MiFID
COM(2011)0656 (2011/0268(COD)
part 1 (recitals)
Document dated: 11 February 2014
COM
Council
EP
Compromise
-1.
DIRECTIVE OF THE EUROPEAN
DIRECTIVE OF THE
DIRECTIVE OF THE
Agreed
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procedure
PARLIAMENT AND OF THE
EUROPEAN PARLIAMENT AND
EUROPEAN PARLIAMENT AND
20131008
COUNCIL
OF THE COUNCIL
OF THE COUNCIL
Trilogue 20131218: agreed to
on markets in financial instruments
on markets in financial instruments
on markets in financial instruments
include changes from non-paper on
repealing Directive 2004/39/EC of
repealing Directive 2004/39/EC of
repealing Directive 2004/39/EC of
AIFMD
the European Parliament and of the
the European Parliament and of the
the European Parliament and of the
DIRECTIVE OF THE
Council
Council
Council
EUROPEAN PARLIAMENT AND
(Recast)
(Recast)
(Recast)
OF THE COUNCIL
on markets in financial instruments
repealing Directive 2004/39/EC of
the European Parliament and of the
Council
and amending Directive
2011/61/EU on Alternative
Investment Fund Managers
(Recast)
Trilogue 20140114: agreed to
include changes from non-paper on
insurance
DIRECTIVE OF THE
EUROPEAN PARLIAMENT AND
OF THE COUNCIL
on markets in financial instruments
repealing Directive 2004/39/EC of
the European Parliament and of the
Council
and amending Directive
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2011/61/EU on Alternative
Investment Fund Managers and
Directive 2002/92/EC on
insurance mediation
(Recast)
1.
THE EUROPEAN PARLIAMENT
THE EUROPEAN PARLIAMENT
THE EUROPEAN PARLIAMENT
Agreed
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AND THE COUNCIL OF THE
AND THE COUNCIL OF THE
AND THE COUNCIL OF THE
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EUROPEAN UNION,
EUROPEAN UNION,
EUROPEAN UNION,
THE EUROPEAN PARLIAMENT
AND THE COUNCIL OF THE
EUROPEAN UNION,
2.
Having regard to the Treaty on the
Having regard to the Treaty on the
Having regard to the Treaty on the
Agreed
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functioning of the European Union,
functioning of the European Union,
functioning of the European Union,
20131008
and in particular Article 53(1)
and in particular Article 53(1)
and in particular Article 53(1)
Having regard to the Treaty on the
thereof,
thereof,
thereof,
functioning of the European Union,
and in particular Article 53(1)
thereof,
3.
Having regard to the proposal from
Having regard to the proposal from
Having regard to the proposal from
Agreed
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procedure
the Commission1,
the Commission1,
the
European Commission2,
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Having regard to the proposal from
the
European Commission3,
4.
After transmission of the right
After transmission of the right
After transmission of the
draft
Agreed
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legislative act to the national
legislative act to the national
legislative act to the national
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Parliaments,
Parliaments,
parliaments,
After transmission of the
draft
legislative act to the national
parliaments,
5.
Having regard to the opinion of the
Agreed
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European Central Bank4,
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1 OJ C 71 E, 25.3.2003, p. 62.
1 OJ C 71 E, 25.3.2003, p. 62.
2 OJ C 71 E, 25.3.2003, p. 62.
3 OJ C 71 E, 25.3.2003, p. 62.
4 OJ C 144, 20.6.2003, p. 6.
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[See row 7. Lawyer linguists to
confirm correct location.]
Having regard to the opinion of the
European Central Bank5,
6.
Having regard to the Opinion of the
Having regard to the Opinion of the
Having regard to the
opinion of the
Agreed
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European Economic and Social
European Economic and Social
European Economic and Social
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Committee6,
Committee2,
Committee7,
Having regard to the
opinion of the
European Economic and Social
Committee8,
7.
Having regard to the opinion of the
Having regard to the opinion of the
//
Agreed
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procedure
European Central Bank9,
European Central Bank3,
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[...]
[See Technical group proposal in
row 5]
8.
After consulting the European Data
After consulting the European Data
//
Agreed
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Protection Supervisor,
Protection Supervisor,
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[...]
[See recital 114a, row 152. Lawyer
linguists to confirm correct
location]
9.
Acting in accordance with the
Acting in accordance with the
Acting in accordance with the
Agreed
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ordinary legislative procedure,
ordinary legislative procedure,
ordinary legislative procedure,10
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Acting in accordance with the
5 OJ C 144, 20.6.2003, p. 6.
6 OJ C 220, 16.9.2003, p. 1.
2 OJ C 220, 16.9.2003, p. 1.
7 OJ C 220, 16.9.2003, p. 1.
8 OJ C 220, 16.9.2003, p. 1.
9 OJ C 144, 20.6.2003, p. 6.
3 OJ C 144, 20.6.2003, p. 6.
10
Position of the European Parliament of 26 October 2012.
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ordinary legislative procedure,11
10.
Whereas:
Whereas:
Whereas:
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Whereas:
11.
Rec. 1
(1) Directive 2004/39/EC of the
(1) Directive 2004/39/EC of the
(1) Directive 2004/39/EC of the
Agreed
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European Parliament and of the
European Parliament and of the
European Parliament and of the
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Council of 21 April 2004 on
Council of 21 April 2004 on
Council of 21 April 2004 on
[Subject to legal-linguistic review]
markets in financial instruments
markets in financial instruments
markets in financial instruments //13
amending Council Directives
amending Council Directives
has been substantially amended
(1) Directive 2004/39/EC of the
85/611/EEC and 93/6/EEC and
85/611/EEC and 93/6/EEC and
several times. Since further
European Parliament and of the
Directive 2000/12/EC of the
Directive 2000/12/EC of the
amendments are to be made, it
Council of 21 April 2004 on
European Parliament and of the
European Parliament and of the
should be recast in the interests of
markets in financial instruments //14
Council and repealing Council
Council and repealing Council
clarity.
has been substantially amended
Directive 93/22/EEC12 has been
Directive 93/22/EEC4 has been
several times. Since further
substantially amended several times.
substantially amended several
amendments are to be made, it
Since further amendments are to be
times. Since further amendments
should be recast in the interests of
made, it should be recast in the
are to be made, it should be recast
clarity.
interests of clarity.
in the interests of clarity.
12.
Rec. 2
(2) Council Directive 93/22/EEC of
(2) Council Directive 93/22/EEC of
(2) Council Directive 93/22/EEC of
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10 May 1993 on investment services
10 May 1993 on investment
10 May 1993 on investment
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in the securities field15 sought to
services in the securities field5
services in the securities field16
(2) Council Directive 93/22/EEC of
establish the conditions under which
sought to establish the conditions
sought to establish the conditions
10 May 1993 on investment
authorised investment firms and
under which authorised investment
under which authorised investment
services in the securities field17
banks could provide specified
firms and banks could provide
firms and banks could provide
sought to establish the conditions
services or establish branches in
specified services or establish
specified services or establish
under which authorised investment
other Member States on the basis of
branches in other Member States on
branches in other Member States on
firms and banks could provide
home country authorisation and
the basis of Home country
the basis of home country
specified services or establish
supervision. To this end, that
authorisation and supervision. To
11
Position of the European Parliament of 26 October 2012.
12 OJ L 145, 30.4.2004, p. 1.
4 OJ L 145, 30.4.2004, p. 1.
13 OJ L 145, 30.4.2004, p. 1.
14 OJ L 145, 30.4.2004, p. 1.
15 OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2002/87/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).
5 OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2002/87/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).
16 OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2002/87/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).
17 OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2002/87/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).
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Directive aimed to harmonise the
authorisation and supervision. To
this end, that Directive aimed to
branches in other Member States on
initial authorisation and operating
this end, that Directive aimed to
harmonise the initial authorisation
the basis of home country
requirements for investment firms
harmonise the initial authorisation
and operating requirements for
authorisation and supervision. To
including conduct of business rules.
and operating requirements for
investment firms including conduct
this end, that Directive aimed to
It also provided for the
investment firms including conduct
of business rules. It also provided
harmonise the initial authorisation
harmonisation of some conditions
of business rules. It also provided
for the harmonisation of some
and operating requirements for
governing the operation of regulated
for the harmonisation of some
conditions governing the operation
investment firms including conduct
markets.
conditions governing the operation
of regulated markets.
of business rules. It also provided
of regulated markets.
for the harmonisation of some
conditions governing the operation
of regulated markets.
13.
Rec. 3
(3) In recent years more investors
(3) In recent years more investors
(3) In recent years more investors
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have become active in the financial
have become active in the financial
have become active in the financial
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markets and are offered an even
markets and are offered an even
markets and are offered an even
(3) In recent years more investors
more complex wide-ranging set of
more complex wide-ranging set of
more complex wide ranging set of
have become active in the financial
services and instruments. In view of
services and instruments. In view of
services and instruments. In view of
markets and are offered an even
these developments the legal
these developments the legal
these developments the legal
more complex wide-ranging set of
framework of the Union should
framework of the Union should
framework of the
European Union
services and instruments. In view of
encompass the full range of
encompass the full range of
should encompass the full range of
these developments the legal
investor-oriented activities. To this
investor-oriented activities. To this
investor-oriented activities. To this
framework of the
European Union
end, it is necessary to provide for
end, it is necessary to provide for
end, it is necessary to provide for
should encompass the full range of
the degree of harmonisation needed
the degree of harmonisation needed
the degree of harmonisation needed
investor-oriented activities. To this
to offer investors a high level of
to offer investors a high level of
to offer investors a high level of
end, it is necessary to provide for
protection and to allow investment
protection and to allow investment
protection and to allow investment
the degree of harmonisation needed
firms to provide services throughout
firms to provide services
firms to provide services
to offer investors a high level of
the Union, being a Single Market,
throughout the Union, being a
throughout the
European Union,
protection and to allow investment
on the basis of home country
Single Market, on the basis of
being an
internal market, on the
firms to provide services
supervision. In view of the
Home country supervision. In view
basis of home country supervision.
throughout the
European Union,
preceding, Directive 93/22/EEC was
of the preceding, Directive
In view of the preceding, Directive
being a
n internal market, on the
replaced by Directive 2004/39/EC.
93/22/EEC was replaced by
93/22/EEC was replaced by
basis of home country supervision.
Directive 2004/39/EC.
Directive 2004/39/EC.
In view of the preceding, Directive
93/22/EEC was replaced by
Directive 2004/39/EC.
14.
Rec. 4
(4) The financial crisis has exposed
(4) The financial crisis has exposed
(4) The financial crisis has exposed
Technical group 20141028
weaknesses in the functioning and
weaknesses in the functioning and
weaknesses in the functioning and
(4) The financial crisis has exposed
in the transparency of financial
in the transparency of financial
in the transparency of financial
weaknesses in the functioning and
markets. The evolution of financial
markets. The evolution of financial
markets. The evolution of financial
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markets have exposed the need to
markets have exposed the need to
markets have exposed the need to
in the transparency of financial
strengthen the framework for the
strengthen the framework for the
strengthen the framework for the
markets. The evolution of financial
regulation of markets in financial
regulation of markets in financial
regulation of markets in financial
markets have exposed the need to
instruments in order to increase
instruments in order to increase
instruments
, including where
strengthen the framework for the
transparency, better protect
transparency, better protect
trading in such markets takes
regulation of markets in financial
investors, reinforce confidence,
investors, reinforce confidence,
place over the counter, in order to
instruments
, including where
reduce unregulated areas, ensure
reduce unregulated areas, ensure
increase transparency, better protect
trading in such markets takes
that supervisors are granted
that supervisors are granted
investors, reinforce confidence,
place over the counter, in order to
adequate powers to fulfil their tasks.
adequate powers to fulfil their
address unregulated areas, ensure
increase transparency, better protect
tasks.
that supervisors are granted
investors, reinforce confidence,
adequate powers to fulfil their
address unregulated areas,
and
tasks.
ensure that supervisors are granted
adequate powers to fulfil their
tasks.
15.
Rec. 5
(5) There is agreement among
(5) There is agreement among
(5) There is agreement among
Technical group 20141028
regulatory bodies at international
regulatory bodies at international
regulatory bodies at international
(5) There is agreement among
level that weaknesses in corporate
level that weaknesses in corporate
level that weaknesses in corporate
regulatory bodies at international
governance in a number of financial
governance in a number of
governance in a number of
level that weaknesses in corporate
institutions, including the absence of
financial institutions, including the
financial institutions, including the
governance in a number of
effective checks and balances within
absence of effective checks and
absence of effective checks and
financial institutions, including the
them, have been a contributory
balances within them, have been a
balances within them, have been a
absence of effective checks and
factor to the financial crisis.
contributory factor to the financial
contributory factor to the financial
balances within them, have been a
Excessive and imprudent risk taking
crisis. Excessive and imprudent risk
crisis. Excessive and imprudent risk
contributory factor to the financial
may lead to the failure of individual
taking may lead to the failure of
taking may lead to the failure of
crisis. Excessive and imprudent risk
financial institutions and systemic
individual financial institutions and
individual financial institutions and
taking may lead to the failure of
problems in Member States and
systemic problems in Member
systemic problems in Member
individual financial institutions and
globally. Incorrect conduct of firms
States and globally. Incorrect
States and globally. Incorrect
systemic problems in Member
providing services to clients may
conduct of firms providing services
conduct of firms providing services
States and globally. Incorrect
lead to investor detriment and loss
to clients may lead to investor
to clients may lead to investor
conduct of firms providing services
of investor confidence. In order to
detriment and loss of investor
detriment and loss of investor
to clients may lead to investor
address the potentially detrimental
confidence. In order to address the
confidence. In order to address the
detriment and loss of investor
effect of these weaknesses in
potentially detrimental effect of
potentially detrimental effect of
confidence. In order to address the
corporate governance arrangements,
these weaknesses in corporate
these weaknesses in corporate
potentially detrimental effect of
the provisions of this Directive
governance arrangements, the
governance arrangements, the
these weaknesses in corporate
should be supplemented by more
provisions of this Directive should
provisions of this Directive should
governance arrangements, the
detailed principles and minimum
be supplemented by more detailed
be supplemented by more detailed
provisions of this Directive should
standards. These principles and
principles and minimum standards.
principles and minimum standards.
be supplemented by more detailed
standards should apply taking into
These principles and standards
These principles and standards
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account the nature, scale and
should apply taking into account
should apply taking into account
principles and minimum standards.
complexity of investment firms.
the nature, scale and complexity of
the nature, scale and complexity of
These principles and standards
investment firms.
investment firms.
Notwithstanding
should apply taking into account
the responsibilities of shareholders
the nature, scale and complexity of
to ensure that boards carry out
investment firms.
their responsibilities appropriately,
the measures involved should
include limits on the number of
NOTE: Last part of EP text is
directorships that directors of
included in recital 39
financial institutions should hold.
Those measures should be applied
in a way which takes account of
the demands of effectively
managing such institutions, while
also allowing, where appropriate,
the directors of such firms to
continue in particular to act as
directors of not-for-profit
organisations in accordance with
corporate social responsibility.
16.
Rec. 6
(6) The High Level Group on
(6) The High Level Group on
(6) The High Level Group on
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Financial Supervision in the
Financial Supervision in the
Financial Supervision in the
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European Union invited the
European Union invited the
European Union invited the
(6) The High Level Group on
European Union to develop a more
European Union to develop a more
European Union to develop a more
Financial Supervision in the
harmonised set of financial
harmonised set of financial
harmonised set of financial
European Union invited the
regulation. In the context of the
regulation. In the context of the
regulation. In the context of the
European Union to develop a more
future European supervision
future European supervision
future European supervision
harmonised set of financial
architecture, the European Council
architecture, the European Council
architecture, the European Council
regulation. In the context of the
of 18 and 19 June 2009 also stressed
of 18 and 19 June 2009 also
of 18 and 19 June 2009 also
future European supervision
the need to establish a European
stressed the need to establish a
stressed the need to establish a
architecture, the European Council
single rule book applicable to all
European single rule book
European single rule book
of 18 and 19 June 2009 also
financial institutions in the Single
applicable to all financial
applicable to all financial
stressed the need to establish a
Market.
institutions in the Single Market.
institutions in the Single Market.
European single rule book
applicable to all financial
institutions in the Single Market.
17.
Rec. 7
(7) In the light of the above,
(7) In the light of the above,
(7) In the light of the above,
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Directive 2004/39/EC is now partly
Directive 2004/39/EC is now partly
Directive 2004/39/EC is now partly
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recast as this new Directive and
recast as this new Directive and
recast as this new Directive and
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partly replaced by Regulation (EU)
partly replaced by Regulation (EU)
partly replaced by Regulation (EU)
(7) In the light of the above,
No …/… (MiFIR). Together, both
No …/… (MiFIR). Together, both
No …/…
[MiFIR
]. Together, both
Directive 2004/39/EC is now partly
legal instruments should form the
legal instruments should form the
legal instruments should form the
recast as this new Directive and
legal framework governing the
legal framework governing the
legal framework governing the
partly replaced by Regulation (EU)
requirements applicable to
requirements applicable to
requirements applicable to
No …/…
[MiFIR
]. Together, both
investment firms, regulated markets,
investment firms, regulated
investment firms, regulated
legal instruments should form the
data reporting services providers
markets, data reporting services
markets, data reporting services
legal framework governing the
and third country firms providing
providers and third country firms
providers and
third-country firms
requirements applicable to
investment services or activities in
providing investment services or
providing investment services or
investment firms, regulated
the Union. This Directive should
activities in the Union. This
activities in the
European Union.
markets, data reporting services
therefore be read together with the
Directive should therefore be read
This Directive should therefore be
providers and
third-country firms
Regulation. This Directive should
together with the Regulation. This
read together with the Regulation.
providing investment services or
contain the provisions governing the
Directive should contain the
This Directive should contain the
activities in the
European Union.
authorisation of the business, the
provisions governing the
provisions governing the
This Directive should therefore be
acquisition of qualifying holding,
authorisation of the business, the
authorisation of the business, the
read together with the Regulation.
the exercise of the freedom of
acquisition of qualifying holding,
acquisition of qualifying holding,
This Directive should contain the
establishment and of the freedom to
the exercise of the freedom of
the exercise of the freedom of
provisions governing the
provide services, the operating
establishment and of the freedom to
establishment and of the freedom to
authorisation of the business, the
conditions for investment firms to
provide services, the operating
provide services, the operating
acquisition of qualifying holding,
ensure investor protection, the
conditions for investment firms to
conditions for investment firms to
the exercise of the freedom of
powers of supervisory authorities of
ensure investor protection, the
ensure investor protection, the
establishment and of the freedom to
home and host Member States, the
powers of supervisory authorities of
powers of supervisory authorities of
provide services, the operating
sanctioning regime. Since the main
Home and Host Member States and
home and host Member States, the
conditions for investment firms to
objective and subject-matter of this
the sanctioning regime. Since the
sanctioning regime. Since the main
ensure investor protection, the
proposal is to harmonise national
main objective and subject-matter
objective and subject-matter of this
powers of supervisory authorities of
provisions concerning the
of this proposal is to harmonise
proposal is to harmonise national
home and host Member States and
mentioned areas, the proposal
national provisions concerning the
provisions concerning the areas
the sanctioning regime. Since the
should be based on Article 53(1)
mentioned areas, the proposal
referred to, the proposal should be
main objective and subject-matter
TFEU. The form of a Directive is
should be based on Article 53(1)
based on Article 53(1)
of the Treaty
of this proposal is to harmonise
appropriate in order to enable the
TFEU. The form of a Directive is
on the Functioning of the European
national provisions concerning the
implementing provisions in the
appropriate in order to enable the
Union (TFEU). The form of a
areas
referred to, the proposal
areas covered by this Directive,
implementing provisions in the
Directive is appropriate in order to
should be based on Article 53(1)
of
when necessary, to be adjusted to
areas covered by this Directive,
enable the implementing provisions
the Treaty on the Functioning of the
any existing specificities of the
when necessary, to be adjusted to
in the areas covered by this
European Union (TFEU). The form
particular market and legal system
any existing specificities of the
Directive, when necessary, to be
of a Directive is appropriate in
in each Member State.
particular market and legal system
adjusted to any existing
order to enable the implementing
in each Member State.
specificities of the particular market
provisions in the areas covered by
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and legal system in each Member
this Directive, when necessary, to
State.
be adjusted to any existing
specificities of the particular market
and legal system in each Member
State.
18.
Rec. 8
(8) It is appropriate to include in the
(8) It is appropriate to include in
(8) It is appropriate to include in
Technical group 20141028
list of financial instruments certain
the list of financial instruments
the list of financial instruments
(8) It is appropriate to include in
commodity derivatives and others
certain commodity derivatives and
▌commodity derivatives and others
the list of financial instruments
which are constituted and traded in
others which are constituted and
which are constituted and traded in
▌commodity derivatives and others
such a manner as to give rise to
traded in such a manner as to give
such a manner as to give rise to
which are constituted and traded in
regulatory issues comparable to
rise to regulatory issues comparable
regulatory issues comparable to
such a manner as to give rise to
traditional financial instruments.
to traditional financial instruments.
traditional financial instruments.
regulatory issues comparable to
Contracts of insurance in respect
traditional financial instruments.
of activities of classes set out in
Annex I of Directive 2009/138/EC
of the European Parliament and
of the Council on the taking-up
and pursuit of business of
Insurance and Reinsurance
(Solvency II)18 if entered into with
an insurance undertaking,
reinsurance undertaking, third-
country insurance undertaking or
third-country reinsurance
undertaking, are not derivatives or
derivative contracts for the
purposes of this Directive.
18a
Technical group 20140128
Addition below “except for those
already regulated under REMIT”
and time period corrected to align
to political agreement on Articles.
Trilogue 20140114: Agreed to
include Pres. non-paper on Annex
18 OJ L 335, 17.12.2009, p. 1.
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IC6 with modifications/additions
(8a) The scope of financial
instruments will include
physically settled energy
contracts traded on an OTF,
except for those already
regulated under REMIT. Several
measures have been taken to
mitigate the impact of such an
inclusion on firms trading these
products. These firms are today
exempted from own funds
requirements under Regulation
(EU) No 575/2013 [Capital
Requirements regulation] and
this issue will be the subject of a
review before end of 2017 under
Article 493(1) of the Capital
Requirements regulation. These
contracts being financial
instruments, financial markets
legislation requirements would
apply from the onset, thus
position limits, transaction
reporting and market abuse
requirements would apply as
from the entry into application of
MiFID/R. However a phase in of
42 months is foreseen for the
application of the clearing
obligation and the margining
requirements set out in
Regulation (EU) No 648/2012
(EMIR).
(8b) The limitation of the scope
concerning commodity
derivatives traded on an OTF
and physically settled should be
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limited to avoid a loophole that
may lead to regulatory arbitrage.
It is therefore necessary to
foresee a delegated act to further
specify the meaning of “must be
physically settled” taking into
account at least the creation of an
enforceable and binding
obligation to physically deliver,
which cannot be unwound and
with no right to cash settle or
offset transactions except in the
case of force majeure, default or
other bona fide inability to
perform.
19.
Rec. 9
(9) A range of fraudulent practices
(9) A range of fraudulent practices
(9) A range of fraudulent practices
Technical group 20140128
have occurred in spot secondary
have occurred in spot secondary
have occurred in spot secondary
(9) A range of fraudulent practices
markets in emission allowances
markets in emission allowances
markets in emission allowances
have occurred in spot secondary
(EUA) which could undermine trust
(EUA) which could undermine trust
(
EUAs) which could undermine
markets in emission allowances
in the emissions trading schemes,
in the emissions trading schemes,
trust in the emissions trading
(EUA) which could undermine trust
set up by Directive 2003/87/EC, and
set up by Directive 2003/87/EC,
schemes, set up by Directive
in the emissions trading schemes,
measures are being taken to
and measures are being taken to
2003/87/EC
of the European
set up by Directive 2003/87/EC,
of
strengthen the system of EUA
strengthen the system of EUA
Parliament and of the Council of 13
the European Parliament and of the
registries and conditions for opening
registries and conditions for
October 2003 establishing a
Council of 13 October 2003
an account to trade EUAs. In order
opening an account to trade EUAs.
scheme for greenhouse gas
establishing a scheme for
to reinforce the integrity and
In order to reinforce the integrity
emissions allowance trading within
greenhouse gas emissions
safeguard the efficient functioning
and safeguard the efficient
the Community19, and measures are
allowance trading within the
of those markets, including
functioning of those markets,
being taken to strengthen the
Community20, and measures are
comprehensive supervision of
including comprehensive
system of EUA registries and
being taken to strengthen the
trading activity, it is appropriate to
supervision of trading activity, it is
conditions for opening an account
system of EUA registries and
complement measures taken under
appropriate to complement
to trade EUAs. In order to reinforce
conditions for opening an account
Directive 2003/87/EC by bringing
measures taken under Directive
the integrity and safeguard the
to trade EUAs. In order to reinforce
emission allowances fully into the
2003/87/EC by bringing emission
efficient functioning of those
the integrity and safeguard the
scope of this Directive and of
allowances fully into the scope of
markets, including comprehensive
efficient functioning of those
Regulation ----/-- [Market Abuse
this Directive and of Regulation ----
supervision of trading activity, it is
19 OJ L 275, 25.10.2003, p. 32.
20 OJ L 275, 25.10.2003, p. 32.
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Regulation], by classifying them as
/-- [Market Abuse Regulation], by
appropriate to complement
markets, including comprehensive
financial instruments.
classifying them as financial
measures taken under Directive
supervision of trading activity, it is
instruments.
2003/87/EC by bringing emission
appropriate to complement
allowances fully into the scope of
measures taken under Directive
this Directive and of Regulation
2003/87/EC by bringing emission
(EU) No .../...[
MAR]▌. By contrast
allowances fully into the scope of
it is appropriate to clarify that spot
this Directive and of Regulation ----
foreign exchange transactions are
/-- [Market Abuse Regulation], by
outside the scope of the Directive
classifying them as financial
even though currency derivatives
instruments.
are included.
