Direct Offer Financial Promotions

Question 1

What does a direct offer financial promotion contain?

Answer 1

1. An offer to enter into a controlled agreement –
   A. A firm (or another person) is directly offering someone the opportunity to enter into a regulated financial agreement if they respond to the communication.
2. An invitation to make an offer –
   A. Communication that invites a recipient to make an offer to enter into a controlled agreement with the firm (or another person). It must either:
   I. Specify how the person should respond, or
   II. Include a form that allows them to respond.
3. Under MiFID – a controlled agreement also includes agreements related to ancillary services (e.g. these support investment activities, i.e. investment research/ custody services).

Question 2

When a firm makes a direct offer financial promotion that is addressed to, or disseminated in such a way that it is likely to be received by a retail client -

what should it contain?

Answer 2

1. Required information –
   A. Promotion must include the necessary and relevant information on the offer/ invitation as per the rules on information disclosure
2. If not related to MiFID –
   A. Firm must provide additional appropriate information about the relevant business and investments.
   B. This ensures that the client can:
   I. Understand the nature and risks of the business and investments.
   II. Make informed investment decisions based on clear and sufficient details.

3 If responding to the offer or invitation requires the retail client to refer to another document that contains the necessary information, then that information does not need to be included in the direct offer financial promotion itself.