Directive 2003/125 - Implementation of Directive 2003/6/EC as regards the fair presentation of investment recommendations and the disclosure of conflicts of interest - Main contents

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Commission Directive 2003/125/EC of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards the fair presentation of investment recommendations and the disclosure of conflicts of interest (Text with EEA relevance)

Official Journal L 339 , 24/12/2003 P. 0073 - 0077

Commission Directive 2003/125/EC

of 22 December 2003

implementing Directive 2003/6/EC of the European Parliament and of the Council as regards the fair presentation of investment recommendations and the disclosure of conflicts of interest

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse)(1), and in particular the sixth indent of Article 6(10) thereof,

After consulting the Committee of European Securities Regulators (CESR)(2) for technical advice,

Whereas:

• (1) 

  Harmonised standards are necessary for the fair, clear and accurate presentation of information and disclosure of interests and conflicts of interest, to be complied with by persons producing or disseminating information recommending or suggesting an investment strategy, intended for distribution channels or for the public. In particular, market integrity requires high standards of fairness, probity and transparency when information recommending or suggesting an investment strategy is presented.

• (2) 

  Recommending or suggesting an investment strategy is either done explicitly (such as "buy", "hold" or "sell" recommendations) or implicitly (by reference to a price target or otherwise).

• (3) 

  Investment advice, through the provision of a personal recommendation to a client in respect of one or more transactions relating to financial instruments (in particular informal short-term investment recommendations originating from inside the sales or trading departments of an investment firm or a credit institution expressed to their clients), which are not likely to become publicly available, should not be considered in themselves as recommendations within the meaning of this Directive.

• (4) 

  Investment recommendations that constitute a possible basis for investment decisions should be produced and disseminated in accordance with high standards of care in order to avoid misleading market participants.

• (5) 

  The identity of the producer of investment recommendations, his conduct of business rules and the identity of his competent authority should be disclosed, since it may be a valuable piece of information for investors to consider in relation to their investment decisions.

• (6) 

  Recommendations should be presented clearly and accurately.

• (7) 

  Own interests or conflicts of interest of persons recommending or suggesting investment strategy may influence the opinion that they express in investment recommendations. In order to ensure that the objectivity and reliability of the information can be evaluated, appropriate disclosure should be made of significant financial interests in any financial instrument which is the subject of the information recommending investment strategies, or of any conflicts of interest or control relationship with respect to the issuer to whom the information relates, directly or indirectly. However, this Directive should not require relevant persons producing investment recommendations to breach effective information barriers put in place in order to prevent and avoid conflicts of interest.

• (8) 

  Investment recommendations may be disseminated in unaltered, altered or summarised form by a person other than the producer. The way in which disseminators handle such recommendations may have an important impact on the evaluation of those...

This text has been adopted from EUR-Lex.

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