Technical group 20140128:
EP requested addition of following
text. Left open.
(9a) It is appropriate to clarify that
spot foreign exchange transactions
are outside the scope of the
Directive even though currency
derivatives are included.
Technical group 20140131
Note: in a spirit of compromise, EP
Negotiating Team no longer insists
on recital 9a
20.
Rec. 10
(10) The purpose of this Directive is
(10) The purpose of this Directive
(10) The purpose of this Directive
Agreed silence procedure
to cover undertakings the regular
is to cover undertakings the regular
is to cover undertakings the regular
20131008
occupation or business of which is
occupation or business of which is
occupation or business of which is
(10) The purpose of this Directive
to provide investment services
to provide investment services
to provide investment services
is to cover undertakings the regular
and/or perform investment activities
and/or perform investment
and/or perform investment
occupation or business of which is
on a professional basis. Its scope
activities on a professional basis. Its
activities on a professional basis. Its
to provide investment services
should not therefore cover any
scope should not therefore cover
scope should not therefore cover
and/or perform investment
person with a different professional
any person with a different
any person with a different
activities on a professional basis. Its
activity.
professional activity.
professional activity.
scope should not therefore cover
any person with a different
professional activity.
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21.
Rec. 11
(11) It is necessary to establish a
(11) It is necessary to establish a
(11) It is necessary to establish a
Agreed silence procedure
comprehensive regulatory regime
comprehensive regulatory regime
comprehensive regulatory regime
20131008
governing the execution of
governing the execution of
governing the execution of
(11) It is necessary to establish a
transactions in financial instruments
transactions in financial
transactions in financial
comprehensive regulatory regime
irrespective of the trading methods
instruments irrespective of the
instruments irrespective of the
governing the execution of
used to conclude those transactions
trading methods used to conclude
trading methods used to conclude
transactions in financial
so as to ensure a high quality of
those transactions so as to ensure a
those transactions so as to ensure a
instruments irrespective of the
execution of investor transactions
high quality of execution of
high quality of execution of
trading methods used to conclude
and to uphold the integrity and
investor transactions and to uphold
investor transactions and to uphold
those transactions so as to ensure a
overall efficiency of the financial
the integrity and overall efficiency
the integrity and overall efficiency
high quality of execution of
system. A coherent and risk-
of the financial system. A coherent
of the financial system. A coherent
investor transactions and to uphold
sensitive framework for regulating
and risk-sensitive framework for
and risk-sensitive framework for
the integrity and overall efficiency
the main types of order-execution
regulating the main types of order-
regulating the main types of order-
of the financial system. A coherent
arrangement currently active in the
execution arrangement currently
execution arrangement currently
and risk-sensitive framework for
European financial marketplace
active in the European financial
active in the European financial
regulating the main types of order-
should be provided for. It is
marketplace should be provided
marketplace should be provided
execution arrangement currently
necessary to recognise the
for. It is necessary to recognise the
for. It is necessary to recognise the
active in the European financial
emergence of a new generation of
emergence of a new generation of
emergence of a new generation of
marketplace should be provided
organised trading systems alongside
organised trading systems
organised trading systems
for. It is necessary to recognise the
regulated markets which should be
alongside regulated markets which
alongside regulated markets which
emergence of a new generation of
subjected to obligations designed to
should be subjected to obligations
should be subjected to obligations
organised trading systems
preserve the efficient and orderly
designed to preserve the efficient
designed to preserve the efficient
alongside regulated markets which
functioning of financial markets.
and orderly functioning of financial
and orderly functioning of financial
should be subjected to obligations
markets.
markets
and to ensure that such
designed to preserve the efficient
organised trading systems do not
and orderly functioning of financial
benefit from regulatory loopholes.
markets
and to ensure that such
organised trading systems do not
benefit from regulatory loopholes.
22.
Rec. 12
(12) All trading venues, namely
(12) All trading venues, namely
(12) All trading venues, namely
Technical group 20140128
regulated markets, MTFs, and
regulated markets, MTFs
, and
regulated markets,
multilateral
(12) All trading venues, namely
OTFs, should lay down transparent
OTFs, should lay down transparent
trading facilities (MTFs), and
regulated markets, MTFs, and
rules governing access to the
and non-discriminatory rules
organised trading facilities (OTFs),
OTFs should lay down transparent
facility. However, while regulated
governing access to the facility.
should lay down transparent rules
and non discriminatory rules
markets and MTFs should continue
[…]
governing access to the facility.
governing access to the facility.
to be subject to highly similar
However, while regulated markets
However, while regulated markets
requirements regarding whom they
and MTFs should continue to be
and MTFs should continue to be
may admit as members or
subject to ▌similar requirements
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participants, OTFs should be able to
regarding whom they may admit as
subject to ▌similar requirements
determine and restrict access based
members or participants, OTFs
regarding whom they may admit as
inter alia on the role and obligations
should be able to determine and
members or participants, OTFs
which their operators have in
restrict access based inter alia on
should be able to determine and
relation to their clients.
the role and obligations which
they
restrict access based inter alia on
have in relation to their clients.
the role and obligations which they
Trading venues should be able to
have in relation to their clients. In
allow users to specify the type of
this regard, trading venues should
order flow that their orders
be able to specify parameters
interact with prior to their orders
governing the system such as
entering the system provided this is
minimum latency provided this is
done in an open and transparent
done in an open and transparent
manner and does not involve
manner and does not involve
discrimination by the platform
discrimination by the platform
operator.
operator.
22a
Technical group 20140116
.
See row 103 MiFIR
Place of recital to be reviewed
(12a) A central counterparty
(CCP) is defined in Regulation
(EU) No 648/2012 as a legal
person that interposes itself
between the counterparties to the
contracts traded on one or more
financial markets, becoming the
buyer to every seller and the
seller to every buyer. CCPs are
not [should not be] covered by
the term OTF as defined in this
Directive.
23.
Rec.
(12a) Persons having access to
Technical group 20140128
12a
regulated markets or MTFs are
(12b) Persons having access to
(new)
called members or participants.
regulated markets or MTFs are
Both terms may be used
called members or participants.
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interchangeably. These terms do
Both terms may be used
not include users who only access
interchangeably. These terms do
the trading venues via direct
not include users who only access
electronic access.
the trading venues via direct
electronic access.
24.
Rec. 13
(13) An investment firm executing
[…]
(13) ▌Systematic internalisers
Technical group 20140128
client orders against own
should be defined as investment
Alignment with definitions in Art
proprietary capital should be
firms which, on an organised,
2.1(3) MIFIR
deemed a systematic internaliser,
regular and systematic basis, deal
unless the transactions are carried
on own account by executing client
(13) Systematic internalisers should
out outside regulated markets,
orders outside a regulated market,
be defined as investment firms
MTFs and OTFs on an occasional,
an MTF or an OTF
in a bilateral
which, on an organised,
frequent,
ad hoc and irregular basis.
system. In order to ensure the
systematic and
substantial basis,
Systematic internalisers should be
objective and effective application
deal on own account by executing
defined as investment firms which,
of this definition to investment
client orders outside a regulated
on an organised, frequent and
firms, any bilateral trading carried
market, an MTF or an OTF. In
systematic basis, deal on own
out with clients should be relevant
order to ensure the objective and
account by executing client orders
and quantitative criteria should
effective application of this
outside a regulated market, an MTF
complement the qualitative criteria
definition to investment firms, any
or an OTF. In order to ensure the
for the identification of investment
bilateral trading carried out with
objective and effective application
firms required to register as
clients should be relevant and
of this definition to investment
systematic internalisers, laid down
quantitative
criteria should
firms, any bilateral trading carried
in Article 21 of Commission
complement the qualitative
out with clients should be relevant
Regulation
(EC) No 1287/2006
of
criteria be developed for the
and quantitative criteria should
10 August 2006 implementing
identification of investment firms
complement the qualitative criteria
Directive 2004/39/EC
of the
required to register as systematic
for the identification of investment
European Parliament and of the
internalisers, laid down in Article
firms required to register as
Council as regards recordkeeping
21 of Commission Regulation No
systematic internalisers, laid down
obligations for investment firms,
1287/2006 implementing Directive
in Article 21 of Commission
transaction reporting, market
2004/39/EC.
Regulation No 1287/2006
transparency, admission of
While trading venues are facilities
implementing Directive
financial instruments to trading,
in which multiple third-party
2004/39/EC. While an OTF is any
and defined terms for the purposes
buying and selling interests interact
system or facility in which multiple
of that Directive21. While
trading
in the system, a systematic
third party buying and selling
venues are facilities in which
internaliser should not be allowed
interests interact in the system, a
multiple third-party buying and
21 OJ L 241, 2.9.2006, p. 1.
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systematic internaliser should not be
selling interests interact in the
to bring together third-party buying
allowed to bring together third party
system, a systematic internaliser
and selling interests in functionally
buying and selling interests.
should not be allowed to bring
the same way as a trading venue.
together third-party buying and
Technical group 20140206
selling interests
in functionally the
same way as a trading venue.
Changes above at the request of the
Presidency
25.
Rec. 14
(14) Persons administering their
(14) Persons administering their
(14) Persons administering their
Technical group 20140128
own assets and undertakings, who
own assets and undertakings, who
own assets and undertakings, who
[Note: exemption relating to
do not provide investment services
do not provide investment services
do not provide investment services
ancillary activity in relation to
and/or perform investment activities
and/or perform investment
and/or perform investment
commodity derivatives etc
other than dealing on own account
activities other than dealing on own
activities other than dealing on own
addressed in next row]
should not be covered by the scope
account in financial instruments
account should not be covered by
of this Directive unless they are
which are not commodity
the scope of this Directive unless
(14) Persons administering their
market makers , members or
derivatives, emission allowances or
they are market makers, members
own assets and undertakings, who
participants of a regulated market or
derivatives thereof, should not be
or participants of a regulated
do not provide investment services
MTF or they execute orders from
covered by the scope of this
market or
an MTF, or they execute
and/or perform investment
clients by dealing on own account .
Directive unless they are market
orders from clients by dealing on
activities other than dealing on own
By way of exception, persons who
makers, apply a high frequency
own account. By way of exception,
account
in financial instruments
deal on own account in financial
algorithmic trading technique or
persons who deal on own account
which are not commodity
instruments as members or
deal on own account by executing
in financial instruments as members
derivatives, emission allowances
participants of a regulated market or
client orders.
or participants of a regulated
or derivatives thereof, should not
MTF, including as market makers in
market or
an MTF, including as
be covered by the scope of this
relation to commodity derivatives,
market makers in relation to
Directive unless they are market
emission allowances, or derivatives
commodity derivatives, emission
makers, members or participants of
thereof, as an ancillary activity to
allowances, or derivatives thereof,
a regulated market or an MTF or
their main business, which on a
as an ancillary activity to their main
have direct electronic access to a
group basis is neither the provision
business, which on a group basis is
trading venue, apply a high
of investment services within the
neither the provision of investment
frequency algorithmic trading
meaning of this Directive nor of
services within the meaning of this
technique, , or deal on own account
banking services within the meaning
Directive nor of banking services
when executing client orders.
of Directive 2006/48/EC, should not
within the meaning of Directive
be covered by the scope of this
2006/48/EC of the European
Directive. Technical criteria for
Parliament and of the Council of 14
when an activity is ancillary to such
June 2006 relating to the taking up
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a main business should be clarified
and pursuit of the business of credit
in delegated acts. [Rest moved to
institutions22, should not be covered
rows 28 and 29]
by the scope of this Directive.
Technical criteria for when an
activity is ancillary to such a main
business should be clarified in
regulatory technical standards,
taking into account the criteria
specified in this Directive which
should include the scale of the
activity and the extent to which it
reduces risks arising from the
main business. [Rest moved to
Council recitals 14c and 14d
below]
25a
Technical group 20140128
.
Moved and adapted from former
recital 88
(14a) The communiqué of G20
finance ministers and central bank
governors of 15 April 2011 states
that participants on commodity
derivatives markets should be
subject to appropriate regulation
and supervision and therefore
certain exemptions from MiFID I
should be modified.
26.
Rec.
(14a) Persons who deal on own
Technical group 20140128
14a
account, including […] market
Note for lawyer-linguists: use
(new)
makers
, in […] commodity
“dealing on own account when
derivatives, emission allowances
executing client orders”
and derivatives thereof, should not
throughout, cf. row 187 MiFID
be covered by the scope of this
22 OJ L 177, 30.6.2006, p. 1.
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Directive
, provided that this
(14a) Persons who deal on own
activity is an ancillary activity to
account, including […] market
their main business, which on a
makers, in commodity derivatives,
group basis is neither the provision
emission allowances and
of investment services within the
derivatives thereof, or who provide
meaning of this Directive nor of
investment services in commodity
banking services within the
derivatives or emission allowances
meaning of Directive 2006/48/EC,
or derivatives thereof to the
and the persons do not deal on own
customers or suppliers of their main
account by executing client orders
business should not be covered by
and do not apply a high frequency
the scope of this Directive,
algorithmic trading technique.
provided that this activity is an
Technical criteria for when an
ancillary activity to their main
activity is ancillary to such a main
business, which on a group basis is
business should be clarified in
neither the provision of investment
regulatory technical standards,
services within the meaning of this
taking into account the criteria
Directive nor of banking services
specified in Article 2(4). These
within the meaning of Directive
criteria should ensure that non-
2006/48/EC,
nor market making
financial firms dealing in financial
in commodity derivatives, and the
instruments in a disproportionate
persons do not deal on own account
manner compared with the level of
when executing client orders and
investment in the main business are
do not apply a high frequency
covered by the scope of this
algorithmic trading technique.
Directive. In doing so, these criteria
Technical criteria for when an
should take into consideration,
activity is ancillary to such a main
inter-alia, the capital employed for
business should be clarified in
carrying out the ancillary activity in
regulatory technical standards,
absolute terms; the capital
taking into account the criteria
employed for carrying out the
specified in Article 2(4). These
ancillary activity relative to the
criteria should ensure that non-
capital employed for carrying out
financial firms dealing in financial
the main business; the size of their
instruments in a disproportionate
trading activity in financial
manner compared with the level of
instruments in absolute terms; and
investment in the main business are
the size of their trading activity
covered by the scope of this
compared to the overall market
Directive. In doing so, these criteria
trading activity in that asset class.
should take at least into
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The activities that are deemed to be
consideration, the need for ancillary
objectively measurable as reducing
activities to constitute a minority of
risks directly related to the
activities at group level and the size
commercial activity or treasury
of their trading activity compared
financing activity and intragroup
to the overall market trading
transactions should be considered
activity in that asset class. It is
in a consistent way with the
appropriate that where the
Regulation (EU) No 648/2012 of
obligation to provide liquidity on a
the European Parliament and of the
venue is required by regulatory
Council of 4 July 2012 on OTC
authorities in accordance with
derivatives transactions, central
Union or national laws, regulations
counterparties and trade
and administrative provisions or by
repositories.
trading venues the transactions
entered into to meet such an
obligation are excluded in the
assessment of whether the activity
is ancillary.
(14b) For the purposes of this
Directive and MiFIR, which
regulate both OTC and exchange
traded derivatives, activities that
are deemed to be objectively
measurable as reducing risks
directly related to the commercial
activity or treasury financing
activity and intragroup transactions
should be considered in a consistent
way with the Regulation (EU) No
648/2012 of the European
Parliament and of the Council of 4
July 2012 on OTC derivatives
transactions, central counterparties
and trade repositories.
27.
Rec.
(14b) Persons providing investment
Technical group 20140128
14b
services in commodity derivatives
[...]
(new)
or emission allowances or
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derivatives thereof to the customers
or suppliers of their main business
as an ancillary activity to their main
business, should not be covered by
the scope of this directive, provided
that the persons do not apply a high
frequency algorithmic trading
technique. Such services can only
be considered to be ancillary to
one's main business when the
derivatives involved serve to cover
the customer against risk relating to
commodity prices resulting from
non-financial contracts the person
and the customer are both party to.
27a
Rec.
(14ba) (new) Persons that deal in
Technical group 20140128
14ba
commodity derivatives, emission
(14ba)
Persons that deal in
(new)
allowance and derivatives thereof
commodity derivatives, emission
may also deal in other financial
allowance and derivatives thereof
instruments as part of their
may also deal in other financial
commercial treasury risk
instruments as part of their
management activities to protect
commercial treasury risk
themselves against risks, such as
management activities to protect
exchange rate risks. Therefore, it is
themselves against risks, such as
important to clarify that exemptions
exchange rate risks. Therefore, it is
apply cumulatively. For example,
important to clarify that exemptions
the exemption at Article 2(1)(i) can
apply cumulatively. For example,
be used in conjunction with the
the exemption at Article 2(1)(i) can
exemption at Article 2(1)(d).
be used in conjunction with the
However, in order to avoid any
exemption at Article 2(1)(d).
potential misuse of exemptions,
However, in order to avoid any
market makers, persons dealing on
potential misuse of exemptions,
own account by executing client
market makers, persons dealing on
orders or applying a high frequency
own account by executing client
algorithmic trading technique in
orders or applying a high frequency
financial instruments other than
algorithmic trading technique in
commodity derivatives, emission
financial instruments other than
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allowances or derivatives thereof,
commodity derivatives, emission
are covered by the scope of this
allowances or derivatives thereof,
Directive and cannot benefit from
are covered by the scope of this
other exemptions.
Directive and cannot benefit from
other exemptions.
28.
Rec.
[Moved from row 25]
(14c) Dealing on own account by
Dealing on own account by
Agreed silence procedure
14c
executing client orders should
executing client orders should
20131008
Dealing on own account by
(new)
include firms executing orders from
include firms executing orders from
executing client orders should
[Lawyer linguists to determine
different clients by matching them
different clients by matching them
include firms executing orders from
whether separate recital or part of
on a matched principal basis (back
on a matched principal basis (back-
different clients by matching them
previous recital, once decided.
to back trading), which should be
to-back trading), which should be
on a matched principal basis (back
Wording "when executing" should
regarded as acting as principals and
regarded as acting as principals and
to back trading), which should be
stay aligned to wording in row 187]
should be subject to the provisions
should be subject to the provisions
regarded as acting as principals and
of this Directive covering both the
of this Directive covering both the
should be subject to the provisions
execution of orders on behalf of
execution of orders on behalf of
of this Directive covering both the
Dealing on own account when
clients and dealing on own account.
clients and dealing on own account.
execution of orders on behalf of
executing client orders should
clients and dealing on own account.
include firms executing orders from
different clients by matching them
on a matched principal basis (back-
to-back trading), which should be
regarded as acting as principals and
should be subject to the provisions
of this Directive covering both the
execution of orders on behalf of
clients and dealing on own account.
29.
Rec.
[Moved from row 25]
(14d) The execution of orders in
The execution of orders in financial
Agreed silence procedure
14d
financial instruments as an ancillary
instruments as an ancillary activity
20131008
The execution of orders in financial
(new)
activity between two persons whose
between two persons whose main
instruments as an ancillary activity
[Lawyer linguists to determine
main business, on a group basis, is
business, on a group basis, is
between two persons whose main
whether separate recital or part of
neither the provision of investment
neither the provision of investment
business, on a group basis, is neither
previous recital, once decided]
services within the meaning of this
services within the meaning of this
the provision of investment services
Directive nor of banking services
Directive nor of banking services
within the meaning of this Directive
within the meaning of Directive
within the meaning of Directive
nor of banking services within the
The execution of orders in financial
2006/48/EC should not be
2006/48/EC should not be
meaning of Directive 2006/48/EC
instruments as an ancillary activity
considered as dealing on own
considered as dealing on own
should not be considered as dealing
between two persons whose main
account by executing client orders.
account by executing client orders.
on own account by executing client
business, on a group basis, is
neither the provision of investment
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orders.
services within the meaning of this
Directive nor of banking services
within the meaning of Directive
2006/48/EC should not be
considered as dealing on own
account by executing client orders.
30.
Rec. 15
(15) References in the text to
(15) References in the text to
(15) References in the text to
Agreed silence procedure
persons should be understood as
persons should be understood as
persons should be understood as
20131008
including both natural and legal
including both natural and legal
including both natural and legal
(15) References in the text to
persons.
persons.
persons.
persons should be understood as
including both natural and legal
persons.
31.
Rec. 16
(16) Insurance or assurance
(16) Insurance or assurance
(16) Insurance or assurance
Technical group 20140128
undertakings the activities of which
undertakings the activities of which
undertakings the activities of which
T: align with the political decision
are subject to appropriate
are subject to appropriate
are subject to appropriate
on the inclusion of insurance
monitoring by the competent
monitoring by the competent
monitoring by the competent
products.
prudential-supervision authorities
prudential-supervision authorities
prudential-supervision authorities
and which are subject to
Directive
and which are subject to Directive
and which are subject to Directive
(16) Insurance or assurance
2009/138/EC of the European
2009/138/EC of the European
2009/138/EC // should be excluded
undertakings the activities of which
Parliament and of the Council of 25
Parliament and of the Council of 25
except for certain provisions
are subject to appropriate
November 2009 on the taking-up
November 2009 on the taking-up
relating to insurance products
monitoring by the competent
and pursuit of the business of
and pursuit of the business of
used as investment vehicles.
prudential-supervision authorities
Insurance and Reinsurance
Insurance and Reinsurance
Investments are often sold to
and which are subject to Directive
(Solvency II)23 should be excluded.
(Solvency II)6 should be excluded
clients in the form of insurance
2009/138/EC of the European
from the scope of this Directive
contracts as an alternative to or
Parliament and of the Council of 25
when carrying on the activities
substitute for financial
November 2009 on the taking-up
referred to in that Directive.
instruments regulated under this
and pursuit of the business of
Directive. To deliver consistent
Insurance and Reinsurance
protection for retail clients, it is
(Solvency II)6 should be excluded
important that investments under
from the scope of this Directive
insurance contracts are subject to
when carrying on the activities
the same conduct of business
referred to in that Directive.
standards, in particular those
23 [please add OJ reference]
6 [please add OJ reference]
6 [please add OJ reference]
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relating to managing conflicts of
interest, restrictions on
inducements, and rules on
ensuring the suitability of advice
or appropriateness of non-advised
sales. The investor protection and
conflicts of interest requirements
in this Directive should therefore
be applied equally to those
investments packaged under
insurance contracts and
coordination should be ensured
between this Directive and other
relevant law including Directive
2002/92/EC of the European
Parliament and of the Council of 9
December 2002 on insurance
mediation24.
32.
Rec. 17
(17) Persons who do not provide
(17) Persons who do not provide
(17) Persons who do not provide
Agreed
silence
procedure
services for third parties but whose
services for third parties but whose
services for third parties but whose
20131008
business consists in providing
business consists in providing
business consists in providing
(17) Persons who do not provide
investment services solely for their
investment services solely for their
investment services solely for their
services for third parties but whose
parent undertakings, for their
parent undertakings, for their
parent undertakings, for their
business consists in providing
subsidiaries, or for other
subsidiaries, or for other
subsidiaries, or for other
investment services solely for their
subsidiaries of their parent
subsidiaries of their parent
subsidiaries of their parent
parent undertakings, for their
undertakings should not be covered
undertakings should not be covered
undertakings should not be covered
subsidiaries, or for other
by this Directive.
by this Directive.
by this Directive.
subsidiaries of their parent
undertakings should not be covered
by this Directive.
33.
Rec.
(17a) Some local energy utilities
Technical group 20140128
17a
bundle and out-source their trading
Council recitals (17a) and (17b)
(new)
activities for hedging commercial
merged.
risks to non-consolidated
subsidiaries. These joint venture
companies do not provide any other
24 OJ L 9, 15.1.2003, p. 3.
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services and perform exactly the
(17a) Some local energy utilities
same function as persons referred
and some operators of industrial
to in Recital 17. In order to ensure a
installations covered by the EU
level playing field, joint venture
Emissions Trading Scheme bundle
companies jointly held by local
and out-source their trading
energy utilities who do not provide
activities for hedging commercial
any services other than investment
risks to non-consolidated
services for those local energy
subsidiaries. These joint venture
utilities and provided that these
companies do not provide any other
local energy utilities will be exempt
services and perform exactly the
under Article 2(1)(i) should they
same function as persons referred
carry out these investment services
to in Recital 17. In order to ensure a
themselves, should also be
level playing field, joint venture
excluded from the scope of this
companies jointly held by local
Directive.
energy utilities
or operators
falling within Article 3(f) of
Directive 2003/87/EC who do not
provide any services other than
investment services for those local
energy utilities
or operators
falling within Article 3(f) of
Directive 2003/87/EC and
provided that these local energy
utilities
or operators falling
within Article 3(f) of Directive
2003/87/EC will be exempt under
Article 2(1)(i) should they carry out
these investment services
themselves,
may also be excluded
from the scope of this Directive.
However to ensure the appropriate
safeguards are in place and that
investors are adequately protected
Member States that choose to
exempt such joint ventures should
subject them to requirements at
least analogous to the ones laid
down in this Directive, notably in
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the phase of authorisation, in the
assessment of their reputation and
experience and of the suitability of
any shareholders, in the review of
the conditions for initial
authorisation and on-going
supervision as well as on conduct
of business obligations
.
Technical group 20140206
Reference to operators falling
within Article 3(f) of Directive
2003/87/EC inserted above, at the
request of the Presidency (cf. row
224a in table 2A)
34.
Rec.
(17b) (new) Some operators of
Technical group 20140128
17b
industrial installations covered by
[...]
(new)
the EU Emissions Trading Scheme
bundle and outsource their trading
Merged with previous recital
activities for hedging commercial
risks to non-consolidated
subsidiaries. These joint venture
companies do not provide any other
services and perform exactly the
same function as persons referred
to in Recital 17. In order to ensure a
level playing field, joint venture
companies jointly held by operators
of industrial installations covered
by the EU Emissions Trading
Scheme who do not provide any
services other than investment
services for those operators of
industrial installations and provided
that these operators of industrial
installations will be exempt under
Article 2(1)(i) should they carry out
these investment services them-
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selves, should also be excluded
from the scope of this Directive.
