Placing without a firm commitment
Distributing securities to investors on a best-efforts basis without guaranteeing subscription requires an investment firm licence or a banking licence under MiFID II Annex I, Section A(7). Authorised placement agents benefit from EU passporting rights, and must enforce stringent conflict-of-interest procedures between corporate issuing clients and prospective private or institutional investors.
Definition
Placing financial instruments with investors on a best-efforts basis, without guaranteeing the sale.
- MiFID II, Annex I, Section A(7): official text
Which licence you need
Licence families that typically permit this activity:
- IF · Cyprus
Cyprus Investment Firm (CIF) authorisation
CySEC
- IF · Czech Republic
Investment Firm licence (povolení k činnosti obchodníka s cennými papíry - OCP)
CNB
- IF · Estonia
Authorisation as an investment firm
FI
- IF · Germany
Investment firm licence (Erlaubnis zur Erbringung von Wertpapierdienstleistungen nach § 15 WpIG)
BaFin
- IF · Ireland
Investment Firm Authorisation (MiFID II)
CBI
- IF · Italy
Società di Intermediazione Mobiliare (SIM) investment firm licence
CONSOB
- IF · Latvia
Investment firm licence
LB
- IF · Lithuania
Financial brokerage firm licence
LB
- IF · Luxembourg
Investment firm authorisation
CSSF
- IF · Malta
Investment services licence (Category 1, 2, or 3)
MFSA
- IF · Netherlands
Investment firm licence (Vergunning beleggingsonderneming) under Wft Article 2:96 and MiFID II
AFM
- IF · Poland
Brokerage House licence (dom maklerski)
KNF
- IF · Slovakia
Investment firm licence (povolenie na poskytovanie investičných služieb pre obchodníka s cennými papiermi)
NBS
- IF · Spain
Sociedad de Valores y Agencia de Valores (SV / AV) investment firm licence
CNMV
Where it can be licensed
Frequently asked questions
How does placing without a firm commitment differ from underwriting?
Placing without a firm commitment acts on a best-efforts basis; the distributor acts as an agent and does not guarantee the sale or purchase unsold securities. In underwriting, the institution commits its own capital to buy any unsubscribed shares or bonds.
What conflict-of-interest controls are mandatory when placing securities?
Placement agents must manage potential conflicts between the issuer seeking high valuation and investor clients seeking attractive returns. Firms cannot allocate overpriced placements to captive discretionary client portfolios without explicit justification and robust internal governance controls.
Sources
- MiFID II Annex I, Section A(7) · retrieved 2026-09-24
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