client in the EU who approaches it on their own exclusive initiative, but any solicitation by the firm or associated persons (outside intra-group relations) defeats the exemption, and the firm may not use the contact to market new categories of products or services except through a required branch.
Amendments and application dates
| Amending act | Change | Applies from |
|---|---|---|
| Directive (EU) 2019/2034 | Provision replaced | by 26 Jun 2021 |
Level 3: ESMA Q&As, guidelines and opinions
- Q&AAnsweredExplicit reference · 90%
AI summaryUnder reverse solicitation (Article 42 MiFID II), a third-country firm may offer a client products of the same category only during the transaction the client initiated, not later, unless the client again asks on its own exclusive initiative.
- Q&AAnsweredExplicit reference · 90%
AI summaryFor reverse solicitation under Article 42 MiFID II and Article 46 MiFIR, ESMA lists pairs of products that are not in the same category, such as complex versus non-complex debt, listed versus unlisted securities, subordinated versus senior debt, shares versus ETFs, UCITS versus AIFs and PRIIPs with different risk indicators; instruments in different Annex I Section C categories are always different products.
- Q&AAnsweredExplicit reference · 90%
AI summaryA service is provided at the client's own exclusive initiative under Article 42 MiFID II only if the third-country firm, or anyone acting for it or closely linked to it, has not solicited, promoted or advertised in the EU by any means; this is assessed case by case for each service, regardless of contractual disclaimers, and the same approach applies under Article 46 MiFIR.
- Q&AAnsweredExplicit reference · 90%
AI summaryFor reverse solicitation under Article 42 MiFID II and Article 46 MiFIR, a third-country firm provides a new investment service if it adds it after 3 January 2018, and may not market new categories of products, judged case by case by type, complexity and riskiness, granularly enough to prevent circumvention of national regimes.
- Q&ALegacy Q&A documentESMA rulebook
AI summaryESMA's consolidated legacy Q&A document (ESMA35-43-349, final version 15 December 2023) on MiFID II investor protection topics, including best execution, suitability, call recording, inducements and research, costs and charges, client categorisation, third-country firms and product governance. It is no longer updated; Q&As from 2024 are in ESMA's Q&A tool.
Commentary
No law-firm commentary is linked to this provision yet.
393 more documents relate to MiFID II as a whole without naming an article.
UK counterpart
UK transposition not traced in the FCA Handbook. It may sit in FSMA, the Regulated Activities Order or SI 2017/701, which are not yet mapped.
Version history
- From 26 Jun 2021
- From 17 Sept 2014 to 26 Jun 2021
Each entry is a consolidated version of the act on EUR-Lex in which this provision appears. The text itself is on the official site.