35.
Rec. 18
(18) Persons who provide
(18) Persons who provide
(18) Persons who provide
Agreed silence procedure
investment services only on an
investment services only on an
investment services only on an
20131008
incidental basis in the course of
incidental basis in the course of
incidental basis in the course of
(18) Persons who provide
professional activity should also be
professional activity should also be
professional activity should also be
investment services only on an
excluded from the scope of this
excluded from the scope of this
excluded from the scope of this
incidental basis in the course of
Directive, provided that activity is
Directive, provided that activity is
Directive, provided that activity is
professional activity should also be
regulated and the relevant rules do
regulated and the relevant rules do
regulated and the relevant rules do
excluded from the scope of this
not prohibit the provision, on an
not prohibit the provision, on an
not prohibit the provision, on an
Directive, provided that activity is
incidental basis, of investment
incidental basis, of investment
incidental basis, of investment
regulated and the relevant rules do
services.
services.
services.
not prohibit the provision, on an
incidental basis, of investment
services.
36.
Rec. 19
(19) Persons who provide
(19)
Persons
who
provide
(19) Persons who provide
Agreed silence procedure
investment services consisting
investment
services
consisting
investment services consisting
20131008
exclusively in the administration of
exclusively in the administration of
exclusively in the administration of
(19) Persons who provide
employee-participation schemes and
employee-participation
schemes
employee-participation schemes
investment services consisting
who therefore do not provide
and who therefore do not provide
and who therefore do not provide
exclusively in the administration of
investment services for third parties
investment services for third parties
investment services for third parties
employee-participation schemes
should not be covered by this
should not be covered by this
should not be covered by this
and who therefore do not provide
Directive.
Directive.
Directive.
investment services for third parties
should not be covered by this
Directive.
37.
Rec. 20
(20) It is necessary to exclude from
(20) It is necessary to exclude from
(20) It is necessary to exclude from
Agreed silence procedure
the scope of this Directive central
the scope of this Directive central
the scope of this Directive central
20131008
banks and other bodies performing
banks and other bodies performing
banks and other bodies performing
(20) It is necessary to exclude from
similar functions as well as public
similar functions as well as public
similar functions as well as public
the scope of this Directive central
bodies charged with or intervening
bodies charged with or intervening
bodies charged with or intervening
banks and other bodies performing
in the management of the public
in the management of the public
in the management of the public
similar functions as well as public
debt, which concept covers the
debt, which concept covers the
debt, which concept covers the
bodies charged with or intervening
investment thereof, with the
investment
thereof,
with
the
investment thereof, with the
in the management of the public
exception of bodies that are partly
exception of bodies that are partly
exception of bodies that are partly
debt, which concept covers the
or wholly State-owned the role of
or wholly State-owned the role of
or wholly State-owned the role of
investment thereof, with the
which is commercial or linked to the
which is commercial or linked to
which is commercial or linked to
exception of bodies that are partly
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acquisition of holdings.
the acquisition of holdings.
the acquisition of holdings.
or wholly State-owned the role of
which is commercial or linked to
the acquisition of holdings.
38.
Rec. 21
(21) In order to clarify the regime of
(21) In order to clarify the regime
(21) In order to clarify the regime
Technical group 20140128
exemptions for the European
of exemptions for the European
of exemptions for the European
Technical group proposal
System of Central Banks, other
System of Central Banks, other
System of Central Banks
(ESCB),
national bodies performing similar
national bodies performing similar
other national bodies performing
T: align bracketed part to decision
functions and the bodies intervening
functions and the bodies
similar functions and the bodies
on row 191.
in the management of public debt, it
intervening in the management of
intervening in the management of
(21) In order to clarify the regime
is appropriate to limit such
public debt, it is appropriate to limit
public debt, it is appropriate to limit
of exemptions for the European
exemptions to the bodies and
such exemptions to the bodies and
such exemptions to the bodies and
System of Central Banks
(ESCB),
institutions performing their
institutions performing their
institutions performing their
other national bodies performing
functions in accordance with the law
functions in accordance with the
functions in accordance with the
similar functions and the bodies
of one Member State or in
law of one Member State or in
law of one Member State or in
intervening in the management of
accordance with the legislation of
accordance with the legislation of
accordance with the
European
public debt, it is appropriate to limit
the Union as well as to international
the Union as well as to international
Union
law as well as to
such exemptions to the bodies and
bodies of which one or more
bodies of which one or more
international bodies of which one
institutions performing their
Member States are members.
Member States are members.
or more Member States are
functions in accordance with the
members.
law of one Member State or in
accordance with the
European
Union
law as well as to
international bodies
[of which
two
one or more Member States are
members
] which have the purpose
of mobilising funding and
providing financial assistance to
the benefit of their members that
are experiencing or threatened by
severe financing problems, such
as the European Stability
Mechanism.
39.
Rec. 22
(22) It is necessary to exclude from
(22) It is necessary to exclude from
(22) It is necessary to exclude from
Agreed
silence
procedure
the scope of this Directive collective
the scope of this Directive
the scope of this Directive
20131008
investment undertakings and
collective investment undertakings
collective investment undertakings
(22) It is necessary to exclude from
pension funds whether or not
and pension funds whether or not
and pension funds whether or not
the scope of this Directive
coordinated at Union level, and
coordinated at Union level, and the
coordinated at
European Union
collective investment undertakings
the depositaries or managers of such
depositaries or managers of such
level, and the depositaries or
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undertakings, since they are subject
undertakings, since they are subject
managers of such undertakings,
and pension funds whether or not
to specific rules directly adapted to
to specific rules directly adapted to
since they are subject to specific
coordinated at
European Union
their activities.
their activities.
rules directly adapted to their
level, and the depositaries or
activities.
managers of such undertakings,
since they are subject to specific
rules directly adapted to their
activities.
40.
Rec.
(22a) It is necessary to exclude
(22a) For a well-functioning
Technical group 20140128
22a
from the scope of this Directive
internal market in electricity and
(22a) It is necessary to exclude
(new)
transmission system operators as
natural gas, and for the carrying
from the scope of this Directive
defined in Article 2(4) of Directive
out of the tasks of transmission
transmission system operators as
2009/72/EC or Article 2(4) of
system operators (TSOs) under
defined in Article 2(4) of Directive
Directive 2009/73/EC when
Directive 2009/72/EC25, Directive
2009/72/EC or Article 2(4) of
carrying out their tasks under those
2009/73/EC26, Regulation (EC) No
Directive 2009/73/EC when
Directives or Regulation (EC)
714/200927, Regulation (EC) No
carrying out their tasks under those
714/2009 or Regulation (EC)
715/200928, or network codes and
Directives or Regulation (EC)
715/2009 or network codes or
guidelines adopted pursuant to
714/2009 or Regulation (EC)
guidelines adopted pursuant to
those Regulations, it is necessary
715/2009 or network codes or
those Regulations. According to the
that TSOs are exempted when
guidelines adopted pursuant to
aforementioned legislation,
issuing transmission rights, in the
those Regulations. According to the
transmission system operators have
form of either physical
aforementioned legislation,
specific obligations and
transmission rights or financial
transmission system operators have
responsibilities, are subject to
transmission rights, and when
specific obligations and
specific certification and are
providing a platform for secondary
responsibilities, are subject to
supervised by sector specific
trading.
specific certification and are
competent authorities.
supervised by sector specific
Transmission system operators
competent authorities.
should also benefit from such an
Transmission system operators
exemption in cases where they use
should also benefit from such an
other persons acting as service
exemption in cases where they use
providers on their behalf to carry
other persons acting as service
out their task under the afore
providers on their behalf to carry
mentioned Directives or
25 Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009, concerning common rules for the internal market in electricity (OJ L 198, 30.7.2009, p. 20).
26 Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009, concerning common rules for the internal market in natural gas (OJ L 211, 14.8.2009, p. 94).
27
Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity (OJ L 211,
14.8.2009, p. 15).
28 Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks (OJ L 211, 14.8.2009, p. 36).
Page 28 of 143
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Regulations or network codes or
out their task under the afore
guidelines adopted pursuant to
mentioned Directives or
those Regulations. Transmission
Regulations or network codes or
system operators should not be able
guidelines adopted pursuant to
to benefit from such an exemption
those Regulations. Transmission
when providing investment services
system operators should not be able
or activities in financial
to benefit from such an exemption
instruments, including when
when providing investment services
operating a platform for secondary
or activities in financial
trading in financial transmission
instruments, including when
rights.
operating a platform for secondary
trading in financial transmission
rights.
41.
Rec. 23
(23) In order to benefit from the
(23) In order to benefit from the
(23) In order to benefit from the
Agreed
silence
procedure
exemptions from this Directive the
exemptions from this Directive the
exemptions from this Directive the
20131008
person concerned should comply on
person concerned should comply on
person concerned should comply on
(23) In order to benefit from the
a continuous basis with the
a continuous basis with the
a continuous basis with the
exemptions from this Directive the
conditions laid down for such
conditions laid down for such
conditions laid down for such
person concerned should comply on
exemptions. In particular, if a
exemptions. In particular, if a
exemptions. In particular, if a
a continuous basis with the
person provides investment services
person provides investment
person provides investment
conditions laid down for such
or performs investment activities
services or performs investment
services or performs investment
exemptions. In particular, if a
and is exempted from this Directive
activities and is exempted from this
activities and is exempted from this
person provides investment
because such services or activities
Directive because such services or
Directive because such services or
services or performs investment
are ancillary to his main business,
activities are ancillary to his main
activities are ancillary to his main
activities and is exempted from this
when considered on a group basis,
business, when considered on a
business, when considered on a
Directive because such services or
he should no longer be covered by
group basis, he should no longer be
group basis, he should no longer be
activities are ancillary to his main
the exemption related to ancillary
covered by the exemption related to
covered by the exemption related to
business, when considered on a
services where the provision of
ancillary services where the
ancillary services where the
group basis, he should no longer be
those services or activities ceases to
provision of those services or
provision of those services or
covered by the exemption related to
be ancillary to his main business.
activities ceases to be ancillary to
activities ceases to be ancillary to
ancillary services where the
his main business.
his main business.
provision of those services or
activities ceases to be ancillary to
his main business.
42.
Rec. 24
(24) Persons who provide the
(24) Persons who provide the
(24) Persons who provide the
Agreed
silence
procedure
investment services and/or perform
investment services and/or perform
investment services and/or perform
20131008
investment activities covered by this
investment activities covered by
investment activities covered by
(24) Persons who provide the
Directive should be subject to
this Directive should be subject to
this Directive should be subject to
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authorisation by their home Member
authorisation by their Home
authorisation by their home
investment services and/or perform
States in order to protect investors
Member States in order to protect
Member States in order to protect
investment activities covered by
and the stability of the financial
investors and the stability of the
investors and the stability of the
this Directive should be subject to
system.
financial system.
financial system.
authorisation by their home
Member States in order to protect
investors and the stability of the
financial system.
43.
Rec. 25
(25) Credit institutions that are
(25) Credit institutions that are
(25) Credit institutions that are
Agreed
silence
procedure
authorised under Directive
authorised under Directive
authorised under Directive
20131008
2006/48/EC of the European
2006/48/EC of the European
2006/48/EC of the European
(25) Credit institutions that are
Parliament and of the Council of 14
Parliament and of the Council of 14
Parliament and of the Council of 14
authorised under Directive
June 2006 relating to the taking up
June 2006 relating to the taking up
June 2006 relating to the taking up
2006/48/EC of the European
and pursuit of the business of credit
and pursuit of the business of credit
and pursuit of the business of credit
Parliament and of the Council of 14
institutions (recast)29 should not
institutions (recast) 7 should not
institutions (recast)30 should not
June 2006 relating to the taking up
need another authorisation under
need another authorisation under
need another authorisation under
and pursuit of the business of credit
this Directive in order to provide
this Directive in order to provide
this Directive in order to provide
institutions (recast)31 should not
investment services or perform
investment services or perform
investment services or perform
need another authorisation under
investment activities. When a credit
investment activities. When a credit
investment activities. When a credit
this Directive in order to provide
institution decides to provide
institution decides to provide
institution decides to provide
investment services or perform
investment services or perform
investment services or perform
investment services or perform
investment activities. When a credit
investment activities the competent
investment activities
, the competent
investment activities the competent
institution decides to provide
authorities, before granting an
authorities, before granting an
authorities, before granting an
investment services or perform
authorisation, should verify that it
authorisation, should verify that it
authorisation, should verify that it
investment activities the competent
complies with the relevant
complies with the relevant
complies with the relevant
authorities, before granting an
provisions of this Directive.
provisions of this Directive.
provisions of this Directive.
authorisation, should verify that it
complies with the relevant
provisions of this Directive.
44.
Rec. 26
(26) Structured deposits have
(26) Structured deposits have
(26) Structured deposits have
Agreed
silence
procedure
emerged as a form of investment
emerged as a form of investment
emerged as a form of investment
20131008
product but are are not covered
product but are not covered under
product but are not covered under
(26) Structured deposits have
under any legislation for the
any legislation for the protection of
any
legislative act for the
emerged as a form of investment
protection of investors at Union
investors at Union level, while
protection of investors at
European
product but are not covered under
29 OJ L Ö 177, 30.6.2006, p.1. Õ 126, 26.5.2000, p. 1. Directive as last amended by Directive 2002/87/EC.
7 OJ L 177, 30.6.2006, p.1.
30 OJ L Ö 177, 30.6.2006, p.1. Õ 126, 26.5.2000, p. 1. Directive as last amended by Directive 2002/87/EC.
31 OJ L Ö 177, 30.6.2006, p.1. Õ 126, 26.5.2000, p. 1. Directive as last amended by Directive 2002/87/EC.
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level, while other structured
other structured investments are
Union level, while other structured
any
legislative act for the
investments are covered by such
covered by such legislation. It is
investments are covered by such
protection of investors at
European
legislation. It is appropriate
appropriate therefore to strengthen
legislative acts. It is appropriate
Union level, while other structured
therefore to strengthen the
the confidence of investors and to
therefore to strengthen the
investments are covered by such
confidence of investors and to make
make regulatory treatment
confidence of investors and to
legislative acts. It is appropriate
regulatory treatment concerning the
concerning the distribution of
make regulatory treatment
therefore to strengthen the
distribution of different packaged
different packaged retail investment
concerning the distribution of
confidence of investors and to
retail investment products more
products more uniform in order to
different packaged retail investment
make regulatory treatment
uniform in order to ensure an
ensure an adequate level of investor
products more uniform in order to
concerning the distribution of
adequate level of investor protection
protection across the Union. For
ensure an adequate level of investor
different packaged retail investment
across the Union. For this reason, it
this reason, it is appropriate to
protection across the
European
products more uniform in order to
is appropriate to include in the
include in the scope of this
Union. For this reason, it is
ensure an adequate level of investor
scope of this Directive structured
Directive structured deposits. In
appropriate to include in the scope
protection across the
European
deposits. In this regard, it is
this regard, it is necessary to clarify
of this Directive structured
Union. For this reason, it is
necessary to clarify that since
that since structured deposits are a
deposits. In this regard, it is
appropriate to include in the scope
structured deposits are a form of
form of investment product, they do
necessary to clarify that since
of this Directive structured
investment product, they do not
not include deposits linked solely to
structured deposits are a form of
deposits. In this regard, it is
include deposits linked solely to
interest rates, such as Euribor or
investment product, they do not
necessary to clarify that since
interest rates, such as Euribor or
Libor, regardless of whether or not
include
simple deposits linked
structured deposits are a form of
Libor, regardless of whether or not
the interest rates are predetermined,
solely to interest rates, such as
investment product, they do not
the interest rates are predetermined,
or are fixed or variable.
Euribor or Libor, regardless of
include deposits linked solely to
or are fixed or variable.
whether or not the interest rates are
interest rates, such as Euribor or
predetermined, or
whether they are
Libor, regardless of whether or not
fixed or variable.
Such simple
the interest rates are predetermined,
deposits are therefore outside the
or
whether they are fixed or
scope of this Directive.
variable.
Such deposits are
therefore outside the scope of this
Directive.
Technical group 13 11
Revised suggestion following
objection in Council ("simple"
deleted above)
45.
Rec.
(26a) The application of this
Technical group 20140128
26a
Directive to investment firms when
(26a) The application of this
(new)
selling or advising clients in
Directive to investment firms and
relation to structured deposits,
credit institutions when selling or
should be understood as when
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acting as intermediaries for these
advising clients in relation to
products issued by credit
structured deposits, should be
institutions that can take deposits
understood as when acting as
according to Directive 2006/48/EC
intermediaries for these products
of the European Parliament and of
issued by credit institutions that can
the Council of 14 June 2006
take deposits according to Directive
relating to the taking up and pursuit
2013/36/EU. 006/48/EC of the
of the business of credit
European Parliament and of the
institutions.
Council of 14 June 2006 relating to
the taking up and pursuit of the
business of credit institutions.
Note: updated reference to CRD IV
46.
Rec.
(26b) Central Securities
Technical group 20140128
26b
Depositaries [CSDs] are
(26b) Central Securities
(new)
systemically important institutions
Depositaries [CSDs] are
for financial markets that ensure the
systemically important institutions
initial recording of securities, the
for financial markets that ensure the
maintenance of the accounts
initial recording of securities, the
containing the securities issued and
maintenance of the accounts
the settlement of virtually all trades
containing the securities issued and
of securities. For this reason, CSDs
the settlement of virtually all trades
should be specifically regulated
of securities. CSDs
are specifically
under Union legislation and should
regulated under Union legislation
be subject to that specific
and
are subject to that specific
legislation. However, CSDs might,
legislation for, in particular, their
in addition to the core services
authorisation and
certain operating
[referred to in Section A of the
conditions. However, CSDs might,
Annex to the CSDR], provide
in addition to the core services
investment services and activities
[referred to in Section A
and B of
which are regulated under this
the Annex to the [CSDR], provide
Directive. In order to ensure that
investment services and activities
any entities providing investment
which are regulated under this
services and activities are subject to
Directive. In order to ensure that
the same regulatory framework, it
any entities providing investment
is appropriate to ensure that CSDs
services and activities are subject to
are subject to the requirements of
the same regulatory framework, it
this Directive concerning their
is appropriate to ensure that CSDs
Page 32 of 143
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internal organisation and the
are subject to the requirements of
operating conditions as well as
this Directive , except those relating
Regulation [MiFIR] when they
to authorisation and
certain
provide investment services or
operating conditions, when they
perform investment activities.
provide investment services or
However, it is deemed more
perform investment activities in
appropriate that these requirements
addition to the services listed in
are defined in the forthcoming CSD
Section A and B of the Annex to
legislation, rather than setting them
Regulation EU No. xx/xxx[CSDR].
ex-ante in this Directive and
However, these requirements are
Regulation [MiFIR]. Union
defined in the
[CSD
R]
legislation regulating CSD [CSDR]
NOTE: above text to be used if
should thus identify the provisions
CSDR has entered into force by the
of this Directive and of Regulation
time MiFID enters into force.
[MiFIR] which should apply to
Otherwise return to Council’s way
CSDs providing investment
of referring to CSDR.
services and activities.
47.
Rec.
(26c) Persons exempted under
Technical group 20140128
26c
Articles 2(1)(a), (d), (h) and (i)
-
(new)
should comply with the provisions
referred to in Articles 17(1) to (5)
when they are members or
participants of regulated markets
and MTFs.
48.
Rec. 27
(27) In order to strengthen the
(27) In order to strengthen the
(27) In order to strengthen the
Technical group 20140128
protection of investors in the Union,
protection of investors in the
protection of investors in the
(27) In order to strengthen the
it is appropriate to limit the
Union, it is appropriate to limit the
European Union, it is appropriate
protection of investors in the
conditions under which Member
conditions under which Member
to limit the conditions under which
Union, it is appropriate to limit the
States can exclude the application of
States may exclude the application
Member States can exclude the
conditions under which Member
this Directive to persons providing
of this Directive to persons
application of this Directive to
States may exclude the application
investment services to clients who,
providing investment services to
persons providing investment
of this Directive to persons
as a result, are not protected under
clients who, as a result, are not
services to clients who, as a result,
providing investment services to
the Directive. In particular, it is
protected under the Directive. In
are not protected under the
clients who, as a result, are not
appropriate to require Member
particular, it is appropriate to
Directive. In particular, it is
protected under the Directive. In
States to apply requirements at least
require Member States to apply
appropriate to require Member
particular, it is appropriate to
analogous to the ones laid down in
requirements at least analogous to
States to apply requirements at least
require Member States to apply
this Directive to those persons,
the ones laid down in this Directive
analogous to
those laid down in this
requirements at least analogous to
Page 33 of 143
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notably in the phase of
to those persons, notably in the
Directive to those persons,
in
the ones laid down in this Directive
authorisation, in the assessment of
phase of authorisation, in the
particular in the phase of
to those persons, notably in the
their reputation and experience and
assessment of their reputation and
authorisation, in the assessment of
phase of authorisation, in the
of the suitability of any
experience and of the suitability of
their reputation and experience and
assessment of their reputation and
shareholders, in the review of the
any shareholders, in the review of
of the suitability of any
experience and of the suitability of
conditions for initial authorisation
the conditions for initial
shareholders, in the review of the
any shareholders, in the review of
and on-going supervision as well as
authorisation and on-going
conditions for initial authorisation
the conditions for initial
on conduct of business obligations.
supervision as well as on conduct
and on-going supervision as well as
authorisation and on-going
of business obligations
. In addition,
on conduct of business obligations.
supervision as well as on conduct
persons excluded from the
of business obligations
. In addition,
application of this Directive should
persons excluded from the
be covered under an investor
application of this Directive should
compensation scheme recognised in
be covered under an investor
accordance with Directive 97/9/EC
compensation scheme recognised in
of the European Parliament and of
accordance with Directive 97/9/EC
the Council of 3 March 1997 on
of the European Parliament and of
investor-compensation schemes8 or
the Council of 3 March 1997 on
professional indemnity insurance
investor-compensation schemes8 or
ensuring equivalent protection to
professional indemnity insurance
their clients in the situations
ensuring equivalent protection to
covered under Directive 97/9/EC.
their clients in the situations
covered under Directive 97/9/EC.
49.
Rec. 28
(28) In cases where an investment
(28) In cases where an investment
(28) In cases where an investment
Agreed
silence
procedure
firm provides one or more
firm provides one or more
firm provides one or more
20131008
investment services not covered by
investment services not covered by
investment services not covered by
(28) In cases where an investment
its authorisation, or performs one or
its authorisation, or performs one or
its authorisation, or performs one or
firm provides one or more
more investment activities not
more investment activities not
more investment activities not
investment services not covered by
covered by its authorisation, on a
covered by its authorisation, on a
covered by its authorisation, on a
its authorisation, or performs one or
non-regular basis it should not need
non-regular basis it should not need
non-regular basis it should not need
more investment activities not
an additional authorisation under
an additional authorisation under
an additional authorisation under
covered by its authorisation, on a
this Directive.
this Directive.
this Directive.
non-regular basis it should not need
an additional authorisation under
this Directive.
50.
Rec. 29
(29) For the purposes of this
(29) For the purposes of this
(29) For the purposes of this
Agreed
silence
procedure
8 OJ L 84, 26.3.1997, p. 22.
8 OJ L 84, 26.3.1997, p. 22.
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Directive, the business of the
Directive, the business of the
Directive, the business of //
20131008
reception and transmission of orders
reception and transmission of
reception and transmission of
(29) For the purposes of this
should also include bringing
orders should also include bringing
orders should also include bringing
Directive, the business of //
together two or more investors
together two or more investors
together two or more investors
reception and transmission of
thereby bringing about a transaction
thereby bringing about a transaction
thereby bringing about a transaction
orders should also include bringing
between those investors.
between those investors.
between those investors.
together two or more investors
thereby bringing about a transaction
between those investors.
51.
Rec. 30
(30) Investment firms and credit
(30) Investment firms and credit
(30) Investment firms and credit
Agreed
silence
procedure
institutions distributing financial
institutions distributing financial
institutions distributing financial
20131008
instruments they issue themselves
instruments they issue themselves
instruments they issue themselves
(30) Investment firms and credit
should be subject to the provisions
should be subject to the provisions
should be subject to the provisions
institutions distributing financial
of this Directive when they provide
of this Directive when they provide
of this Directive when they provide
instruments they issue themselves
investment advice to their clients. In
investment advice to their clients.
investment advice to their clients.
should be subject to the provisions
order to eliminate uncertainty and
In order to eliminate uncertainty
In order to eliminate uncertainty
of this Directive when they provide
strengthen investor protection, it is
and strengthen investor protection,
and strengthen investor protection,
investment advice to their clients.
appropriate to provide for the
it is appropriate to provide for the
it is appropriate to provide for the
In order to eliminate uncertainty
application of this Directive when,
application of this Directive when,
application of this Directive when,
and strengthen investor protection,
in the primary market, investment
in the primary market, investment
in the primary market, investment
it is appropriate to provide for the
firms and credit institutions
firms
and
credit
institutions
firms and credit institutions
application of this Directive when,
distribute financial instruments
distribute
financial
instruments
distribute financial instruments
in the primary market, investment
issued by them without providing
issued by them without providing
issued by them without providing
firms and credit institutions
any advice. For this purpose, the
any advice. For this purpose, the
any advice. For this purpose, the
distribute financial instruments
definition of the service of
definition
of
the
service
of
definition of the service of
issued by them without providing
execution of orders on behalf of
execution of orders on behalf of
execution of orders on behalf of
any advice. For this purpose, the
clients should be extended.
clients should be extended.
clients should be extended.
definition of the service of
execution of orders on behalf of
clients should be extended.
52.
Rec. 31
(31) The principles of mutual
(31) The principles of mutual
(31) The principles of mutual
Agreed silence procedure
recognition and of home Member
recognition and of Home Member
recognition and of home Member
20131008
State supervision require that the
State supervision require that the
State supervision require that the
(31) The principles of mutual
Member States' competent
Member
States'
competent
Member States' competent
recognition and of home Member
authorities should not grant or
authorities should not grant or
authorities should not grant or
State supervision require that the
should withdraw authorisation
should
withdraw
authorisation
should withdraw authorisation
Member States' competent
where factors such as the content of
where factors such as the content of
where factors such as the content of
authorities should not grant or
programmes of operations, the
programmes of operations, the
programmes of operations, the
should withdraw authorisation
Page 35 of 143
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geographical distribution or the
geographical distribution or the
geographical distribution or the
where factors such as the content of
activities actually carried on
activities
actually
carried
on
activities actually carried on
programmes of operations, the
indicate clearly that an investment
indicate clearly that an investment
indicate clearly that an investment
geographical distribution or the
firm has opted for the legal system
firm has opted for the legal system
firm has opted for the legal system
activities actually carried on
of one Member State for the
of one Member State for the
of one Member State for the
indicate clearly that an investment
purpose of evading the stricter
purpose of evading the stricter
purpose of evading the stricter
firm has opted for the legal system
standards in force in another
standards in force in another
standards in force in another
of one Member State for the
Member State within the territory of
Member State within the territory
Member State within the territory
purpose of evading the stricter
which it intends to carry on or does
of which it intends to carry on or
of which it intends to carry on or
standards in force in another
carry on the greater part of its
does carry on the greater part of its
does carry on the greater part of its
Member State within the territory
activities. An investment firm which
activities. An investment firm
activities. An investment firm
of which it intends to carry on or
is a legal person should be
which is a legal person should be
which is a legal person should be
does carry on the greater part of its
authorised in the Member State in
authorised in the Member State in
authorised in the Member State in
activities. An investment firm
which it has its registered office. An
which it has its registered office.
which it has its registered office.
which is a legal person should be
investment firm which is not a legal
An investment firm which is not a
An investment firm which is not a
authorised in the Member State in
person should be authorised in the
legal person should be authorised in
legal person should be authorised in
which it has its registered office.
Member State in which it has its
the Member State in which it has its
the Member State in which it has its
An investment firm which is not a
head office. In addition, Member
head office. In addition, Member
head office. In addition, Member
legal person should be authorised in
States should require that an
States should require that an
States should require that an
the Member State in which it has its
investment firm's head office must
investment firm's head office must
investment firm's head office must
head office. In addition, Member
always be situated in its home
always be situated in its Home
always be situated in its home
States should require that an
Member State and that it actually
Member State and that it actually
Member State and that it actually
investment firm's head office must
operates there.
operates there.
operates there.
always be situated in its home
Member State and that it actually
operates there.
53.
Rec. 32
(32) Directive 2007/44/EC of the
(32) Directive 2007/44/EC of the
(32) Directive 2007/44/EC of the
[note: Council addition corresponds
European Parliament and of the
European Parliament and of the
European Parliament and of the
to identical Council /EP text in
Council of 5 September 2007
Council of 5 September 2007
Council of 5 September 2007
// as
13(1)(1)(b)]
amending Council Directive
amending
Council
Directive
regards procedural rules and
Agreed silence procedure
92/49/EEC and Directives
92/49/EEC
and
Directives
evaluation criteria for the prudential
20131008
2002/83/EC, 2004/39/EC,
2002/83/EC,
2004/39/EC,
assessment of acquisitions and
2005/68/EC and 2006/48/EC as
2005/68/EC and 2006/48/EC as
increase of holdings in the financial
[part in [ ] to be included or not
regards procedural rules and
regards
procedural
rules
and
sector36 has provided for detailed
depending on political decision on
evaluation criteria for the prudential
evaluation criteria for the prudential
criteria for the prudential
Article 13(1)]
assessment of acquisitions and
assessment of acquisitions and
assessment of proposed
Technical group 20140128
Page 36 of 143
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Compromise
increase of holdings in the financial
increase of holdings in the financial
acquisitions in an investment firm
Aligned to decision on Art 13(1) not
sector32 has provided for detailed
sector
89 has provided for detailed
and for a procedure for their
to include part in [].
criteria for the prudential
criteria
for
the
prudential
application. In order to provide
assessment of proposed acquisitions
assessment
of
proposed
legal certainty, clarity and
(32) Directive 2007/44/EC of the
in an investment firm and for a
acquisitions in an investment firm
predictability with regard to the
European Parliament and of the
procedure for their application. In
and for a procedure for their
assessment process, as well as to
Council of 5 September 2007
// as
order to provide legal certainty,
application. In order to provide
the result thereof, it is appropriate
regards procedural rules and
clarity and predictability with regard
legal
certainty,
clarity
and
to confirm the criteria and the
evaluation criteria for the prudential
to the assessment process, as well as
predictability with regard to the
process of prudential assessment
assessment of acquisitions and
to the result thereof, it is appropriate
assessment process, as well as to
laid down in Directive 2007/44/EC.
increase of holdings in the financial
to confirm the criteria and the
the result thereof, it is appropriate
In particular, competent authorities
sector40 has provided for detailed
process of prudential assessment
to confirm the criteria and the
should appraise the suitability of
criteria for the prudential
laid down in Directive 2007/44/EC.
process of prudential assessment
the proposed acquirer and the
assessment of proposed
In particular, competent authorities
laid down in Directive 2007/44/EC.
financial soundness of the proposed
acquisitions in an investment firm
should appraise the suitability of the
acquisition against all of the
and for a procedure for their
In particular, competent authorities
proposed acquirer and the financial
following criteria: the reputation of
application. In order to provide
should appraise the suitability of
soundness of the proposed
the proposed acquirer; the
legal certainty, clarity and
the proposed acquirer and the
acquisition against all of the
reputation and experience of any
predictability with regard to the
financial soundness of the proposed
following criteria: the reputation of
person who will direct the business
assessment process, as well as to
acquisition against all of the
the proposed acquirer; the
of the investment firm; the financial
the result thereof, it is appropriate
following criteria: the reputation of
reputation and experience of any
soundness of the proposed acquirer;
to confirm the criteria and the
the
proposed
acquirer;
the
person who will direct the business
whether the investment firm will be
process of prudential assessment
reputation and experience of any
of the investment firm; the financial
able to comply with the prudential
laid down in Directive 2007/44/EC.
person who will direct the business
soundness of the proposed acquirer;
requirements based on this
In particular, competent authorities
of the investment firm as a result of
whether the investment firm will be
Directive and
on other directives,
in
should appraise the suitability of
the
proposed
acquisition;
the
able to comply with the prudential
particular on Directives
the proposed acquirer and the
financial soundness of the proposed
requirements based on this Directive
2002/87/EC37 and 2006/49/EC38;
financial soundness of the proposed
acquirer; whether the investment
and other Directives, notably,
acquisition against all of the
whether the acquisition will
firm will be able to comply with the
Directives 2002/87/EC33 and
following criteria: the reputation of
increase conflicts of interests;
prudential requirements based on
2006/49/EC34; whether there are
whether there are reasonable
the proposed acquirer; the
this Directive and other Directives,
reasonable grounds to suspect that
grounds to suspect that money
reputation and experience of any
notably, Directives 2002/87/EC
10
money laundering or terrorist
laundering or terrorist financing
person who will direct the business
and 2006/49/EC
11; whether there
of the investment firm as a result of
36 OJ L 247 , 21/09/2007, p. 1
32 OJ L 247 , 21/09/2007, p. 1
33 Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a
financial conglomerate (OJ L 35, 11.2.2003, p. 1)..
34 Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast) (OJ L 177, 30.6.2006, p. 201).
Page 37 of 143
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financing within the meaning of
are reasonable grounds to suspect
within the meaning of Article 1 of
the proposed acquisition; the
Article 1 of Directive 2005/60/EC35
that money laundering or terrorist
Directive 2005/60/EC39 is being or
financial soundness of the proposed
is being or has been committed or
financing within the meaning of
has been committed or attempted,
acquirer; whether the investment
attempted, or that the proposed
Article
1
of
Directive
or that the proposed acquisition
firm will be able to comply with the
acquisition could increase the risk
2005/60/EC
1112 is being or has been
could increase the risk thereof.
prudential requirements based on
thereof.
committed or attempted, or that the
this Directive and
on other
proposed acquisition could increase
directives,
in particular on
the risk thereof.
Directives 2002/87/EC41 and
2006/49/EC42;
[whether the
acquisition will increase conflicts
of interests;] whether there are
reasonable grounds to suspect that
money laundering or terrorist
financing within the meaning of
Article 1 of Directive 2005/60/EC43
is being or has been committed or
attempted, or that the proposed
acquisition could increase the risk
thereof.
54.
Rec. 33
(33) An investment firm authorised
(33) An investment firm authorised
(33) An investment firm authorised
Agreed silence procedure
in its home Member State should be
in its Home Member State should
in its home Member State should be
20131008
9 OJ L 247, 21/09/2007, p. 1
10
Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a
financial conglomerate (OJ L 35, 11.2.2003, p. 1)..
11 Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast) (OJ L 177, 30.6.2006, p. 201).
37 Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a
financial conglomerate (OJ L 35, 11.2.2003, p. 1)..
38 Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (OJ L 177, 30.6.2006, p. 201).
40 OJ L 247 , 21/09/2007, p. 1
35 Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of financial system for the purpose of money laundering and terrorist financing
(OJ L 309, 25.11.2005, p. 15).
12 Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of financial system for the purpose of money laundering and terrorist financing
(OJ L 309, 25.11.2005, p. 15).
39 Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of financial system for the purpose of money laundering and terrorist financing
(OJ L 309, 25.11.2005, p. 15).
41 Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a
financial conglomerate (OJ L 35, 11.2.2003, p. 1)..
42 Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (OJ L 177, 30.6.2006, p. 201).
43 Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of financial system for the purpose of money laundering and terrorist financing
(OJ L 309, 25.11.2005, p. 15).
Page 38 of 143
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entitled to provide investment
be entitled to provide investment
entitled to provide investment
(33) An investment firm authorised
services or perform investment
services or perform investment
services or perform investment
in its home Member State should be
activities throughout the Union
activities throughout the Union
activities throughout the
European
entitled to provide investment
without the need to seek a separate
without the need to seek a separate
Union without the need to seek a
services or perform investment
authorisation from the competent
authorisation from the competent
separate authorisation from the
activities throughout the
European
authority in the Member State in
authority in the Member State in
competent authority in the Member
Union without the need to seek a
which it wishes to provide such
which it wishes to provide such
State in which it wishes to provide
separate authorisation from the
services or perform such activities.
services or perform such activities.
such services or perform such
competent authority in the Member
activities.
State in which it wishes to provide
such services or perform such
activities.
55.
Rec. 34
(34) Since certain investment firms
(34) Since certain investment firms
(34) Since certain investment firms
Agreed silence procedure
are exempted from certain
are exempted from certain
are exempted from certain
20131008
obligations imposed by Directive
obligations imposed by Directive
obligations imposed by Directive
[Subject to legal-linguistic review.
2006/49/EC of the European
2006/49/EC of the European
2006/49/EC //, they should be
CRD IV reference to be updated
Parliament and of the Council of 14
Parliament and of the Council of 14
obliged to hold either a minimum
(2013/36/EU)]
June 2006 on the capital adequacy
June 2006 on the capital adequacy
amount of capital or professional
of investment firms and credit
of investment firms and credit
indemnity insurance or a
(34) Since certain investment firms
institutions (recast)44, they should be
institutions (recast)
13, they should
combination of both. The
are exempted from certain
obliged to hold either a minimum
be obliged to hold either a
adjustments of the amounts of that
obligations imposed by Directive
amount of capital or professional
minimum amount of capital or
insurance should take into account
2006/49/EC //, they should be
indemnity insurance or a
professional indemnity insurance or
adjustments made in the framework
obliged to hold either a minimum
combination of both. The
a combination of both. The
of Directive 2002/92/EC //. This
amount of capital or professional
adjustments of the amounts of that
adjustments of the amounts of that
particular treatment for the
indemnity insurance or a
insurance should take into account
insurance should take into account
purposes of capital adequacy
combination of both. The
adjustments made in the framework
adjustments made in the framework
should be without prejudice to any
adjustments of the amounts of that
of Directive 2002/92/EC of the
of Directive 2002/92/EC of the
decisions regarding the appropriate
insurance should take into account
European Parliament and of the
European Parliament and of the
treatment of these firms under
adjustments made in the framework
Council of 9 December 2002 on
Council of 9 December 2002 on
future changes to
European Union
of Directive 2002/92/EC //. This
insurance mediation45. This
insurance mediation
14. This
law on capital adequacy.
particular treatment for the
particular treatment for the purposes
particular treatment for the
purposes of capital adequacy
of capital adequacy should be
purposes of capital adequacy
should be without prejudice to any
without prejudice to any decisions
should be without prejudice to any
decisions regarding the appropriate
44 OJ L 141, 11.6.1993 Ö 177, 30.6.2006, p. 201 Õ , p. 1. Directive as last amended by Directive 2002/87/EC.
45 OJ L 9, 15.1.2003, p. 3.
13 OJ L 177, 30.6.2006, p. 201.
14 OJ L 9, 15.1.2003, p. 3.
Page 39 of 143
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Compromise
regarding the appropriate treatment
decisions regarding the appropriate
treatment of these firms under
of these firms under future changes
treatment of these firms under
future changes to
European Union
to Union legislation on capital
future changes to Union legislation
law on capital adequacy.
adequacy.
on capital adequacy.
56.
Rec. 35
(35) Since the scope of prudential
(35) Since the scope of prudential
(35) Since the scope of prudential
Technical group 20140128
regulation should be limited to those
regulation should be limited to
regulation should be limited to
T: align to decision on scope of
entities which, by virtue of running
those entities which, by virtue of
those entities which, by virtue of
exemptions once taken
a trading book on a professional
running a trading book on a
running a trading book on a
basis, represent a source of
professional basis, represent a
professional basis, represent a
(35) Since the scope of prudential
counterparty risk to other market
source of counterparty risk to other
source of counterparty risk to other
regulation should be limited to
participants, entities which deal on
market participants, entities which
market participants, entities which
those entities which, by virtue of
own account in financial
deal on own account in financial
deal on own account in financial
running a trading book on a
instruments, including those
instruments, including when on an
instruments, including those
professional basis, represent a
commodity derivatives covered by
ancillary basis to their main
commodity derivatives covered by
source of counterparty risk to other
this Directive, as well as those that
business those commodity
this Directive, as well as those that
market participants, entities which
provide investment services in
derivatives covered by this
provide investment services in
deal on own account in financial
commodity derivatives to the clients
Directive, as well as those that
commodity derivatives to the
instruments, including when on an
of their main business on an
provide investment services in
clients of their main business on an
ancillary basis to their main
ancillary basis to their main
commodity derivatives to the
ancillary basis to their main
business those commodity
business when considered on a
clients of their main business on an
business when considered on a
derivatives covered by this
group basis, provided that this main
ancillary basis to their main
group basis, provided that this main
Directive, as well as those that
business is not the provision of
business when considered on a
business is not the provision of
provide investment services in
investment services within the
group basis, provided that this main
investment services within the
commodity derivatives to the
meaning of this Directive, should be
business is not the provision of
meaning of this Directive, should
clients of their main business on an
excluded from the scope of this
investment services within the
be excluded from the scope of this
ancillary basis to their main
Directive.
meaning of this Directive, should
Directive.
business when considered on a
be excluded from the scope of this
group basis, provided that this main
Directive.
business is not the provision of
investment services within the
meaning of this Directive, acting as
a credit institution
oras acting as a
market maker in commodity
derivatives, should be excluded
from the scope of this Directive.
Technical group 20140206
Typo corrected above
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57.
Rec. 36
(36) In order to protect an investor's
(36) In order to protect an investor's
(36) In order to protect an investor's
Agreed
silence
procedure
ownership and other similar rights
ownership and other similar rights
ownership and other similar rights
20131008
in respect of securities and his rights
in respect of securities and his
in respect of securities and his
Agreed
silence
procedure
in respect of funds entrusted to a
rights in respect of funds entrusted
rights in respect of funds entrusted
20131008
firm those rights should in particular
to a firm those rights should in
to a firm those rights should in
be kept distinct from those of the
particular be kept distinct from
particular be kept distinct from
(36) In order to protect an investor's
firm. This principle should not,
those of the firm. This principle
those of the firm. This principle
ownership and other similar rights
however, prevent a firm from doing
should not, however, prevent a firm
should not, however, prevent a firm
in respect of securities and his
business in its name but on behalf of
from doing business in its name but
from doing business in its name but
rights in respect of funds entrusted
the investor, where that is required
on behalf of the investor, where
on behalf of the investor, where
to a firm those rights should in
by the very nature of the transaction
that is required by the very nature
that is required by the very nature
particular be kept distinct from
and the investor is in agreement, for
of the transaction and the investor
of the transaction and the investor
those of the firm. This principle
example stock lending.
is in agreement, for example stock
is in agreement, for example stock
should not, however, prevent a firm
lending.
lending.
from doing business in its name but
on behalf of the investor, where
that is required by the very nature
of the transaction and the investor
is in agreement, for example stock
lending.
58.
Rec. 37
(37) The requirements concerning
(37) The requirements concerning
(37) The requirements concerning
Agreed
silence
procedure
the protection of client assets are a
the protection of client assets are a
the protection of client assets are a
20131008
crucial tool for the protection of
crucial tool for the protection of
crucial tool for the protection of
(37) The requirements concerning
clients in the provision of services
clients in the provision of services
clients in the provision of services
the protection of client assets are a
and activities. These requirements
and activities. These requirements
and activities. These requirements
crucial tool for the protection of
can be excluded when full
can be excluded when full
can be excluded when full
clients in the provision of services
ownership of funds and financial
ownership of funds and financial
ownership of funds and financial
and activities. These requirements
instrument is transferred to an
instrument is transferred to an
instrument is transferred to an
can be excluded when full
investment firm to cover any present
investment firm to cover any
investment firm to cover any
ownership of funds and financial
or future, actual or contingent or
present or future, actual or
present or future, actual or
instrument is transferred to an
prospective obligations. This broad
contingent or prospective
contingent or prospective
investment firm to cover any
possibility may create uncertainty
obligations. This broad possibility
obligations. This broad possibility
present or future, actual or
and jeopardise the effectiveness of
may create uncertainty and
may create uncertainty and
contingent or prospective
the requirements concerning the
jeopardise the effectiveness of the
jeopardise the effectiveness of the
obligations. This broad possibility
safeguard of client assets. Thus, at
requirements concerning the
requirements concerning the
may create uncertainty and
least when retail clients' assets are
safeguard of client assets. Thus, at
safeguard of client assets. Thus, at
jeopardise the effectiveness of the
involved, it is appropriate to limit
least when retail clients' assets are
least when retail clients' assets are
requirements concerning the
the possibility of investment firms
involved, it is appropriate to limit
involved, it is appropriate to limit
safeguard of client assets. Thus, at
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to conclude title transfer financial
the possibility of investment firms
the possibility of investment firms
least when retail clients' assets are
collateral arrangements as defined
to conclude title transfer financial
to conclude title transfer financial
involved, it is appropriate to limit
under Directive 2002/47/EC of the
collateral arrangements as defined
collateral arrangements as defined
the possibility of investment firms
European Parliament and of the
under Directive 2002/47/EC of the
under Directive 2002/47/EC of the
to conclude title transfer financial
Council of 6 June 2002 on financial
European Parliament and of the
European Parliament and of the
collateral arrangements as defined
collateral arrangements46, for the
Council of 6 June 2002 on financial
Council of 6 June 2002 on financial
under Directive 2002/47/EC of the
purpose of securing or otherwise
collateral arrangements
15, for the
collateral arrangements47, for the
European Parliament and of the
covering their obligations.
purpose of securing or otherwise
purpose of securing or otherwise
Council of 6 June 2002 on financial
covering their obligations.
covering their obligations.
collateral arrangements48, for the
purpose of securing or otherwise
covering their obligations.
59.
Rec. 38
(38) It is necessary to strengthen the
(38) It is necessary to strengthen
(38) It is necessary to strengthen
Technical group 20140128
role of management bodies of
the role of management bodies of
the role of management bodies of
(38)- It is necessary to strengthen
investment firms in ensuring sound
investment firms in ensuring sound
investment firms in ensuring sound
the role of management bodies of
and prudent management of the
and prudent management of the
and prudent management of the
investment firms,
regulated
firms, the promotion of the integrity
firms, the promotion of the integrity
firms, the promotion of the integrity
markets and data reporting
of the market and the interest of
of the market and the interest of
of the market and the interest of
services providers in ensuring
investors. The management body of
investors. The management body of
investors. In the interests of a
sound and prudent management of
an investment firm should at all
an investment firm should at all
coherent approach to corporate
the firms, the promotion of the
time commit sufficient time and
time commit sufficient time and
governance it is desirable to align
integrity of the market and the
possess adequate knowledge, skills
possess adequate collective
the requirements for investment
interest of investors. The
and experience to be able to
knowledge, skills and experience to
firms as far as possible to those
management body of an investment
understand the business of the
be able to understand the […]
included in Directive .../.../EU
firm,
regulated markets and data
investment firm and its main risk.
investment firm’s activities
[CRD IV] and to ensure that such
reporting services providers
To avoid group thinking and
including the main risks.
requirements are proportionate to
should at all time commit sufficient
facilitate critical challenge,
the nature, scale and complexity of
time and possess adequate
management boards of investment
their business.
To prevent conflicts
collective knowledge, skills and
firms should be sufficiently diverse
of interest an executive member of
experience to be able to understand
as regards age, gender, provenance,
the management body of
the […] investment firm’s
education and professional
investment firms should not also
[institution’s]activities including
background to present a variety of
be an executive member of the
the main risks.
views and experiences. Gender
management body of a trading
balance is of a particular importance
venue but could be a non-
- To avoid group thinking and
46 OJ L 168, 27.6.2002, p. 43.
15 OJ L 168, 27.6.2002, p. 43.
47 OJ L 168, 27.6.2002, p. 43.
48 OJ L 168, 27.6.2002, p. 43.
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to ensure adequate representation of
executive member of such a
facilitate independent opinions
demographical reality.
management body, for example in
and critical challenge,
order to provide user participation
management bodies should
in decision-making. The
therefore be sufficiently diverse
management body of an investment
as regards age, gender,
firm should at all time commit
geographical provenance and
sufficient time and possess
educational and professional
adequate knowledge, skills and
background to present a variety
experience to be able to understand
of views and experiences.
the business of the investment firm
Employee representation in
and its main risk. To avoid group
management bodies could also,
thinking and facilitate critical
by adding a key perspective and
challenge, management boards of
genuine knowledge of the internal
investment firms should be
workings of firms/institutions, be
sufficiently diverse as regards age,
seen as a positive way of
gender, provenance, education and
enhancing diversity. Therefore,
professional background to present
diversity should be one of the
a variety of views and experiences.
criteria for the composition of
Gender balance is of a particular
management bodies. Diversity
importance to ensure adequate
should also be addressed in
representation of demographical
firms’/institutions' recruitment
reality.
Where practiced, employee
policy more generally. Such a
representation in the management
policy should, for instance,
body should also be seen as a
encourage institutions to select
positive way of enhancing
candidates from shortlists
diversity, by adding a key
including both genders.
perspective and genuine
- In the interests of a coherent
knowledge of the internal
approach to corporate governance it
workings of the institution.
is desirable to align the
Furthermore mechanisms are
requirements for investment firms
needed to ensure that members of
as far as possible to those included
management bodies can be held
in Directive
2013/36/EU.
accountable in case of severe mis-
management.
Note:
1. inclusion of reference to
regulated markets and data
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reporting services providers
2. the EP part on the combination
of directorships moved to recital
39.
3. the rest of the inclusions is in
line with recital 60 CRD IV
60.
Rec. 39
(39) In order to have an effective
(39) In order to have an effective
(39) In order to have an effective
Technical group 20140128
oversight and control over the
oversight and control over the
oversight and control over the
(39) In order to have an effective
activities of investment firms, the
activities of investment firms, the
activities of investment firms, the
oversight and control over the
management body should be
management body should be
management body should be
activities of investment firms,
responsible and accountable for the
responsible and accountable for the
responsible and accountable for the
regulated markets and data
overall strategy of the investment
overall strategy of the investment
overall strategy of the investment
reporting services providers, the
firm, taking into account the
firm, taking into account the
firm, taking into account the
management body should be
investment firm's business and risk
investment firm's business and risk
investment firm's business and risk
responsible and accountable for the
profile. The management body
profile. The management body
profile. The management body
overall strategy of the investment
should assume clear responsibilities
should assume clear responsibilities
should assume clear responsibilities
firm, taking into account the
across the business cycle of the
across the business cycle of the
across the business cycle of the
investment firm's business and risk
investment firm, in the areas of the
investment firm, in the areas of the
investment firm, in the areas of the
profile. The management body
identification and definition of the
identification and definition of the
identification and definition of the
should assume clear responsibilities
strategic objectives of the firm, of
strategic objectives
, risk strategy
strategic objectives of the firm, of
across the business cycle of the
the approval of its internal
and internal governance of the firm,
the approval of its internal
investment firm, in the areas of the
organization, including criteria for
of the approval of its internal
organisation, including criteria for
identification and definition of the
selection and training of personnel,
organization, including criteria for
selection and training of personnel,
strategic objectives
, risk strategy
of the definition of the overall
selection and training of personnel,
of the definition of the overall
and internal governance of the firm,
policies governing the provision of
of effective oversight of senior
policies governing the provision of
of the approval of its internal
services and activities, including the
management, of the definition of
services and activities, including
organisation, including criteria for
remuneration of sales staff and the
the overall policies governing the
the remuneration of sales staff and
selection and training of personnel,
approval of new products for
provision of services and activities,
the approval of new products for
of effective oversight of senior
distribution to clients. Periodic
including the remuneration of sales
distribution to clients. Periodic
management, of the definition of
monitoring and assessment of the
staff and the approval of new
monitoring and assessment of the
the overall policies governing the
strategic objectives of investment
products for distribution to clients.
strategic objectives of investment
provision of services and activities,
firms, their internal organization and
firms, their internal
organisation
Periodic monitoring and assessment
including the remuneration of sales
their policies for the provision of
and their policies for the provision
of the strategic objectives of
staff and the approval of new
services and activities should ensure
of services and activities should
investment firms, their internal
products for distribution to clients.
their continuous ability to deliver
ensure their continuous ability to
organization and their policies for
sound and prudent management, in
deliver sound and prudent
Periodic monitoring and assessment
the provision of services and
the interest of the integrity of the
management, in the interest of the
of the strategic objectives of
Page 44 of 143
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markets and the protection of
activities should ensure their
integrity of the markets and the
investment firms, their internal
investors.
continuous ability to deliver sound
protection of investors.
organization and their policies for
and prudent management, in the
the provision of services and
interest of the integrity of the
activities should ensure their
markets and the protection of
continuous ability to deliver sound
investors.
and prudent management, in the
interest of the integrity of the
markets and the protection of
investors.
Combining too high a number of
directorships would preclude a
member of the management body
from spending adequate time on
the performance of that oversight
role. Therefore, it is necessary to
limit the number of directorships
a member of the management
body of an institution may hold at
the same time in different
entities. However, directorships
in organisations which do not
pursue predominantly
commercial objectives, such as
non-profit-making or charitable
organisations, should not be
taken into account for the
purposes of applying such a limit.
- [Note: inclusion in line with EP
amendment in recital 5 and with
recital 58 CRD IV]
61.
Rec.
(39a) Within Member States
Technical group 20140128
39a
different governance structures are
(39a
) Different governance
(new)
used, in most cases a unitary and/or
structures are used
across Member
a dual board structure. The
States. In most cases a unitary
or a
definitions used in the Directive
dual board structure
is used. The
intend to embrace all existing
definitions used in
this Directive
structures without advocating any
Page 45 of 143
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particular structure. They are purely
intend to embrace all existing
functional for the purpose of setting
structures without advocating any
out rules aimed at a particular
particular structure. They are purely
outcome irrespective of the national
functional for the purpose of setting
company law applicable to an
out rules aimed at a particular
institution in each Member State.
outcome irrespective of the national
The definitions should therefore not
company law applicable to an
interfere with the general allocation
institution in each Member State.
of competencies according to the
The definitions should therefore not
national company law.
interfere with the general allocation
of competences according to the
national company law.
Note: minor drafting changes
mirroring similar recital (No 55) in
CRD IV
62.
Rec. 40
(40) The expanding range of
(40) The expanding range of
(40) The expanding range of
Technical group 20140128
activities that many investment
activities that many investment
activities that many investment
(40) The expanding range of
firms undertake simultaneously has
firms undertake simultaneously has
firms undertake simultaneously has
activities that many investment
increased potential for conflicts of
increased potential for conflicts of
increased potential for conflicts of
firms undertake simultaneously has
interest between those different
interest between those different
interest between those different
increased potential for conflicts of
activities and the interests of their
activities and the interests of their
activities and the interests of their
interest between those different
clients. It is therefore necessary to
clients. It is therefore necessary to
clients. It is therefore necessary to
activities and the interests of their
provide for rules to ensure that such
provide for rules to ensure that such
provide for rules to ensure that such
clients. It is therefore necessary to
conflicts do not adversely affect the
conflicts do not adversely affect the
conflicts do not adversely affect the
provide for rules to ensure that such
interests of their clients.
interests of their clients. Firms have
interests of their clients.
conflicts do not adversely affect the
a duty to take effective steps to
interests of their clients. Firms have
identify and manage conflicts of
a duty to take effective steps to
interest and mitigate the potential
identify, and
prevent or manage
impact of these risks as far as
conflicts of interest and mitigate the
possible. Where some residual risk
potential impact of these risks as far
of detriment to the client’s interests
as possible. Where some residual
nonetheless remains, clear
risk of detriment to the client’s
disclosure to the client of the
interests nonetheless remains, clear
general nature and/or sources of
disclosure to the client of the
conflicts of interest to the client and
general nature and/or sources of
the steps taken to mitigate these
conflicts of interest to the client and
risks must be made before
the steps taken to mitigate these
Page 46 of 143
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undertaking business on its behalf.
risks must be made before
undertaking business on its behalf.
63.
Rec. 41
(41) Member States should ensure
(41) Member States are required to
▌
[linked to recitals 43 and 69]
the respect of the right to the
ensure the respect of the right to the
Technical group 20140128
protection of pesonal data in
protection of personal data in
accordance with Directive 95/46/EC
accordance with Directive
[…]
of the European Parliament and of
95/46/EC of the European
the Council of 24 October 1995 on
Parliament and of the Council of 24
the protection of individuals with
October 1995 on the protection of
regard to the processing of personal
individuals with regard to the
data and of the free movement of
processing of personal data and of
such data and Direcetive
the free movement of such data and
2002/58/EC of the European
Directive 2002/58/EC of the
Parliament and of the Council of 12
European Parliament and of the
July 2002 concerning the processing
Council of 12 July 2002 concerning
of personal data and the protection
the processing of personal data and
of privacy in the electronic
the protection of privacy in the
communications sector (Directive
electronic communications sector
on privacy and electronic
(Directive on privacy and electronic
communications)49 which govern
communications) which govern the
the processing of personal data
processing of personal data carried
carried out in application of this
out in application of this Directive.
Directive. Processing of personal
Processing of personal data by
data by ESMA in the application of
ESMA in the application of this
this Directive is subject to
Directive is subject to Regulation
Regulation (EU) No 45/2001 of the
(EU) No 45/2001 of the European
European Parliament and of the
Parliament and of the Council of 18
Council of 18 December 2000 on
December 2000 on the protection
the protection of individuals with
of individuals with regard to the
regard to the processing of personal
processing of personal data by the
data by the Community institutions
Community institutions and bodies
and bodies and on the free
and on the free movement of such
movement of such data50.
data. This protection should notably
49 OJ L 201 , 31.7.2002, p. 37
50 OJ L 8, 12.1.2001, p. 1.
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extend to any transfer of personal
data to third countries and to
telephone and electronic recording
as required under Article 16.
64.
Rec. 42
(42) Commission Directive
(42) Commission Directive
(42) Commission Directive
Trilogue 06 11 / Technical meeting
2006/73/EC of 10 August 2006
2006/73/EC of 10 August 2006
2006/73/EC of 10 August 2006
13 11
implementing Directive 2004/39/EC
implementing Directive
implementing Directive
Addition to third paragraph; rest to
of the European Parliament and of
2004/39/EC of the European
2004/39/EC of the European
be reviewed
the Council as regards
Parliament and of the Council as
Parliament and of the Council as
organisational requirements and
regards organisational requirements
regards organisational requirements
operating conditions for investment
and operating conditions for
and operating conditions for
Orders can be communicated by
firms and defined terms for the
investment firms and defined terms
investment firms and defined terms
these clients through other
purposes of that Directive 51 allows
for the purposes of that Directive
17
for the purposes of that Directive52
channels, however such
Member States to require, in the
allows Member States to require, in
allows Member States to require, in
communications must be made in a
context of organisational
the context of organisational
the context of organisational
durable medium such as mails,
requirements for investment firms,
requirements for investment firms,
requirements for investment firms,
faxes, emails, documentation of
the recording of telephone
the recording of telephone
the recording of telephone
client orders made at meetings.
For
conversations or electronic
conversations or electronic
conversations or electronic
example, the content of relevant
communications involving client
communications involving client
communications involving client
face-to-face conversations with a
orders. Recording of telephone
orders. Recording of telephone
orders. Recording of telephone
client could be recorded by using
conversations or electronic
conversations or electronic
conversations or electronic
written minutes or notes. Such
communications involving client
communications involving client
communications involving client
orders will be considered
orders is compatible with the
orders is compatible with the
orders is compatible with the
equivalent to orders received by
Charter of Fundamental Rights of
Charter of Fundamental Rights of
Charter of Fundamental Rights of
telephone.
the European Union and is justified
the European Union and is justified
the European Union and is justified
in order to strenghten investor
in order to strengthen investor
in order to strengthen investor
protection, to improve market
protection, to improve market
protection, to improve market
Technical group 20131211/1217
surveillance and increase legal
surveillance and increase legal
surveillance and increase legal
Where minutes are taken of face-to-
certainty in the interest of
certainty in the interest of
certainty in the interest of
face conversations with clients
investment firms and their clients.
investment firms and their clients.
investment firms and their clients.
Member States should ensure that
The importance of such records is
The importance of such records is
The importance of such records is
appropriate safeguards are in place
also mentioned in the technical
also mentioned in the technical
also mentioned in the technical
to ensure that the client does not
advice to the European
advice to the European
advice to the // Commission,
lose out as a result of the minutes
Commission, released by the
Commission, released by the
released by the Committee of
inaccurately recording the
51 OJ L 241, 2.9.2006, p. 26.
17 OJ L 241, 2.9.2006, p. 26.
52 OJ L 241, 2.9.2006, p. 26.
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Committee of European Securities
Committee of European Securities
European Securities Regulators on
communication between the parties.
Regulators on 29 July 2010. For
Regulators on 29 July 2010. Such
29 July 2010. For these reasons, it
Such safeguards should not imply
these reasons, it is appropriate to
records should ensure that there is
is appropriate to provide in this
any assumption of liability by the
provide in this Directive for the
evidence to prove the terms of any
Directive for the principles of a
client. [Row 462]
principles of a general regime
orders given by clients and its
general regime concerning the
concerning the recording of
correspondence with transactions
recording of telephone
telephone conversations or
executed by the investment firms,
conversations or electronic
Technical group 20140128
electronic communications
as well as to detect any behaviour
communications involving client
involving client orders.
that may have relevance in terms of
orders.
For communications
market abuse, including when firms
between retail clients and financial
(42) Commission Directive
deal on own account. To this end
institutions it is appropriate to
2006/73/EC of 10 August 2006
records are needed for all
allow the Member States to
implementing Directive
conversations involving a firm’s
recognise instead appropriate
2004/39/EC of the European
representatives when dealing, or
written records of such
Parliament and of the Council as
intending to deal, on own account.
communications for financial
regards organisational requirements
Investment firms shall notify new
institutions established and
and operating conditions for
and existing clients that telephone
branches located within their
investment firms and defined terms
communications or conversations
territory.
for the purposes of that Directive
17
between the investment firms and
allows Member States to require, in
clients that result or may result in
the context of organisational
transactions, will be recorded. This
requirements for investment firms,
notification can be provided once,
the recording of telephone
before the provision of investment
conversations or electronic
services to new and existing clients.
communications involving client
orders. Recording of telephone
Investment firms shall not provide,
conversations or electronic
by phone, investment services and
communications involving client
activities to clients who have not
orders is compatible with the
been notified in advance about the
Charter of Fundamental Rights of
recording of their telephone
the European Union and is justified
communications or conversations,
in order to strengthen investor
where such investment services and
protection, to improve market
activities relate to the reception,
surveillance and increase legal
transmission and execution of client
certainty in the interest of
orders.
investment firms and their clients.
Orders can be communicated by
The importance of such records is
these clients through other
also mentioned in the technical
17 OJ L 241, 2.9.2006, p. 26.
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channel’s, however such
advice to the European
communications must be made in a
Commission, released by the
durable medium such as mails,
Committee of European Securities
faxes, emails, documentation of
Regulators on 29 July 2010. Such
client orders made at meetings.
records should ensure that there is
Such orders will be considered
evidence to prove the terms of any
equivalent to orders received by
orders given by clients and its
telephone.
correspondence with transactions
executed by the investment firms,
To provide legal certainty regarding
as well as to detect any behaviour
the scope of the obligation, it is
that may have relevance in terms of
appropriate to apply it to all
market abuse, including when firms
equipment provided by the firm or
deal on own account. To this end
permitted to be used by the
records are needed for all
investment firm and to require the
conversations involving a firm’s
investment firms to take reasonable
representatives when dealing, or
steps to ensure that no privately-
intending to deal, on own account.
owned equipment is used in
W
here orders
are communicated
relation to transactions. These
by clients through other channels
records shall be available to
than by phone, such
competent authorities in the
communications must be made in a
fulfilment of their supervisory tasks
durable medium such as mails,
and in the performance of
faxes, emails, documentation of
enforcement actions under this
client orders made at meetings.
For
Directive, MiFIR, MAD and MAR
example, the content of relevant
in order to help competent
face-to-face conversations with a
authorities identify behaviours
client could be recorded by using
which are not compliant with the
written minutes or notes. Such
legal framework regulating the
orders will be considered
activity of investment firms. These
equivalent to orders received by
records shall also be available to
telephone.
Where minutes are taken
investment firms and to clients to
of face-to-face conversations with
demonstrate the development of
clients Member States should
their relationship with regard to
ensure that appropriate safeguards
orders transmitted by clients and
are in place, to ensure that the
transaction carried out by firms.
client does not lose out as a result
Records of telephone conversations
of the minutes inaccurately
or electronic communications
recording the communication
involving client orders shall be kept
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for a period of five years, which is
between the
parties. Such
in line with these objectives and in
safeguards should not imply any
accordance with the general
assumption of liability by the client.
retention period for any records
To provide legal certainty regarding
under Article 51 of Directive
the scope of the obligation, it is
2006/73/EC. Notwithstanding the
appropriate to apply it to all
retention period of five years,
equipment provided by the firm or
investment firms shall retain the
permitted to be used by the
records for longer than five but a
investment firm and to require the
maximum of seven years when
investment firms to take reasonable
asked to do so by their competent
steps to ensure that no privately
authorities in pursuit of their duties.
owned equipment is used in
For these reasons, it is appropriate
relation to transactions. These
to provide in this Directive for the
records shall be available to
principles of a general regime
competent authorities in the
concerning the recording of
fulfilment of their supervisory tasks
telephone conversations or
and in the performance of
electronic communications
enforcement actions under this
involving client orders.
Directive, MiFIR,
CSMAD and
MAR in order to help competent
authorities identify behaviours
which are not compliant with the
legal framework regulating the
activity of investment firms. These
records shall also be available to
investment firms and to clients to
demonstrate the development of
their relationship with regard to
orders transmitted by clients and
transaction carried out by firms.
Records of telephone conversations
or electronic communications
involving client orders shall be kept
for a period of five years, which is
in line with these objectives and in
accordance with the general
retention period for any records
under Article 51 of Directive
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2006/73/EC. Notwithstanding the
retention period of five years,
investment firms shall retain the
records for longer than five but a
maximum of seven years when
asked to do so by their competent
authorities in pursuit of their duties.
For these reasons, it is appropriate
to provide in this Directive for the
principles of a general regime
concerning the recording of
telephone conversations or
electronic communications
involving client orders.
Note: inclusion of Council recital,
but for the parts which are identical
to Article 16(7) + inclusion of
suggested and agreed drafting for
written minutes
65.
Rec. 43
(43) Member States should ensure
[…]
(43) Member States should ensure
[linked to recitals 41 and 69]
the right to the protection of
respect for the right
of protection of
Technical group 20140128
personal data in accordance with
personal data in accordance with
Directive 95/46/EC of the European
Directive 95/46/EC of the European
[…]
Parliament and of the Council of 24
Parliament and of the Council of 24
October 1995 on the protection of
October 1995 on the protection of
individuals with regard to the
individuals with regard to the
processing of personal data and of
processing of personal data and of
the free movement of such data and
the free movement of such data53
Directive 2002/58/EC. This
and Directive 2002/58/EC
of the
protection should notably extend to
European Parliament and of the
telephone and electronic recording
Council of 12 July 2002
as required under Article 13.
concerning the processing of
personal data and the protection of
53 OJ L 281, 23.11.1995, p. 31.
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privacy in the electronic
communications sector54 which
govern the processing of personal
data carried out in application of
this Directive. This protection
should
, in particular, extend to
telephone and electronic recording.
Processing of personal data by the
European Supervisory Authority
(European Securities and Markets
Authority) (ESMA) established by
Regulation (EU) No 1095/2010 of
the European Parliament and of
the Council55 in the application of
this Directive is subject to
Regulation (EU) No 45/2001 of
the European Parliament and of
the Council of 18 December 2000
on the protection of individuals
with regard to the processing of
personal data by the Community
institutions and bodies and on the
free movement of such data56.
66.
Rec. 44
(44) The use of trading technology
(44) The use of trading technology
(44) The use of trading technology
Technical group 20140128 / 29
has evolved significantly in the past
has evolved significantly in the past
has evolved significantly in the past
Cf. row 478
decade and is now extensively used
decade and is now extensively used
decade and is now extensively used
by market participants. Many
by market participants. Many
by market participants. Many
(44) The use of trading technology
market participants now make use
market participants now make use
market participants now make use
has evolved significantly in the past
of algorithmic trading where a
of algorithmic trading where a
of algorithmic trading where a
decade and is now extensively used
computer algorithm automatically
computer algorithm automatically
computer algorithm automatically
by market participants. Many
determines aspects of an order with
determines aspects of an order with
determines aspects of an order with
market participants now make use
minimal or no human intervention.
minimal or no human intervention.
minimal or no human intervention.
of algorithmic trading where a
A specific subset of algorithmic
An investment firm that engages in
A specific subset of algorithmic
computer algorithm automatically
trading is high frequency trading
algorithmic trading pursuing a
trading is high-frequency trading
determines aspects of an order with
54
OJ L 201, 31.7.2002, p. 37.
55
OJ L 331, 15.12.2010, p. 84.
56
OJ L 8, 12.1.2001, p. 1.
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where a trading system analyses
market making strategy, or acts in a
where a trading system analyses
minimal or no human intervention.
data or signals from the market at
similar manner should carry out
data or signals from the market at
Risks arising from algorithmic
high speed and then sends or
this market making continuously
high speed
, typically in
trading should be regulated.
updates large numbers of orders
during a specified proportion of the
milliseconds or microseconds, and
However, the use of algorithms in
within a very short time period in
trading venue’s trading hours.
then sends or updates large
post-trade processing of executed
response to that analysis. High
Regulatory technical standards
numbers of orders within a very
transactions does not constitute
frequency trading is typically done
should clarify what constitutes
short time period in response to that
algorithmic trading. An investment
by the traders using their own
specified proportion of the trading
analysis. High-frequency trading is
firm that engages in algorithmic
capital to trade and rather than being
venue’s trading hours by ensuring
typically done by the traders using
trading pursuing a market making
a strategy in itself is usually the use
that such specified proportion is
their own capital to trade and rather
strategy should carry out this
of sophisticated technology to
significant in comparison to the
than being a strategy in itself
can
market making continuously during
implement more traditional trading
total trading hours.
often involve the use of
a specified proportion of the trading
strategies such as market making or
sophisticated technology to
venue’s trading hours. Regulatory
arbitrage.
implement more traditional trading
technical standards should clarify
strategies such as market making or
what constitutes specified
arbitrage.
proportion of the trading venue’s
trading hours by ensuring that such
specified proportion is significant
in comparison to the total trading
hours
, taking into account the
liquidity, scale and nature of the
specific market and the
characteristics of the instrument
traded.
Technical group 20140206
Pres to check.
(44-a) Investment firms that pursue
a market making strategy should
have in place appropriate systems
and controls for that activity.
Pursuing a market making strategy
should be understood in a way
specific to this context, which is
independent from other definitions
such as the definition of “market
making activities” in Regulation
(EU) No 236/2012.
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20140207
Pres. does not agree to recital 44-a.
EP to reconsider
20140211
Trilogue parties agree on the
following new recital in addition to
recital 44 above:
(44-a) Investment firms that
engage in algorithmic trading
pursuing a market making
strategy should have in place
appropriate systems and
controls for that activity. Such
an activity should be
understood in a way specific to
its context and purpose. The
definition of such activity is
therefore independent from
other definitions such as the
definition of “market making
activities” in Regulation (EU)
No 236/2012.
66a
Rec.
(44a) A specific subset of
Technical group 20140128
44a
algorithmic trading is high
(44a) A specific subset of
(new)
frequency algorithmic trading
algorithmic trading is high
where a trading system analyses
frequency algorithmic trading
data or signals from the market at
where a trading system analyses
high speed and then sends or
data or signals from the market at
updates large numbers of orders
high speed and then sends or
within a very short time period in
updates large numbers of orders
response to that analysis. In
within a very short time period in
particular, high frequency
response to that analysis. In
algorithmic trading may contain
particular, high frequency
elements such as order initiation,
algorithmic trading may contain
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generating, routing and execution
elements such as order initiation,
which are determined by the system
generating, routing and execution
without human intervention for
which are determined by the system
each individual trade or order, short
without human intervention for
time-frame for establishing and
each individual trade or order, short
liquidating positions, high daily
time-frame for establishing and
portfolio turnover, high order-to-
liquidating positions, high daily
trade ratio intraday and ending the
portfolio turnover, high order-to-
trading day at or close to a flat
trade ratio intraday and ending the
position. High frequency
trading day at or close to a flat
algorithmic trading is characterised,
position. High frequency
among others, by high message
algorithmic trading is characterised,
intra-day rates which constitute
among others, by high message
orders, quotes or cancellations. In
intra-day rates which constitute
determining what constitutes high
orders, quotes or cancellations. In
message intra-day rates, the identity
determining what constitutes high
of the beneficial owner behind the
message intra-day rates, the identity
activity, the length of the
of the
client ultimately behind the
observation period, the comparison
activity, the length of the
with the overall market activity
observation period, the comparison
during that period and the relative
with the overall market activity
concentration or fragmentation of
during that period and the relative
activity should be taken into
concentration or fragmentation of
account. High frequency
activity should be taken into
algorithmic trading is typically
account. High frequency
done by the traders using their own
algorithmic trading is typically
capital to trade and rather than
done by the traders using their own
being a strategy in itself is usually
capital to trade and rather than
the use of sophisticated technology
being a strategy in itself is usually
to implement more traditional
the use of sophisticated technology
trading strategies such as market
to implement more traditional
making or arbitrage.
trading strategies such as market
making or arbitrage.
67.
Rec. 45
(45) In line with Council
(45) In line with Council
(45) In line with Council
Agreed silence procedure
conclusions on strengthening Union
conclusions on strengthening Union
conclusions on strengthening
20131008
financial supervision of June 2009,
financial supervision of June 2009,
European Union financial
T: last sentence
and in order to contribute to the
and in order to contribute to the
supervision of June 2009, and in
establishment of a single rulebook
establishment of a single rulebook
order to contribute to the
Technical group 29 08
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for Union financial markets, help
for Union financial markets, help
establishment of a single rulebook
Pres and COM do not support EP
further develop a level playing field
further develop a level playing field
for
European Union financial
addition as risk implying that CAs
for Member States and market
for Member States and market
markets, help further develop a
do not have responsibility to carry
participants, enhance investor
participants, enhance investor
level playing field for Member
out investor protection and
protection and improve supervision
protection and improve supervision
States and market participants,
monitoring.
and enforcement, the Union has
and enforcement, the Union has
enhance investor protection and
committed to minimise, where
committed to minimise, where
improve supervision and
(45) In line with Council
appropriate, discretions available to
appropriate, discretions available to
enforcement, the
European Union
conclusions on strengthening
Member States across Union
Member States across Union
is committed to minimise, where
European Union financial
financial services legislation.
financial services legislation.
appropriate, discretions available to
supervision of June 2009, and in
Besides the introduction in this
Besides the introduction in this
Member States across
European
order to contribute to the
directive of a common regime for
Directive of a common regime for
Union financial services
law.
In
establishment of a single rulebook
the recording of telephone
the recording of telephone
addition to the introduction in this
for
European Union financial
conversations or electronic
conversations or electronic
Directive of a common regime for
markets, help further develop a
communications involving client
communications involving client
the recording of telephone
level playing field for Member
orders, it is appropriate to reduce the
orders, it is appropriate to reduce
conversations or electronic
States and market participants,
possibility of competent authorities
the possibility of competent
communications involving client
enhance investor protection and
to delegate supervisory tasks in
authorities to delegate supervisory
orders, it is appropriate to reduce
improve supervision and
certain cases, to limit discretions in
tasks in certain cases, to limit
the possibility of competent
enforcement, the
European Union
the requirements applicable to tied
discretions in the requirements
authorities to delegate supervisory
is committed to minimise, where
agents and to the reporting from
applicable to tied agents and to the
tasks in certain cases, to limit
appropriate, discretions available to
branches.
reporting from branches.
discretions in the requirements
Member States across
European
applicable to tied agents and to the
Union financial services
law.
In
reporting from branches.
However,
addition to the introduction in this
Directive of a common regime for
while competent authorities have
the recording of telephone
responsibilities under this
conversations or electronic
Directive to safeguard investor
communications involving client
protection, nothing in this
orders, it is appropriate to reduce
Directive prevents Member States
from nominating authorities in
the possibility of competent
authorities to delegate supervisory
addition to the competent
tasks in certain cases, to limit
authorities to provide additional
discretions in the requirements
monitoring of markets to enhance
applicable to tied agents and to the
the protection of retail investors.
reporting from branches.
68.
Rec. 46
(46) The use of trading technology
(46) The use of trading technology
(46)
Technical advances have
Technical group 20140128
has increased the speed, capacity
has increased the speed, capacity
enabled high-frequency trading
(46)
Technical advances have
and complexity of how investors
and complexity of how investors
and an evolution of business
enabled high-frequency trading
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trade. It has also enabled market
trade. It has also enabled market
models. High-frequency trading is
and an evolution of business
participants to facilitate direct
participants to facilitate direct
facilitated by the co-location of
models. High-frequency trading is
access by their clients to markets
electronic access by their clients to
market participants' facilities in
facilitated by the co-location of
through the use of their trading
markets through the use of their
close physical proximity to a
market participants' facilities in
facilities, through direct electronic
trading facilities […]
. Trading
trading venue's matching engine.
close physical proximity to a
access or sponsored and direct
technology has provided benefits to
To ensure orderly and fair trading
trading venue's matching engine.
market access. Trading technology
the market and market participants
conditions it is essential to require
To ensure orderly and fair trading
has provided benefits to the market
generally such as wider
trading venues to provide such co-
conditions it is essential to require
and market participants generally
participation in markets, increased
location services on a non-
trading venues to provide such co-
such as wider participation in
liquidity, narrower spreads, reduced
discriminatory, fair and
location services on a non-
markets, increased liquidity,
short term volatility and the means
transparent basis. The use of
high-
discriminatory, fair and
narrower spreads, reduced short
to obtain better execution of orders
frequency trading technology has
transparent basis. The use of
term volatility and the means to
for clients. Yet, this trading
increased the speed, capacity and
trading technology has increased
obtain better execution of orders for
technology also gives rise to a
complexity of how investors trade.
the speed, capacity and complexity
clients. Yet, this trading technology
number of potential risks such as an
It has also enabled market
of how investors trade. It has also
also gives rise to a number of
increased risk of the overloading of
participants to facilitate direct
enabled market participants to
potential risks such as an increased
the systems of trading venues due
access by their clients to markets
facilitate direct electronic access by
risk of the overloading of the
to large volumes of orders, risks of
through the use of their trading
their clients to markets through the
systems of trading venues due to
algorithmic trading generating
facilities, through direct
market
use of their trading facilities,
large volumes of orders, risks of
duplicative or erroneous orders or
access or sponsored access. Trading
through direct market access or
algorithmic trading generating
otherwise malfunctioning in a way
technology has provided benefits to
sponsored access. Trading
duplicative or erroneous orders or
that may create a disorderly market.
the market and market participants
technology has provided benefits to
otherwise malfunctioning in a way
In addition there is the risk of
generally such as wider
the market and market participants
that may create a disorderly market.
algorithmic trading systems
participation in markets,
arguably
generally such as wider
In addition there is the risk of
overreacting to other market events
increased liquidity,
although
participation in markets, increased
algorithmic trading systems
which can exacerbate volatility if
doubts remain about the real depth
liquidity, narrower spreads, reduced
overreacting to other market events
there is a pre-existing market
of liquidity provided, narrower
short term volatility and the means
which can exacerbate volatility if
problem. Finally, algorithmic
spreads, reduced short term
to obtain better execution of orders
there is a pre-existing market
trading or high frequency
volatility and the means to obtain
for clients. Yet, this trading
problem. Finally, algorithmic
algorithmic trading technique can
better
price formation and
technology also gives rise to a
trading or high frequency can lend
lend itself to certain forms of
execution of orders for clients. Yet,
number of potential risks such as an
itself to certain forms of abusive
abusive behaviour if misused.
high-frequency trading technology
increased risk of the overloading of
behaviour if misused.
also gives rise to a number of
the systems of trading venues due
potential risks such as an increased
to large volumes of orders, risks of
risk of the overloading of the
algorithmic trading generating
systems of trading venues due to
duplicative or erroneous orders or
large volumes of orders, risks of
otherwise malfunctioning in a way
algorithmic trading generating
that may create a disorderly market.
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Compromise
duplicative or erroneous orders or
In addition there is the risk of
otherwise malfunctioning in a way
algorithmic trading systems
that may create a disorderly market.
overreacting to other market events
In addition there is the risk of
which can exacerbate volatility if
algorithmic trading systems
there is a pre-existing market
overreacting to other market events
problem. Finally, algorithmic
which can exacerbate volatility if
trading or high frequency
there is a pre-existing market
algorithmic trading technique can,
problem.
Algorithmic trading or
like any other form of trading,
high frequency
trading can
, like
lend themselves to certain forms of
any other form of trading, lend
abusive behaviour if misused,
itself to certain forms of abusive
which should be prohibited under
behaviour if misused
which should
Regulation (EU) No .../... [MAR].
be prohibited under Regulation
High-frequency trading may also,
(EU) No .../... [MAR]. High-
because of the information
frequency trading may also,
advantage provided to high-
because of the information
frequency traders, prompt
advantage provided to high-
investors to choose to execute
frequency traders, prompt
trades in venues where they can
investors to choose to execute
avoid interaction with high-
trades in venues where they can
frequency traders.
It is appropriate
avoid interaction with high-
to subject high-frequency
frequency traders.
It is appropriate
algorithmic trading techniques
to subject high-frequency trading
which rely on certain specified
strategies which rely on certain
characteristics to particular
specified characteristics to
regulatory scrutiny. While these
particular regulatory scrutiny.
are predominantly techniques
While these are predominantly
which rely on trading on own
strategies which rely on trading on
account such scrutiny should also
own account such scrutiny should
apply where the execution of the
also apply where the execution of
technique is structured in such a
the trading strategy is structured
way as to avoid the execution
in such a way as to avoid the
taking place on own account.
execution taking place on own
account.
69.
Rec. 47
(47) These potential risks from
(47) These potential risks from
(47) These potential risks from
Technical group 20140128
increased use of technology are best
increased use of technology are
increased use of technology are
(47) These potential risks from
mitigated by a combination of
best mitigated by a combination of
best mitigated by a combination of
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Compromise
specific risk controls directed at
measures and specific risk controls
specific risk controls directed at
increased use of technology are
firms who engage in algorithmic or
directed at firms who engage in
firms who engage in algorithmic or
best mitigated by a combination of
high frequency trading and other
algorithmic or high frequency
high frequency trading and other
measures and specific risk controls
measures directed at operators of
algorithmic trading technique and
measures directed at operators of
directed at firms who engage in
trading venues that are accessed by
other measures directed at operators
all trading venues that are accessed
algorithmic or high frequency
such firms. It is desirable to ensure
of trading venues that are accessed
by such firms.
These should reflect
algorithmic trading technique, who
that all high frequency trading firms
by such firms. It is desirable to
and build on the technical
provide direct electronic access,
be authorised when they are a direct
ensure that all high frequency
guidelines issued by ESMA in
and other measures directed at
member of a trading venue. This
algorithmic trading firms be
February 2012 on systems and
operators of all trading venues that
should ensure they are subject to
authorised […]
. This should ensure
controls in an automated trading
are accessed by such firms.
These
organisational requirements under
they are subject to organisational
environment for trading platforms,
should reflect and build on the
the Directive and are properly
requirements under the Directive
investment firms and competent
technical guidelines issued by
supervised.
and are properly supervised
.
authorities (ESMA/2012/122) in
ESMA in February 2012 on
However, entities which are
order to strengthen the resilience
systems and controls in an
authorised and supervised under the
of markets in the light of
automated trading environment
legislation of the Union regulating
technological developments. It is
for trading platforms, investment
the financial sector and are
desirable to ensure that all high-
firms and competent authorities
exempted from this Directive, but
frequency trading firms be
(ESMA/2012/122) in order to
which engage in algorithmic
authorised when they are a direct
strengthen the resilience of
trading and high frequency
member of a trading venue. This
markets in the light of
algorithmic trading, should not be
should ensure they are subject to
technological developments. It is
required to obtain an authorisation
organisational requirements under
desirable to ensure that all high
under this Directive and should
the Directive and are properly
frequency algorithmic trading firms
only be subject to the measures and
supervised.
In this respect, ESMA
be authorised […]. This should
controls aimed at tackling the
should play an important
ensure they are subject to
specific risk arising from these
coordinating role by defining
organisational requirements under
types of trading.
appropriate tick sizes in order to
the Directive and are properly
ensure orderly markets at Union
supervised.
However, entities
level. In addition, all orders
which are authorised and
should be subject to appropriate
supervised under the legislation
risk controls at source. It is
of the Union regulating the
therefore also appropriate to end
financial sector and are exempted
the practice of sponsored and
from this Directive, but which
naked access to avoid the risk that
engage in algorithmic trading
firms with insufficient controls in
and high frequency algorithmic
place create disorderly market
trading, should not be required to
conditions and to ensure that
obtain an authorisation under
market participants can be
this Directive and should only be
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identified and held accountable for
subject to the measures and
any disorderly conditions for
controls aimed at tackling the
which they are responsible. It is
specific risk arising from these
also necessary to be able to clearly
types of trading. In this respect,
identify order flows coming from
ESMA should play an important
high-frequency trading. ESMA
coordinating role by defining
should also continue to monitor
appropriate tick sizes in order to
developments in technology and in
ensure orderly markets at Union
methods used to access trading
level.
venues and should continue to
prepare guidelines to ensure that
the requirements of this Directive
can continue to be effectively
applied in the light of new
practices.
70.
Rec. 48
(48) Both firms and trading venues
(48) Both firms and trading venues
(48) Both firms and trading venues
Technical group 20140128
should ensure robust measures are
should ensure robust measures are
should ensure robust measures are
(48) Both firms and trading venues
in place to ensure that automated
in place to ensure that automated
in place to ensure that
high-
should ensure robust measures are
trading does not create a disorderly
trading does not create a disorderly
frequency and automated trading
in place to ensure
that
market and cannot be used for
market and cannot be used for
does not create a disorderly market
alghorithmic trading or high
abusive purposes. Trading venues
abusive purposes. Trading venues
and cannot be used for abusive
frequency algorithmic trading
should also ensure their trading
should also ensure their trading
purposes. Trading venues should
techniques do not create a
systems are resilient and properly
systems are resilient and properly
also ensure their trading systems
disorderly market and cannot be
tested to deal with increased order
tested to deal with increased order
are resilient and properly tested to
used for abusive purposes. Trading
flows or market stresses and that
flows or market stresses and that
deal with increased order flows or
venues should also ensure their
circuit breakers are in place to
circuit breakers are in place to
market stresses and that circuit
trading systems are resilient and
temporarily halt trading if there are
temporarily halt trading or
breakers are in place
on all trading
properly tested to deal with
sudden unexpected price
constrain it if there are sudden
venues to temporarily halt trading
increased order flows or market
movements.
unexpected price movements.
if there are sudden unexpected
stresses and that circuit breakers are
price movements.
in place
on trading venues to
temporarily halt trading
or
constrain it if there are sudden
unexpected price movements.
71.
Rec.
(48a) It is also necessary to ensure
Technical group 20140128
48a
that the fee structures of trading
(48a) It is also necessary to ensure
(new)
venues are transparent, non-
that the fee structures of trading
discriminatory and fair and that
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they are not structured in such a
venues are transparent, non-
way as to promote disorderly
discriminatory and fair and that
market conditions. It is therefore
they are not structured in such a
appropriate to ensure that trading
way as to promote disorderly
venue fee structures incentivise a
market conditions.
It is therefore
lower ratio of system messages to
appropriate to allow for trading
executed trades with higher fees
venues to adjust their fees for
applying to practices such as the
cancelled orders according to th
cancellation of high volumes or
length of time for which the order
proportions of orders which could
was maintained and to calibrate
create such disorderly conditions
the fees to each financial
and which require trading venues
instrument to which they apply.
to increase the capacity of
Member States should also be able
infrastructure without necessarily
to allow trading venues to impose
benefitting other market
higher fees for placing orders that
participants.
are subsequently cancelled or on
participants placing a high ratio of
cancelled orders and on those
operating a high frequency
algorithmic trading technique in
order to reflect the additional
burden on system capacity without
necessarily benefitting other
market participants.
72.
Rec. 49
(49) In addition to measures relating
(49) In addition to measures
(49) In addition to measures
Technical group 20140129
to algorithmic and high frequency
relating to algorithmic and high
relating to algorithmic and high
Note: concept of responsibility
trading it is appropriate to include
frequency algorithmic trading
frequency trading it is appropriate
kept, but concept of liability not
controls relating to investment firms
technique it is appropriate to
to
prohibit sponsored and naked
included so as not to interfere with
providing direct electronic access to
include controls relating to
access and to include controls
rights for restitution under civil law
markets for clients as electronic
investment firms which provide
relating to investment firms
by third parties
trading can be carried out via a firm
direct electronic access to markets
providing direct
market access to
providing electronic market access
for their clients […]. It is also
markets for clients▌. It is also
(49) In addition to measures
and many similar risks. It is also
appropriate that, irrespective of the
appropriate that firms providing
relating to algorithmic and high
appropriate that firms providing
form of the direct electronic access
direct
market access ensure that
frequency algorithmic trading
direct electronic access ensure that
provided (such as direct market
persons using this service are
technique
it is appropriate to ban
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persons using this service are
access, sponsored access or other
properly qualified and that risk
the provision of direct electronic
properly qualified and that risk
technical forms), firms providing
controls are imposed on the use of
access to markets by investment
controls are imposed on the use of
direct electronic access ensure that
the service. It is appropriate that
firms for their clients where this
the service. It is appropriate that
persons using this service are
detailed organisational
access is not subject to proper
detailed organisational requirements
properly qualified […], that risk
requirements regarding these new
systems and controls. Irrespective
regarding these new forms of
controls are imposed on the use of
forms of trading should be
of the form of the direct electronic
trading should be prescribed in more
the service and that these firms
prescribed in more detail in
access provided, firms providing
detail in delegated acts. This should
retain responsibility and liability for
delegated acts.
In addition to
such access should
assess and
ensure that requirements may be
trading submitted by their clients
ESMA's powers to prepare
review the suitability of clients
amended where necessary to deal
through the use of their systems or
updated guidelines on different
using that service and ensure that
with further innovation and
using their trading codes. It is
forms of market access and
persons using this service are
developments in this area.
appropriate that detailed
associated controls, this should
properly qualified […]that risk
organisational requirements
ensure that requirements may be
controls are imposed on the use of
regarding these new forms of
amended where necessary to deal
the service and that these firms
trading should be prescribed in
with further innovation and
retain responsibility for trading
more detail in delegated acts. This
developments in this area.
submitted by their clients through
should ensure that requirements
the use of their systems or using
may be amended where necessary
their trading codes. It is appropriate
to deal with further innovation and
that detailed organisational
developments in this area.
requirements regarding these new
forms of trading should be
prescribed in more detail
inregulatory technical standards.
This should ensure that
requirements may be amended
where necessary to deal with
further innovation and
developments in this area.
Technical group 20140206
At the request of Parliament,
wording above more closely
aligned with Article 17(4) (row
482)
73.
Rec.
(49a) In order to ensure an effective
Technical group 20140128
49a
supervision and in order to enable
(49a) In order to ensure an effective
(new)
the competent authorities to take
supervision and in order to enable
appropriate measures against
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defective or rogue algorithmic
the competent authorities to take
strategies in due time it is necessary
appropriate measures against
to flag all orders generated by
defective or rogue algorithmic
algorithmic trading. By means of
strategies in due time it is necessary
flagging, competent authorities are
to flag all orders generated by
enabled to identify and distinguish
algorithmic trading. By means of
orders originating from different
flagging, competent authorities will
algorithms and to efficiently
be enabled to identify and
reconstruct and evaluate the
distinguish orders originating from
strategies that algorithmic traders
different algorithms and to
employ. This will mitigate the risk
efficiently reconstruct and evaluate
that orders are ambiguously
the strategies that algorithmic
attributed to an algorithmic strategy
traders employ. This will mitigate
and a trader. The flagging permits
the risk that orders are not
the competent authorities to react
unambiguously attributed to an
efficiently and effectively against
algorithmic strategy and a trader.
algorithmic trading strategies that
The flagging permits the competent
behave in an abusive manner or
authorities to react efficiently and
pose risks to the orderly
effectively against algorithmic
functioning of the market.
trading strategies that behave in an
abusive manner or pose risks to the
orderly functioning of the market.
73a
Technical group 20140128
.
Technical group 20140116
Cf. row 1407
(49b) In order to ensure that
market integrity is maintained in
the light of technological
developments in financial
markets, ESMA should regularly
seek input from national experts
on developments related to
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trading technology including
high-frequency trading and new
practices which could constitute
market abuse, so as to identify
and promote effective strategies
for preventing and addressing
such abuse.
74.
Rec. 50
(50) There is a multitude of trading
(50) There is a multitude of trading
(50) There is a multitude of trading
Technical group 20140128
venues currently operating in the
venues currently operating in the
venues currently operating in the
(50) There is a multitude of trading
EU , among which a number are
EU, among which a number are
Union, among which a number are
venues currently operating in the
trading identical instruments. In
trading identical instruments. In
trading identical instruments. In
EU, among which a number are
order to address potential risks to
order to address potential risks to
order to address potential risks to
trading identical instruments. In
the interests of investors it is
the interests of investors it is
the interests of investors it is
order to address potential risks to
necessary to formalise and further
necessary to formalise and further
necessary to formalise and further
the interests of investors it is
harmonise the processes on the
harmonise the processes on the
coordinate the processes on the
necessary to formalise and further
consequences for trading on other
consequences for trading on other
consequences for trading on other
co-ordinate the processes on the
venues if one trading venue decides
trading venues if an investment
venues if one trading venue decides
consequences for trading on other
to suspend or remove a financial
firm or a market operator operating
to suspend or remove a financial
trading venues if an investment
instrument from trading. In the
a trading venue decides to suspend
instrument from trading. In the
firm or a market operator operating
interest of legal certainty and to
or remove a financial instrument
interest of legal certainty and to
a trading venue decides to suspend
adequately address conflicts of
from trading. In the interest of legal
adequately address conflicts of
or remove a financial instrument
interests when deciding to suspend
certainty and to adequately address
interests when deciding to suspend
from trading. In the interest of legal
or to remove instruments from
conflicts of interests when deciding
or to remove instruments from
certainty and to adequately address
trading, it should be ensured that if
to suspend or to remove financial
trading, it should be ensured that if
conflicts of interests when deciding
one regulated market or MTF stops
instruments from trading, it should
one regulated market or MTF stops
to suspend or to remove financial
trading due to non disclosure of
be ensured that if an investment
trading due to non disclosure of
instruments from trading, it should
information about an issuer or
firm or a market operator operating
information about an issuer or
be ensured that if an investment
financial instrument, the others
a trading venue stops trading due to
financial instrument, the others
firm or a market operator operating
follow that decision unless
non compliance any longer with
follow that decision. In addition, it
a trading venue stops trading due to
continuing trading may be justified
their rules, the others follow that
is necessary to
further formalise
non compliance any longer with
due to exceptional circumstances. In
decision if it is decided so by their
and improve the exchange of
their rules, the others follow that
addition, it is necessary to formalise
competent authorities unless
information and the cooperation of
decision if it is decided so by their
and improve the exchange of
continuing trading may be justified
trading venues in cases of
competent authorities unless
information and the cooperation of
due to exceptional circumstances.
exceptional conditions in relation to
continuing trading may be justified
trading venues in cases of
In addition, it is necessary to
a particular instrument that is
due to exceptional circumstances.
exceptional conditions in relation to
formalise and improve the
traded on various venues.
This
In addition, it is necessary to
a particular instrument that is traded
exchange of information and the
should include arrangements to
formalise and improve the
cooperation between the competent
prevent trading venues using
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on various venues.
authorities in relation to suspension
information transmitted in the
exchange of information and the
and removal of financial
context of a suspension or removal
cooperation between the competent
instruments from trading on a
of an instrument from trading for
authorities in relation to suspension
trading venue.
commercial purposes.
and removal of financial
instruments from trading on a
trading venue.
These arrangements
should be applied in such a way as
to prevent trading venues using
information transmitted in the
context of a suspension or removal
of an instrument from trading for
commercial purposes.
75.
Rec. 51
(51) More investors have become
(51) More investors have become
(51) More investors have become
Agreed
silence
procedure
active in the financial markets and
active in the financial markets and
active in the financial markets and
20131008
are offered a more complex wide-
are offered a more complex wide-
are offered a more complex wide-
(51) More investors have become
ranging set of services and
ranging set of services and
ranging set of services and
active in the financial markets and
instruments and, in view of these
instruments and, in view of these
instruments and, in view of these
are offered a more complex wide-
developments, it is necessary to
developments, it is necessary to
developments, it is necessary to
ranging set of services and
provide for a degree of
provide for a degree of
provide for a degree of
instruments and, in view of these
harmonisation to offer investors a
harmonisation to offer investors a
harmonisation to offer investors a
developments, it is necessary to
high level of protection across the
high level of protection across the
high level of protection across the
provide for a degree of
Union. When Directive 2004/39/EC
Union. When Directive 2004/39/EC
European Union. When Directive
harmonisation to offer investors a
was adopted, the increasing
was adopted, the increasing
2004/39/EC was adopted, the
high level of protection across the
dependence of investors on personal
dependence of investors on
increasing dependence of investors
European Union. When Directive
recommendations required to
personal recommendations required
on personal recommendations
2004/39/EC was adopted, the
include the provision of investment
to include the provision of
required to include the provision of
increasing dependence of investors
advice as an investment service
investment advice as an investment
investment advice as an investment
on personal recommendations
subject to authorisation and to
service subject to authorisation and
service subject to authorisation and
required to include the provision of
specific conduct of business
to specific conduct of business
to specific conduct of business
investment advice as an investment
obligations. The continuous
obligations. The continuous
obligations. The continuous
service subject to authorisation and
relevance of personal
relevance of personal
relevance of personal
to specific conduct of business
recommendations for clients and the
recommendations for clients and
recommendations for clients and
obligations. The continuous
increasing complexity of services
the increasing complexity of
the increasing complexity of
relevance of personal
and instruments require enhancing
services and instruments require
services and instruments require
recommendations for clients and
the conduct of business obligations
enhancing the conduct of business
enhancing the conduct of business
the increasing complexity of
in order to strengthen the protection
obligations in order to strengthen
obligations in order to strengthen
services and instruments require
of investors.
the protection of investors.
the protection of investors.
enhancing the conduct of business
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obligations in order to strengthen
the protection of investors.
Technical group 20140128
76.
Rec.
(51a) While enhanced conduct of
51a
business obligations for advisory
(51a) Member States should ensure
(new)
services are necessary they are not
that investment firms act in
sufficient to ensure appropriate
accordance with the best interests
investor protection. In particular,
of their clients and are able to
Member States should ensure that
comply with their obligations under
where investment firms design
this Directive. Investment firms
investment products or structured
should accordingly understand the
deposits for sale to professional or
features
of
the
financial
retail clients those products are
instruments
and
structured
designed to meet the needs and
deposits offered or recommended
characteristics of an identified
and establish and review effective
target market within the relevant
policies
and
arrangements
to
category of clients. Moreover,
identify the category of clients to
Member States should ensure that
whom products and services are to
the investment firm takes
be provided. Member States should
reasonable steps to ensure that the
ensure that the investment firms
investment product is marketed
which
manufacture
financial
and distributed to clients within
instruments
and
structured
the target group. However, this
deposits ensure that those products
should not relieve third-party
are manufactured to meet the
distributers of responsibility where
needs of an identified target market
they market or distribute the
of end clients within the relevant
product outside the target group
category of clients, take reasonable
without the knowledge or consent
steps to ensure that the financial
of the firm that designed the
instruments
and
structured
product. Producers should also
deposits are distributed to the
periodically review the
identified
target
market
and
performance of their products, to
periodically
review
the
assess whether the products have
identification of the target market
performed in accordance with
of and the performance of the
theirs design and to establish
products they offer.
whether their target market for the
product remains correct. Investors
Investment
firms
offering
or
also need appropriate information
recommending to clients financial
about products and in particular
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information on a consistent basis
instruments
and
structured
about the cumulative impact of
deposits
not
manufactured
by
different layers of charges on the
them should also have appropriate
investment return. The provisions
arrangements in place to obtain
of Article 80(8) of Directive
and
understand
the
relevant
2006/48/EC should be taken into
information concerning the product
account in this regard.
approval process, including the
identified target market and the
characteristics of the product they
offer
or
recommend.
This
obligation should apply without
prejudice to any assessment of
appropriateness or suitability to be
subsequently carried out by the
investment firm in the provision of
investment services to each client,
on the basis of their personal
needs,
characteristics
and
objectives.
In order to ensure that financial
instruments
and
structured
deposits will be offered or
recommended only when this is
in the interest of the client,
investment firms offering or
recommending
the
product
manufactured by firms which are
not subject to the product
governance requirements set out
in this Directive or manufactured
by third-country firms should
also
have
appropriate
arrangements to obtain sufficient
information about the financial
instruments
and
structured
deposits.
Note: drafting reflects the agreed
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terminology
(manufacture
instead of design) and the idea
that distributors’ duties should
also cover products which have
not
undergone
the
product
governance processes as the
“manufacturer/issuer” is not a
MiFID regulated entity.
Drafting agreed at political level
as part of the package on product
governance [See row 448]
77.
Rec. 52
(52) In order to give all relevant
(52) Investment firms providing
(52) In order to give all relevant
Technical group 20140128 / 29
information to investors, it is
investment advice to clients should
information to investors, it is
(52) A. In order to give all relevant
appropriate to require investment
take into account the variety of
appropriate to require investment
information to investors, it is
firms providing investment advice
needs that the investment firms’
firms providing investment advice
appropriate to require investment
to clarify the basis of the advice
potential clients may possess, in
to clarify the basis of the advice
firms providing investment advice
they provide, notably the range of
terms of knowledge and
they provide,
in particular the
to disclose the cost of the advice,
products they consider in providing
experience, financial situation and
range of products they consider in
to clarify the basis of the advice
personal recommendations to
investment objectives. These
providing personal
they provide,
in particular the
clients, whether they provide
elements may result in differences
recommendations to clients,
the
range of products they consider in
investment advice on an
concerning factors such as
cost of the advice or, where the
providing personal
independent basis and whether they
complexity, levels of risks and
cost of fees and inducements
recommendations to clients,
provide the clients with the on-
holding periods that the investment
cannot be ascertained prior to the
whether they provide investment
going assessment of the suitability
firms should consider in
provision of the advice, the
advice on an independent basis or
of the financial instruments
recommending an investment to a
manner in which the cost will be
not and whether they provide the
recommended to them. It is also
client in order to comply with the
calculated, whether
the investment
clients with the periodic assessment
appropriate to require investment
obligation to provide suitable
advice
is provided in conjunction
of the suitability of the financial
firms to explain their clients the
advice
. In order to further define
with the acceptance or receipt of
instruments recommended to them.
reasons of the advice provided to
the regulatory framework for the
third-party inducements and
It is also appropriate to require
them. In order to further define the
provision of investment advice,
whether
the investment firms
investment firms to explain
to their
regulatory framework for the
while at the same time leaving
provide the clients with the
clients the reasons
for the advice
provision of investment advice,
choice to investment firms and
periodic assessment of the
provided to them.
while at the same time leaving
clients
, it is appropriate to require
suitability of the financial
choice to investment firms and
investment firms providing
instruments recommended to them.
B. In order to further define the
clients, it is appropriate to establish
investment advice to clarify the
It is also appropriate to require
regulatory framework for the
the conditions for the provisions of
basis of the advice they provide,
investment firms to explain their
provision of investment advice,
this service when firms inform
notably the range of products they
clients the reasons of the advice
while at the same time leaving
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clients that the service is provided
consider in providing personal
provided to them.
Guidelines by
choice to investment firms and
on an independent basis. In order to
recommendations to clients,
ESMA could be useful in ensuring
clients, it is appropriate to establish
strengthen the protection of
whether they provide investment
effective and consistent
the conditions for the provisions of
investors and increase clarity to
advice on an independent basis or
application of these provisions. In
this service when firms inform
clients as to the service they receive,
not and whether they provide the
order to further define the
clients that the service is provided
it is appropriate to further restrict
clients with the periodic assessment
regulatory framework for the
on an independent basis.
the possibility for firms to accept or
of the suitability of the financial
provision of investment advice,
When advice is provided on an
receive inducements from third
instruments recommended to them.
while at the same time leaving
independent basis a sufficient range
parties, and particularly from issuers
In relation to this it is appropriate to
choice to investment firms and
of different product providers’
or product providers, when
establish the conditions for the
clients, it is appropriate to establish
products shall be assessed prior to
providing the service of investment
provision of investment advice
the conditions for the provisions of
making a personal
advice on an independent basis and
when investment firms inform
this service when firms inform
recommendation. It is not necessary
the service of portfolio
clients that the service is provided
clients that the
advice is provided
for the advisor, however, to assess
management. In such cases, only
on an independent basis. When
in conjunction with the
acceptance
investment products available on
limited non-monetary benefits as
advice is provided on an
or receipt of
third-party
the market by all product providers
training on the features of the
independent basis a sufficient range
inducements. When providing
or issuers, but the range of financial
products should be allowed subject
of different product providers’
discretionary portfolio
instruments should not be limited to
to the condition that they do not
products shall be assessed prior to
management, the
investment firm
financial instruments issued or
impair the ability of investment
making a personal
should
, prior to the
agreement,
provided by entities having close
firms to pursue the best interest of
recommendation.
inform the
client about the
links with the investment firm or
their clients, as further clarified in
expected scale of
inducements,
It is not necessary for the advisor,
any other legal or economic
Directive 2006/73/EC.
and periodic reports should
however, to assess investment
relationships, such as contractual
disclose all inducements paid or
products available on the market by
relationship,
so close as to be
received.
Given the need to ensure
all product providers or issuers, but
potentially able to impair the
that such third-party inducements
the range of financial instruments
independent basis of the advice
do not prevent the investment firm
should not be limited to financial
provided.
from acting in the best interests of
instruments issued or provided by
the client, provision should also be
C. In order to strengthen the
entities having close links with the
made to allow under certain
investment firm or any other strict
protection of investors and increase
conditions a prohibition on the
relationships, such as contractual
clarity to clients as to the service
receipt of such inducements or to
relationship, potentially able to
they receive, it is also appropriate
require them to be transferred to
impair the independent basis of the
to further restrict the possibility for
the client.
advice provided. In order to
firms providing the service of
strengthen the protection of
investment advice on an
investors and increase clarity to
independent basis and the service
clients as to the service they
of portfolio management to accept
receive, it is appropriate to further
and retain fees, commissions or
restrict the possibility for firms to
any monetary and non-monetary
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accept and retain fees, commissions
benefits from third parties, and
or any monetary and non-monetary
particularly from issuers or product
benefits from or to third parties,
providers. This implies that
all fees,
and particularly from issuers or
commissions and any monetary
product providers, when providing
benefits paid or provided by a
the service of investment advice on
third party must be returned in
an independent basis and the
full to the client as soon as
service of portfolio management.
possible after receipt of those
[…]
payments by the firm and the
firm should not be allowed to
This implies that an investment
offset any third-party payments
firm that receives fees,
from the fees due by the client to
commissions or any monetary and
the firm. The client should be
non-monetary benefits from a third
accurately and, where relevant,
party while providing the service of
periodically, informed about all
portfolio management or
fees, commissions and benefits
independent investment advice
the firm has received in
must pass on in full any monetary
connection with the investment
benefit received by a third party to
service provided to the client and
a client. Only minor non-monetary
transferred to him. Firms
benefits such as training on the
providing independent advice or
features of the products and, for
portfolio management should
firms providing portfolio
also set up a policy, as part of
management, services related to
their organisational
research should be allowed subject
requirements, to ensure that
to the conditions that they are
third party payments received
clearly disclosed to the client, that
are allocated and transferred to
they are capable of enhancing the
the clients.
quality of the service provided and
that they do not
, or are not likely to,
Only minor non-monetary benefits
impair the ability of investment
should be allowed subject to the
firms to act in the best interest of
conditions that they are clearly
their clients […]. This Directive
disclosed to the client, that they are
provides for conditions and
capable of enhancing the quality of
procedures for Member States to
the service provided and that they
comply with when planning to
do not
, or are not likely to, impair
impose additional requirements.
the ability of investment firms to
Such requirements may include
act in the best interest of their
prohibiting or further restricting the
clients.
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offer or acceptance of fees,
D. When providing the service of
commissions or any monetary or
investment advice on an
non-monetary benefits paid or
independent basis and the service
provided by any third party or a
of portfolio management, fees,
person acting on behalf of a third
commissions or non-monetary
party in relation to the provision of
benefits paid or provided by a
service to clients. Member States
person on behalf of the client are
may retain any requirements
allowed only as far as the person
is
additional to this Directive which
aware that such payments have
have been notified under Article 4
been made on his behalf and that
of Directive 2006/73/EC at the time
the amount and frequency of any
this Directive enters into force. To
payment is agreed between the
protect consumers further, it is
client and the investment firm
appropriate to ensure investment
and not determined by a third
firms do not remunerate or assess
party. Cases which would satisfy
the performance of their staff in a
this requirement include where a
way that conflicts with the firms’
client pays a firm's invoice
duty to act in the best interests of
directly or it is paid by an
their clients, for example by
independent third party who has no
creating a benefit for staff to favour
connection with the investment
recommending or selling one
firm regarding the investment
particular financial instrument
service provided to the client and is
when another product may better
acting only on the instructions of
meet the client’s needs.
the client
and cases where the
client negotiates a fee for a
service provided by an
investment firm and pays that
fee. This would generally be the
case for accountants or lawyers
acting under a clear payment
instruction from the client or where
the person is acting as a mere
conduit for the payment.
E. This Directive provides for
conditions and procedures for
Member States to comply with
when planning to impose additional
requirements. Such requirements
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may include prohibiting or further
restricting the offer or acceptance
of fees, commissions or any
monetary or non-monetary benefits
paid or provided by any third party
or a person acting on behalf of a
third party in relation to the
provision of service to clients.
Note:
1. for clarity purposes recital should
be broken into
A) general info
B) independent advice and range of
financial instruments
C) inducements and non-monetary
benefits
D) clarification of payments on
behalf of the client (this partly
based on CESR guidelines on
inducements and part of Council’s
recital 54a)
E) reference to additional national
requirements
2. last Council idea covered in
recital 52a below as it deals with
remuneration and not inducements.
78.
Rec.
To protect consumers further, it is
(52a) To further protect
Technical group 20140128
52a
appropriate to ensure investment
consumers, it is also appropriate to
(52a) To further protect
(new)
firms do not remunerate or assess
ensure investment firms do not
consumers, it is also appropriate to
the performance of their staff in a
remunerate or assess the
ensure investment firms do not
way that conflicts with the firms’
performance of their own staff in a
remunerate or assess the
duty to act in the best interests of
way that conflicts with the firm's
performance of their own staff in a
their clients, for example by
duty to act in the best interests of
way that conflicts with the firm's
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creating a benefit for staff to favour
their clients. Remuneration of
duty to act in the best interests of
recommending or selling one
staff selling or advising on
their clients, for example
through
particular financial instrument
investments should therefore not
remuneration, sales targets or
when another product may better
be solely dependent on sales
otherwise which incentivise
meet the client’s needs.
targets or the profit to the firm
recommending or selling one
from a specific financial
particular financial instrument
instrument as this would create
when another product may better
incentives to deliver information
meet the client’s needs.
which is not fair, clear and not
misleading and to make
recommendations which are not in
the best interests of clients.
78a
Technical group 20140206
.
Recital was agreed to be included,
see row 565 in table 2B
(52aa) Where sufficient information
in relation to the costs and
associated charges or to the risks in
respect to the financial instrument
or the structured deposit itself is
provided in conformity with other
EU legislation that information
should be regarded as appropriate
for the purposes of providing
information to clients under this
Directive. However, investment
firms or credit institutions
distributing that financial
instrument or structured deposit
should additionally inform their
clients about all the other costs and
associated charges related to their
provision of investment services in
relation to that financial instrument
or structured deposit.
79.
Rec.
(52b) Given the complexity of
Technical group 20140128
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52b
investment products and the
(52b) Given the complexity of
(new)
continuous innovation in their
investment products and the
design, it is also important to
continuous innovation in their
ensure that staff who advise on or
design, it is also important to
sell investment products to retail
ensure that staff who advise on or
clients possess an appropriate level
sell investment products to retail
of knowledge and competence in
clients possess an appropriate level
relation to the products offered.
of knowledge and competence in
Investment firms need to allow
relation to the products offered.
their staff sufficient time and
Investment firms need to allow
resources to achieve this
their staff sufficient time and
knowledge and competence and to
resources to achieve this
apply it in providing services to
knowledge and competence and to
clients.
apply it in providing services to
clients.
Technical group 20140128
80.
Rec. 53
(53) Investment firms are allowed to
[…]
(53) Investment firms are allowed
provide investment services that
to provide investment services that
(53) Investment firms are allowed
only consist of execution and/or the
only consist of execution and/or the
to provide investment services that
reception and transmission of client
reception and transmission of client
only consist of execution and/or the
orders, without the need to obtain
orders, without the need to obtain
reception and transmission of client
information regarding the
information regarding the
orders, without the need to obtain
knowledge and experience of the
knowledge and experience of the
information
regarding
the
client in order to assess the
client in order to assess the
knowledge and experience of the
appropriateness of the service or the
appropriateness of the service or
client in order to assess the
instrument for the client. Since these
the instrument for the client. Since
appropriateness of the service or
services entail a relevant reduction
these services entail a relevant
the instrument for the client. Since
of clients' protections, it is
reduction of clients' protections, it
these services entail a relevant
appropriate to improve the
is appropriate to improve the
reduction of clients' protections, it
conditions for their provision. In
conditions for their provision. In
is appropriate to improve the
particular, it is appropriate to
particular, it is appropriate to
conditions for their provision. In
exclude the possibility to provide
exclude the possibility to provide
particular, it is appropriate to
these services in conjunction with
these services in conjunction with
exclude the possibility to provide
the ancillary service consisting of
the ancillary service consisting of
these services in conjunction with
granting credits or loans to investors
granting credits or loans to
the ancillary service consisting of
to allow them to carry out a
investors to allow them to carry out
granting
credits
or
loans
to
transaction in which the investment
a transaction in which the
investors to allow them to carry out
firm is involved, since this increases
investment firm is involved, since
a
transaction
in
which
the
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Compromise
the complexity of the transaction
this increases the complexity of the
investment firm is involved, since
and makes more difficult the
transaction and makes more
this increases the complexity of the
understanding of the risk involved.
difficult the understanding of the
transaction
and
makes
more
It is also appropriate to better define
risk involved. It is also appropriate
difficult the understanding of the
the criteria for the selection of the
to better define the criteria for the
risk involved. It is also appropriate
financial instruments to which these
selection of the financial
to better define the criteria for the
services should relate in order to
instruments to which these services
selection
of
the
financial
exclude the financial instruments,
should relate in order to exclude the
instruments to which these services
including collective investment in
financial instruments which embed
should relate in order to exclude the
transferable securities (UCITS),
a derivative
unless that derivative
financial
instruments,
which embed a derivative or
does not increase the risk to the
includingthose
which embed a
incorporate a structure which makes
client, or incorporate a structure
derivative or incorporate a structure
it difficult for the client to
which makes it difficult for the
which makes it difficult for the
understand the risk involved.
client to understand the risk
client to understand the risk
involved.
involved,
shares in non-UCITS
collective
investment
undertakingsand
structured
UCITS as referred to in Article
36(1)
subparagraph
2
of
Commission
Regulation
583/2010.
The
treatment
of
certain
UCITS
as
complex
products is without prejudice to
future Union legislation defining
the scope of and the rules
applicable to such products.
81.
Rec. 54
(54) Cross-selling practices are a
[…]
(54) Cross-selling practices are a
Technical group 20140128
common strategy for retail financial
common strategy for retail financial
(54) Cross-selling practices are a
service providers throughout the
service providers throughout the
common strategy for retail financial
Union. They can provide benefits to
European Union. They can provide
service providers throughout the
retail clients but can also represent
benefits to retail clients but can also
EuropeanUnion. They can provide
practices where the interest of the
represent practices where the
benefits to retail clients but can also
client is not adequately considered.
interest of the client is not
represent practices where the
For instance, certain forms of cross-
adequately considered. For
interest of the client is not
selling practices, namely tying
instance, certain forms of cross-
adequately considered. For
practices where two or more
selling practices, namely tying
instance, certain forms of cross-
financial services are sold together
practices where two or more
selling practices, namely tying
in a package and at least one of
financial services are sold together
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those services is not available
in a package and at least one of
practices where two or more
separately, can distort competition
those services is not available
financial services are sold together
and negatively affect clients'
separately, can distort competition
in a package and at least one of
mobility and their ability to make
and negatively affect clients'
those services is not available
informed choices. An example of
mobility and their ability to make
separately, can distort competition
tying practices can be the necessary
informed choices. An example of
and negatively affect clients'
opening of current accounts when
tying practices can be the necessary
mobility and their ability to make
an investment service is provided to
opening of current accounts when
informed choices. An example of
a retail client. While practices of
an investment service is provided to
tying practices can be the necessary
bundling, where two or more
a retail client. While practices of
opening of current accounts when
financial services are sold together
bundling, where two or more
an investment service is provided to
in a package, but each of the
financial services are sold together
a retail client. While practices of
services can also be purchased
in a package, but each of the
bundling, where two or more
separately, may also distort
services can also be purchased
financial services are sold together
competition and negatively affect
separately, may also distort
in a package, but each of the
customer mobility and clients'
competition and negatively affect
services can also be purchased
ability to make informed choices,
customer mobility and clients'
separately, may also distort
they at least leave choice to the
ability to make informed choices,
competition and negatively affect
client and may therefore pose less
they at least leave choice to the
customer mobility and clients'
risk to the compliance of investment
client and may therefore pose less
ability to make informed choices,
firms with their obligations under
risk to the compliance of
they at least leave choice to the
this directive. The use of such
investment firms with their
client and may therefore pose less
practices should be carefully
obligations under this
Directive.
risk to the compliance of
assessed in order to promote
The use of such practices should be
investment firms with their
competition and consumer choice.
carefully assessed in order to
obligations under this Directive.
promote competition and consumer
The use of such practices should be
choice.
carefully assessed in order to
promote competition and consumer
choice.
82.
Rec.
(52a) When providing investment
Technical group 20140128
52a
advice, the investment firm should
(52a) When providing investment
(new)
specify in a written statement on
advice, the investment firm should
[Council]
suitability how the advice given
specify in a written statement on
meets the preferences, needs and
suitability how the advice given
other characteristics of the retail
meets the preferences, needs and
client. The statement must be
other characteristics of the retail
provided in a durable medium
client. The statement must be
including electronic form and does
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not have to be signed in person by
provided in a durable medium
the advisor.
including electronic form .
The
responsibility to undertake the
suitability assessment and to
provide an accurate suitability
report to the client lies with the
investment firm and appropriate
safeguards should be in place to
ensure that the client does not
lose out as a result of the report
presenting in an inaccurate or
unfair manner the personal
recommendation, including how
the recommendation provided is
suitable for the client and what
the disadvantages of the
recommended course of action
are.
Note: concerns in relation to
written minutes could also be
transposed to the written suitability
report. Some national with
suitability reports in writing have
revealed a potential risk for
investors that written suitability
reports are used against the client.
We therefore suggest that recital
52a on suitability reports could
clarify (similar to the one
introduced for written minutes
where accepted as an alternative to
telephone recordings) that clients
do not lose out as a result of the
suitability reports.
+ numbering of the paras might
need to be changed as indeed this
sits better after recital 52
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83.
Rec. 53
(53) In determining what
Technical group 20140128
[Council]
constitutes the provision of
(53) In determining what
information in good time before a
constitutes the provision of
time specified in this Directive, an
information in good time before a
investment firm should take into
time specified in this Directive, an
account, having regard to the
investment firm should take into
urgency of the situation, the client's
account, having regard to the
need for sufficient time to read and
urgency of the situation, the client's
understand it before taking an
need for sufficient time to read and
investment decision. A client is
understand it before taking an
likely to require more time to
investment decision. A client is
review information given on a
likely to require more time to
complex or unfamiliar product or
review information given on a
service, or a product or service a
complex or unfamiliar product or
client has no experience with than a
service, or a product or service a
client considering a simpler or
client has no experience with than a
more familiar product or service, or
client considering a simpler or
where the client has relevant prior
more familiar product or service, or
experience.
where the client has relevant prior
experience.
84.
Rec. 54
(54) Nothing in this Directive
Technical group 20140128
[Council]
obliges investment firms to provide
(54) Nothing in this Directive
all required information about the
obliges investment firms to provide
investment firm, financial
all required information about the
instruments, costs and associated
investment firm, financial
charges, or concerning the
instruments, costs and associated
safeguarding of client financial
charges, or concerning the
instruments or client funds
safeguarding of client financial
immediately and at the same time,
instruments or client funds
provided that they comply with the
immediately and at the same time,
general obligation to provide the
provided that they comply with the
relevant information in good time
general obligation to provide the
before the time specified in this
relevant information in good time
Directive. Provided that the
before the time specified in this
information is communicated to the
Directive. Provided that the
client in good time before the
information is communicated to the
provision of the service, nothing in
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this Directive obliges firms to
client in good time before the
provide it either separately or by
provision of the service, nothing in
incorporating the information in a
this Directive obliges firms to
client agreement.
provide it either separately or by
incorporating the information in a
client agreement.
85.
Rec.
(54a) When arranging payment for
Technical group 20140128
54a
investment advice that it is
[…]
(new)
provided on an independent basis,
[Council]
acceptable payments are limited to
Included in recital 52 above.
those which are paid or provided by
or on behalf of the client. While
third parties such as banks may be
involved in transferring money
from clients to advisers, it is
important that such firms do so
only on the instructions of the client
– the amount and frequency of any
payments for the services of the
firm giving investment advice must
not be determined by a third party,
but must be agreed between the
client and the firm providing
investment advice.
86.
Rec. 55
(55) A service should be considered
(55) A service should be considered
(55) A service should be considered
Technical group 20140129
to be provided at the initiative of a
to be provided at the own exclusive
to be provided at the initiative of a
Deletion of “own exclusive” below
client unless the client demands it in
initiative of a client unless the
client unless the client demands it
to align with language used in
response to a personalised
client demands it in response to a
in response to a personalised
Article 25.
communication from or on behalf of
personalised communication from
communication from or on behalf
the firm to that particular client,
or on behalf of the firm to that
of the firm to that particular client,
Agreed silence procedure
which contains an invitation or is
particular client, which contains an
which contains an invitation or is
20131008
intended to influence the client in
invitation or is intended to
intended to influence the client in
["own exclusive initiative" used in
respect of a specific financial
influence the client in respect of a
respect of a specific financial
EP text in MiFIR row 519 and
instrument or specific transaction. A
specific financial instrument or
instrument or specific transaction.
Council MiFID row 840]
service can be considered to be
specific transaction. A service can
A service can be considered to be
provided at the initiative of the
be considered to be provided at the
provided at the initiative of the
(55) A service should be considered
client notwithstanding that the client
own exclusive initiative of the
client notwithstanding that the
to be provided at the initiative of a
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demands it on the basis of any
client notwithstanding that the
client demands it on the basis of
client unless the client demands it
communication containing a
client demands it on the basis of
any communication containing a
in response to a personalised
promotion or offer of financial
any communication containing a
promotion or offer of financial
communication from or on behalf
instruments made by any means that
promotion or offer of financial
instruments made by any means
of the firm to that particular client,
by its very nature is general and
instruments made by any means
that by its very nature is general
which contains an invitation or is
addressed to the public or a larger
that by its very nature is general
and addressed to the public or a
intended to influence the client in
group or category of clients or
and addressed to the public or a
larger group or category of clients
respect of a specific financial
potential clients.
larger group or category of clients
or potential clients.
instrument or specific transaction.
or potential clients.
A service can be considered to be
provided at the initiative of the
client notwithstanding that the
client demands it on the basis of
any communication containing a
promotion or offer of financial
instruments made by any means
that by its very nature is general
and addressed to the public or a
larger group or category of clients
or potential clients.
87.
Rec. 56
(56) One of the objectives of this
(56) One of the objectives of this
(56) One of the objectives of this
Agreed
silence
procedure
Directive is to protect investors.
Directive is to protect investors.
Directive is to protect investors.
20131008
Measures to protect investors should
Measures to protect investors
Measures to protect investors
(56) One of the objectives of this
be adapted to the particularities of
should be adapted to the
should be adapted to the
Directive is to protect investors.
each category of investors (retail,
particularities of each category of
particularities of each category of
Measures to protect investors
professional and counterparties).
investors (retail, professional and
investors (retail, professional and
should be adapted to the
However, in order to enhance the
counterparties). However, in order
counterparties). However, in order
particularities of each category of
regulatory framework applicable to
to enhance the regulatory
to enhance the regulatory
investors (retail, professional and
the provision of services
framework applicable to the
framework applicable to the
counterparties). However, in order
irrespective of the categories of
provision of services irrespective of
provision of services irrespective of
to enhance the regulatory
clients concerned, it is appropriate
the categories of clients concerned,
the categories of clients concerned,
framework applicable to the
to make it clear that principles to act
it is appropriate to make it clear
it is appropriate to make it clear
provision of services irrespective of
honestly, fairly and professionally
that principles to act honestly, fairly
that principles to act honestly, fairly
the categories of clients concerned,
and the obligation to be fair, clear
and professionally and the
and professionally and the
it is appropriate to make it clear
and not misleading apply to the
obligation to be fair, clear and not
obligation to be fair, clear and not
that principles to act honestly, fairly
relationship with any clients.
misleading apply to the relationship
misleading apply to the relationship
and professionally and the
with any clients.
with any clients.
obligation to be fair, clear and not
misleading apply to the relationship
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with any clients.
87a
Trilogue 20140114: agreed to
.
include recital below subject to
technical
comments
on
third
sentence.
Location
to
be
confirmed.
Technical group 20140129: Pres.
requested to change "the same
conduct of business standards" and
delete "detailed". EP tech team
could not accept. Left open.
(57)
Investments
that
involve
contracts of insurance are often
made available to customers as
potential alternatives or substitutes
to financial instruments subject to
this Directive. To deliver consistent
protection for retail clients and
insure a level playing field between
similar products, it is important that
insurance-based
investment
products are subject to
appropriate
requirements the same conduct of
business standards, in particular
those relating to restrictions on
detailed information requirements,
inducements, product governance
and rules on ensuring the suitability
of advice or appropriateness of
non-advised sales.
Whereas the
investor protection requirements
in this Directive should therefore
be applied equally to those
investments
packaged
under
insurance
contracts,
their
different market structures and
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Compromise
product characteristics make it
more
appropriate
that
the
detailed requirements are set out
in the ongoing review of Directive
2002/92/EC of the European
Parliament and of the Council of
9 December 2002 on insurance
mediation rather than setting
them in this Directive.
Future
Union legislation regulating the
activities
of
insurance
intermediaries
and
insurance
undertakings
should
thus
appropriately ensure a consistent
regulatory approach concerning the
distribution of different financial
products which satisfy similar
investor needs and therefore raise
comparable
investor
protection
challenges. EIOPA and ESMA
should work together to achieve as
much consistency as possible in the
conduct of business standards for
these investment products.
These
new
requirements
for
insurance-based
investment
products should be laid down in
Directive 2002/92/EC.
(116) In order to align the rules
pertaining to conflicts of interests,
general principles and information
to customers and to allow Member
States to place restrictions on the
remuneration
of
insurance
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Compromise
intermediaries,
Directive
2002/92/EC57 should be amended
accordingly.
(117)
(new)
Insurance-based
investment products that do not
offer investment opportunities and
deposits solely exposed to interest
rates should be excluded from the
scope of this Directive. Individual
and occupational pension products,
having the primary purpose of
providing the investor an income in
retirement, are excluded from the
scope
of
this
Directive,
in
consideration of their peculiarities
and objectives.
Techncial group 20140206
At Pres. request text above in
Recital 57 amended. Pres. to test
wording proposed by EP.
Commission suggest to use instead
“equivalent conduct of business
standards”
20140207
Pres. agrees with the wording
above.
88.
Rec. 57
(57) By way of derogation from the
(57) By way of derogation from the
(57) By way of derogation from the
Agreed
silence
procedure
principle of home country
principle of Home Member State
principle of home country
20131008
authorisation, supervision and
authorisation, supervision and
authorisation, supervision and
(57) By way of derogation from the
enforcement of obligations in
enforcement of obligations in
enforcement of obligations in
principle of home Member State
respect of the operation of branches,
respect of the operation of
respect of the operation of
authorisation, supervision and
it is appropriate for the competent
branches, it is appropriate for the
branches, it is appropriate for the
57 Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002, (OJ L 9, 15.1.2003, p.3)
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authority of the host Member State
competent authority of the Host
competent authority of the host
enforcement of obligations in
to assume responsibility for
Member State to assume
Member State to assume
respect of the operation of
enforcing certain obligations
responsibility for enforcing certain
responsibility for enforcing certain
branches, it is appropriate for the
specified in this Directive in relation
obligations specified in this
obligations specified in this
competent authority of the host
to business conducted through a
Directive in relation to business
Directive in relation to business
Member State to assume
branch within the territory where the
conducted through a branch within
conducted through a branch within
responsibility for enforcing certain
branch is located, since that
the territory where the branch is
the territory where the branch is
obligations specified in this
authority is closest to the branch,
located, since that authority is
located, since that authority is
Directive in relation to business
and is better placed to detect and
closest to the branch, and is better
closest to the branch, and is better
conducted through a branch within
intervene in respect of
placed to detect and intervene in
placed to detect and intervene in
the territory where the branch is
infringements of rules governing the
respect of infringements of rules
respect of infringements of rules
located, since that authority is
operations of the branch.
governing the operations of the
governing the operations of the
closest to the branch, and is better
branch.
branch.
placed to detect and intervene in
respect of infringements of rules
governing the operations of the
branch.
89.
Rec. 58
(58) It is necessary to impose an
(58) It is necessary to impose an
(58) It is necessary to impose an
Agreed
silence
procedure
effective ‘best execution’ obligation
effective ‘best execution’
effective ‘best execution’
20131008
to ensure that investment firms
obligation to ensure that investment
obligation to ensure that
(58) It is necessary to impose an
execute client orders on terms that
firms execute client orders on terms
investment firms execute client
effective ‘best execution’
are most favourable to the client.
that are most favourable to the
orders on terms that are most
obligation to ensure that
This obligation should apply to the
client. This obligation should apply
favourable to the client. This
investment firms execute client
firm which owes contractual or
to the firm which owes contractual
obligation should apply to the firm
orders on terms that are most
agency obligations to the client.
or agency obligations to the client.
which owes contractual or agency
favourable to the client, including
obligations to the client.
by ensuring that investment firms
are not remunerated for routing
client orders to a particular trading
venue or execution venue unless
this is compatible with their
obligations in relation to conflicts
of interest, inducements and best
execution. This obligation should
apply to the firm which owes
contractual or agency obligations to
the client.
Technical group 20140206
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Modification made above at the
request of Parliament
20140211
Trilogue parties agree to undo the
change made by the Technical
group on 6 Febr. Recital 58 thus
reads:
(58) It is necessary to impose an
effective
‘best
execution’
obligation
to
ensure
that
investment firms execute client
orders on terms that are most
favourable to the client. This
obligation should apply to the
firm which owes contractual or
agency obligations to the client.
90.
Rec.
(58a) In order to contribute to a
Technical group 20140128
58a
wider shareholder base across the
(58a) Given that a wider range of
(new)
Union, the best execution
execution venues are now available
framework should be enhanced for
in the Union, it is appropriate to
retail investors so they can access
enhance the best execution
the wider range of execution
framework for retail investors.
venues that are now available
Advances in technology for
across the Union. Advances in
monitoring best execution should
technology for monitoring best
be considered when applying the
execution should be considered
best execution framework.
when applying the best execution
framework.
20140211
Trilogue parties agree on the
following:
(58a (new)) Given that a wider
range of execution venues are
now available in the Union, it is
appropriate to enhance the best
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execution framework for retail
investors.
Advances
in
technology for monitoring best
execution should be considered
when
applying
the
best
execution framework in line
with Art. 27 – para 1 –
subpara 1a (new) [row 619].
90a
Technical group 20140128 / 29
.
[Note: previously agreed to include
recitals 71 to 73 of current MiFID
implementing directive at Council
request in connection with change
to Art 27, row 619](58b) For the
purposes of determining best
execution when executing retail
client orders, the costs related to
execution should include an
investment firm's own commissions
or fees charged to the client for
limited purposes, in cases where
more than one venue listed in the
firm's execution policy is capable of
executing a particular order. In
such cases, the firm's own
commissions and costs for
executing the order on each of the
eligible execution venues should be
taken into account in order to
assess and compare the results for
the client that would be achieved by
executing the order on each such
venue. However, it is not intended
to require a firm to compare the
results that would be achieved for
its client on the basis of its own
execution policy and its own
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commissions and fees, with results
that might be achieved for the same
client by any other investment firm
on the basis of a different execution
policy or a different structure of
commissions or fees. Nor is it
intended to require a firm to
compare the differences in its own
commissions which are attributable
to differences in the nature of the
services that the firm provides to
clients.
(58c) The provisions of this
Directive that provide that costs of
execution should include an
investment firm's own commissions
or fees charged to the client for the
provision of an investment service
should not apply for the purpose of
determining what execution venues
must be included in the firm's
execution policy for the purposes of
Article 27(4) of MiFID (old Article
21(3) of Directive 2004/39/EC).
(58d) It should be considered that
an investment firm structures or
charges its commissions in a way
which discriminates unfairly
between execution venues if it
charges a different commission or
spread to clients for execution on
different execution venues and that
difference does not reflect actual
differences in the cost to the firm of
executing on those venues.
91.
Rec. 59
(59) In order to enhance the
(59) In order to enhance the
(59) In order to enhance the
Agreed
silence
procedure
conditions under which investment
conditions under which investment
conditions under which investment
20131008
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firms comply with their obligation
firms comply with their obligation
firms comply with their obligation
(59) In order to enhance the
to execute orders on terms most
to execute orders on terms most
to execute orders on terms most
conditions under which investment
favourable to their clients in
favourable to their clients in
favourable to their clients in
firms comply with their obligation
accordance with this Directive, it is
accordance with this Directive, it is
accordance with this Directive, it is
to execute orders on terms most
appropriate to require execution
appropriate to require execution
appropriate to require execution
favourable to their clients in
venues to make available to the
venues to make available to the
venues to make available to the
accordance with this Directive, it is
public data relating to the quality of
public data relating to the quality of
public data relating to the quality of
appropriate to require execution
execution of transactions on each
execution of transactions on each
execution of transactions on each
venues to make available to the
venue.
venue.
venue.
public data relating to the quality of
execution of transactions on each
venue.
Note: wording of this recital needs
to be adapted in light of final
agreement on row 621
In order to enhance the conditions
under which investment firms
comply with their obligation to
execute orders on terms most
favourable to their clients in
accordance with this Directive, it is
appropriate to require
that for
instruments subject to the
trading obligation in Articles 20c
and 24 MiFIR that each trading
venue and systematic internaliser
and for other instruments that
each execution venue
s makes
available to the public data relating
to the quality of execution of
transactions on each venue.
Technical group 20140206
Text completed above
92.
Rec. 60
(60) Information provided by
(60) Information provided by
(60) Information provided by
Technical group 20140128
investment firms to clients in
investment firms to clients in
investment firms to clients in
(60) Information provided by
relation to their order execution
relation to their […] execution
relation to their order execution
investment firms to clients in
policies often are generic and
policy often are generic and
policies often are generic and
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standard and do not allow clients to
standard and do not allow clients to
standard and do not allow clients to
relation to their […] execution
understand how an order will be
understand how an order will be
understand how an order will be
policy often are generic and
executed and to verify firms'
executed and to verify firms'
executed and to verify firms'
standard and do not allow clients to
compliance with their obligation to
compliance with their obligation to
compliance with their obligation to
understand how an order will be
execute orders on term most
execute orders on term most
execute orders on term most
executed and to verify firms'
favourable to their clients. In order
favourable to their clients. In order
favourable to their clients. In order
compliance with their obligation to
to enhance investor protection it is
to enhance investor protection it is
to enhance investor protection it is
execute orders on term most
appropriate to specify the principles
appropriate to specify the principles
appropriate to specify the principles
favourable to their clients. In order
concerning the information given by
concerning the information given
concerning the information given
to enhance investor protection it is
investment firms to their clients on
by investment firms to their clients
by investment firms to their clients
appropriate to specify the principles
the order execution policies and to
on the […] execution policy and to
on the order execution policies and
concerning the information given
require firms to make public, on an
require firms to make public, on an
to require firms to make public, on
by investment firms to their clients
annual basis, for each class of
annual basis, for each class of
a quarterly basis, for each class of
on the […] execution policy and to
financial instruments, the top five
financial instruments, the top five
financial instruments, the top five
require firms to make public, on an
execution venues where they
execution venues where they
execution venues where they
annual basis, for each class of
executed client orders in the
executed client orders in the
executed client orders in the
financial instruments, the top five
preceding year.
preceding year.
preceding year
and to take account
execution venues where they
of that information and
executed client orders in the
information published by trading
preceding year
and to take account
venues on execution quality in
of that information and
their policies on best execution.
information published by
execution venues on execution
quality in their policies on best
execution.
Note: cf comment above on recital
59 and the use of trading venues
93.
Rec. 61
(61) When establishing the business
(61) When establishing the business
▌
Technical group 20140128
relationship with the client the
relationship with the client
, the
(61) When establishing the business
investment firm might ask the client
investment firm might ask the
relationship with the client
, the
or potential client to consent at the
client or potential client to consent
investment firm might ask the
same time to the execution policy as
at the same time to the execution
client or potential client to consent
well as to the possibility that his
policy as well as to the possibility
at the same time to the execution
orders may be executed outside a
that his orders may be executed
policy as well as to the possibility
regulated market MTF, OTF or
outside a regulated market
, MTF,
that his orders may be executed
systematic internaliser.
OTF or systematic internaliser.
outside a regulated market
, MTF,
OTF or systematic internaliser.
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Note: to be kept, cf row 625
94.
Rec. 62
(62) Persons who provide
(62) Persons who provide
(62) Persons who provide
Agreed
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investment services on behalf of
investment services on behalf of
investment services on behalf of
20131008
more than one investment firm
more than one investment firm
more than one investment firm
(62) Persons who provide
should not be considered as tied
should not be considered as tied
should not be considered as tied
investment services on behalf of
agents but as investment firms when
agents but as investment firms
agents but as investment firms
more than one investment firm
they fall under the definition
when they fall under the definition
when they fall under the definition
should not be considered as tied
provided in this Directive, with the
provided in this Directive, with the
provided in this Directive, with the
agents but as investment firms
exception of certain persons who
exception of certain persons who
exception of certain persons who
when they fall under the definition
may be exempted.
may be exempted.
may be exempted.
provided in this Directive, with the
exception of certain persons who
may be exempted.
95.
Rec. 63
(63) This Directive should be
(63) This Directive should be
(63) This Directive should be
Agreed
silence
procedure
without prejudice to the right of tied
without prejudice to the right of
without prejudice to the right of
20131008
agents to undertake activities
tied agents to undertake activities
tied agents to undertake activities
(63) This Directive should be
covered by other Directives and
covered by other Directives and
covered by other Directives and
without prejudice to the right of
related activities in respect of
related activities in respect of
related activities in respect of
tied agents to undertake activities
financial services or products not
financial services or products not
financial services or products not
covered by other Directives and
covered by this Directive, including
covered by this Directive, including
covered by this Directive, including
related activities in respect of
on behalf of parts of the same
on behalf of parts of the same
on behalf of parts of the same
financial services or products not
financial group.
financial group.
financial group.
covered by this Directive, including
on behalf of parts of the same
financial group.
96.
Rec. 64
(64) The conditions for conducting
(64) The conditions for conducting
(64) The conditions for conducting
Agreed
silence
procedure
activities outside the premises of the
activities outside the premises of
activities outside the premises of
20131008
investment firm (door-to-door
the investment firm (door-to-door
the investment firm (door-to-door
(64) The conditions for conducting
selling) should not be covered by
selling) should not be covered by
selling) should not be covered by
activities outside the premises of
this Directive.
this Directive.
this Directive.
the investment firm (door-to-door
selling) should not be covered by
this Directive.
97.
Rec. 65
(65) Member States' competent
(65) Member States' competent
(65) Member States' competent
Agreed
silence
procedure
authorities should not register or
authorities should not register or
authorities should not register or
20131008
should withdraw the registration
should withdraw the registration
should withdraw the registration
(65) Member States' competent
where the activities actually carried
where the activities actually carried
where the activities actually carried
authorities should not register or
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on indicate clearly that a tied agent
on indicate clearly that a tied agent
on indicate clearly that a tied agent
should withdraw the registration
has opted for the legal system of one
has opted for the legal system of
has opted for the legal system of
where the activities actually carried
Member State for the purpose of
one Member State for the purpose
one Member State for the purpose
on indicate clearly that a tied agent
evading the stricter standards in
of evading the stricter standards in
of evading the stricter standards in
has opted for the legal system of
force in another Member State
force in another Member State
force in another Member State
one Member State for the purpose
within the territory of which it
within the territory of which it
within the territory of which it
of evading the stricter standards in
intends to carry on or does carry on
intends to carry on or does carry on
intends to carry on or does carry on
force in another Member State
the greater part of its activities.
the greater part of its activities.
the greater part of its activities.
within the territory of which it
intends to carry on or does carry on
the greater part of its activities.
98.
Rec. 66
(66) For the purposes of this
(66) For the purposes of this
(66) For the purposes of this
Agreed
silence
procedure
Directive eligible counterparties
Directive eligible counterparties
Directive eligible counterparties
20131008
should be considered as acting as
should be considered as acting as
should be considered as acting as
(66) For the purposes of this
clients.
clients.
clients.
Directive eligible counterparties
should be considered as acting as
clients.
99.
Rec. 67
(67) The financial crisis has shown
(67) The financial crisis has shown
(67) The financial crisis has shown
Technical group 20140128
limits in the ability of non-retail
limits in the ability of non-retail
limits in the ability of non-retail
(67) The financial crisis has shown
clients to appreciate the risk of their
clients to appreciate the risk of their
clients to appreciate the risk of their
limits in the ability of non-retail
investments. While it should be
investments. While it should be
investments. While it should be
clients to appreciate the risk of their
confirmed that conduct of business
confirmed that conduct of business
confirmed that conduct of business
investments. While it should be
rules should be enforced in respect
rules should be enforced in respect
rules should be enforced in respect
confirmed that conduct of business
of those investors most in need of
of those investors most in need of
of those investors most in need of
rules should be enforced in respect
protection, it is appropriate to better
protection, it is appropriate to better
protection, it is appropriate to better
of those investors most in need of
calibrate the requirements
calibrate the requirements
calibrate the requirements
protection, it is appropriate to better
applicable to different categories of
applicable to different categories of
applicable to different categories of
calibrate the requirements
clients. To this extent, it is
clients. To this extent, it is
clients. To this extent, it is
applicable to different categories of
appropriate to extend some
appropriate to extend some
appropriate to extend some
clients. To this extent, it is
information and reporting
information and reporting
information and reporting
appropriate to extend some
requirements to the relationship
requirements to the relationship
requirements to the relationship
information and reporting
with eligible counterparties. In
with eligible counterparties. In
with eligible counterparties. In
requirements to the relationship
particular, the relevant requirements
particular, the relevant
particular, the relevant
with eligible counterparties. In
should relate to the safeguarding of
requirements should relate to the
requirements should relate to the
particular, the relevant
client financial instruments and
safeguarding of client financial
safeguarding of client financial
requirements should relate to the
monies as well as information and
instruments and funds as well as
instruments and monies as well as
safeguarding of client financial
reporting requirements concerning
information and reporting
information and reporting
instruments and funds as well as
more complex financial instruments
requirements concerning more
requirements concerning more
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and transaction. In order to better
complex financial instruments and
complex financial instruments and
information and reporting
define the classification of
transaction. In order to better define
transaction. In order to better
requirements concerning more
municipalities and local public
the classification of municipalities
reflect the
functions of
complex financial instruments and
authorities, it is appropriate to
and local public authorities, it is
municipalities and local public
transactions. In order to better
clearly exclude them from the list of
appropriate to clearly exclude them
authorities,
which should not be
define the classification of
eligible counterparties and of clients
from the list of eligible
making a business out of
municipalities and local public
who are considered to be
counterparties and of clients who
speculative instruments, it is
authorities, it is appropriate to
professionals while still allowing
are considered to be professionals
appropriate to clearly exclude them
clearly exclude them from the list
these clients to ask a treatment as
while still allowing these clients to
from the list of eligible
of eligible counterparties and of
professional clients on request.
ask a treatment as professional
counterparties and of clients who
clients who are considered to be
clients on request.
are considered to be professionals
professionals while still allowing
while still allowing these clients
to
these clients to ask for treatment as
request treatment as professional
professional clients on request.
clients
where stringent conditions
Note: last part of EP recital not
established by Member States are
needed in light of agreement on
met.
AnnexII (MS
may adopt criteria).
100.
Rec. 68
(68) In respect of transactions
(68) In respect of transactions
(68) In respect of transactions
Agreed
silence
procedure
executed between eligible
executed between eligible
executed between eligible
20131008
counterparties, the obligation to
counterparties, the obligation to
counterparties, the obligation to
(68) In respect of transactions
disclose client limit orders should
disclose client limit orders should
disclose client limit orders should
executed between eligible
only apply where the counter party
only apply where the counterparty
only apply where the counter party
counterparties, the obligation to
is explicitly sending a limit order to
is explicitly sending a limit order to
is explicitly sending a limit order to
disclose client limit orders should
an investment firm for its execution.
an investment firm for its
an investment firm for its
only apply where the counter party
execution.
execution.
is explicitly sending a limit order to
an investment firm for its
execution.
101.
Rec. 69
(69) Member States shall protect the
(69) Member States shall protect
▌
Technical group 20140128
right to privacy of natural persons
the right to privacy of natural
(69) Member States should ensure
with respect to the processing of
persons with respect to the
the respect of the right to the
personal data in accordance with
processing of personal data in
protection of pesonal data in
Directive 95/46/EC of the
accordance with Directive
accordance with Directive
European Parliament and of the
95/46/EC of the European
95/46/EC of the European
Council of 24 October 1995 on the
Parliament and of the Council of 24
Parliament and of the Council of 24
protection of individuals with regard
October 1995 on the protection of
October 1995 on the protection of
to the processing of personal data
individuals with regard to the
individuals with regard to the
and of the free movement of such
processing of personal data and of
processing of personal data and of
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data.58
the free movement of such data
1816.
the free movement of such data and
Direcetive 2002/58/EC of the
European Parliament and of the
Council of 12 July 2002 concerning
the processing of personal data and
the protection of privacy in the
electronic communications sector
(Directive on privacy and electronic
communications)59 which govern
the processing of personal data
carried out in application of this
Directive. Processing of personal
data by ESMA in the application of
this Directive is subject to
Regulation (EU) No 45/2001 of the
European Parliament and of the
Council of 18 December 2000 on
the protection of individuals with
regard to the processing of personal
data by the Community institutions
and bodies and on the free
movement of such data60.
Note: see note included above
under recitals 41 and 43.
102.
Rec. 70
(70) Investment firms should all
(70) Investment firms should all
(70) Investment firms should all
Agreed
silence
procedure
have the same opportunities of
have the same opportunities of
have the same opportunities of
20131008
joining or having access to regulated
joining or having access to
joining or having access to
(70) Investment firms should all
markets throughout the Union .
regulated markets throughout the
regulated markets throughout the
have the same opportunities of
Regardless of the manner in which
Union. Regardless of the manner in
European Union. Regardless of the
joining or having access to
transactions are at present organised
which transactions are at present
manner in which transactions are at
regulated markets throughout the
in the Member States, it is important
organised in the Member States, it
present organised in the Member
European Union. Regardless of the
to abolish the technical and legal
is important to abolish the technical
States, it is important to abolish the
manner in which transactions are at
restrictions on access to regulated
and legal restrictions on access to
technical and legal restrictions on
58 OJ L 281, 23.11.1995, p. 31.
1816 OJ L 281, 23.11.1995, p. 31.
59 OJ L 201 , 31.7.2002, p. 37
60 OJ L 8, 12.1.2001, p. 1.
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markets.
regulated markets.
access to regulated markets.
present organised in the Member
States, it is important to abolish the
technical and legal restrictions on
access to regulated markets.
103.
Rec. 71
(71) In order to facilitate the
(71) In order to facilitate the
(71) In order to facilitate the
Agreed
silence
procedure
finalisation of cross-border
finalisation of cross-border
finalisation of cross-border
20131008
transactions, it is appropriate to
transactions, it is appropriate to
transactions, it is appropriate to
(71) In order to facilitate the
provide for access to clearing and
provide for access to clearing and
provide for access to clearing and
finalisation of cross-border
settlement systems throughout the
settlement systems throughout the
settlement systems throughout the
transactions, it is appropriate to
Union by investment firms,
Union by investment firms,
European Union by investment
provide for access to clearing and
irrespective of whether transactions
irrespective of whether transactions
firms, irrespective of whether
settlement systems throughout the
have been concluded through
have been concluded through
transactions have been concluded
European Union by investment
regulated markets in the Member
regulated markets in the Member
through regulated markets in the
firms, irrespective of whether
State concerned. Investment firms
State concerned. Investment firms
Member State concerned.
transactions have been concluded
which wish to participate directly in
which wish to participate directly in
Investment firms which wish to
through regulated markets in the
other Member States' settlement
other Member States' settlement
participate directly in other
Member State concerned.
systems should comply with the
systems should comply with the
Member States' settlement systems
Investment firms which wish to
relevant operational and commercial
relevant operational and
should comply with the relevant
participate directly in other
requirements for membership and
commercial requirements for
operational and commercial
Member States' settlement systems
the prudential measures to uphold
membership and the prudential
requirements for membership and
should comply with the relevant
the smooth and orderly functioning
measures to uphold the smooth and
the prudential measures to uphold
operational and commercial
of the financial markets.
orderly functioning of the financial
the smooth and orderly functioning
requirements for membership and
markets.
of the financial markets.
the prudential measures to uphold
the smooth and orderly functioning
of the financial markets.
104.
Rec. 72
(72) The provision of services by
(72) The provision of services by
(72) The provision of services by
Technical group 20140128: text
third country firms in the Union is
third country firms in the Union is
third-country firms in the
added to align to Articles.
subject to national regimes and
subject to national regimes and
European Union is subject to
Trilogue 20140114: Agreed to
requirements. These regimes are
requirements. These regimes are
national regimes and requirements.
include Pres. non-paper on third
highly differentiated and the firms
highly differentiated and it is
These regimes are highly
countries
authorised in accordance with them
appropriate to introduce a common
differentiated and the firms
do not enjoy the freedom to provide
regulatory framework at Union
authorised in accordance with them
(71a) When implementing the
services and the right of
level. The regime should provide
do not enjoy the freedom to provide
provisions of this Directive,
establishment in Member States
for a level of financial stability
services and the right of
Member States should take due
other than the one where they are
safeguards and protection for
establishment in Member States
account of the recommendations by
established. It is appropriate to
investors in regard of third country
other than the one where they are
the Financial Action Task Force
introduce a common regulatory
firms providing services through
established. It is appropriate to
(FATF) on jurisdictions that have
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framework at Union level. The
the establishment of a branch,
introduce a common regulatory
strategic anti-money laundering
regime should harmonize the
comparable to that for EU firms.
framework at
European Union
and countering the financing of
existing fragmented framework,
level
for third-country firms,
terrorism deficiencies and to which
ensure certainty and uniform
including both investment firms
counter-measures apply or
treatment of third country firms
and market operators.
In order to
jurisdictions with strategic anti-
accessing the Union, ensure that and
provide a basis for third-country
money laundering and countering
equivalence assessment has been
firms to benefit from a passport
the financing of terrorism
carried out by the Commission in
enabling them to provide
deficiencies that have not made
relation to the regulatory and
investment services and carry out
sufficient progress in addressing
supervisory framework of third
investment activities throughout
the deficiencies or have not
countries and should provide for a
the EU, the regime should
committed to an action plan
comparable level of protections to
harmonise the existing fragmented
developed with the FATF to
investors in the EU receiving
framework, ensure certainty and
address the deficiencies;
services by third country firms.
uniform treatment of
third-country
firms accessing the
European
Union, ensure that an
effective
(72) The provision of services by
equivalence assessment
is carried
third-country firms in the
out by the Commission
, prioritising
European Union is subject to
the assessment of the EU's largest
national regimes and
trading partners and areas within
requirements. Firms authorised
the scope of the G20 programme,
in accordance with them do not
in relation to the regulatory and
enjoy the freedom to provide
supervisory framework of third
services and the right of
countries and should provide for a
establishment in Member States
comparable level of protections to
other than the one where they are
investors in the EU receiving
established. Therefore where a
services
provided by
third-country
Member State considers that the
firms.
appropriate level of protection
for its retail clients or retail
clients who have requested to be
treated as professional clients can
be achieved through the
establishment of a branch by the
third country firm it is
appropriate to introduce a
minimum common regulatory
framework at European Union
level with respect to the
requirements applicable to those
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branches and in light of the
principle that third-country firms
should not be treated in a more
favourable way than EU firms.
[…]
105.
Rec. 73
(73) The provision of services to
(73) The provision of investment
(73) The provision of services to
Trilogue 20140114: Agreed to
retail clients should always require
services and/or activities as well as
retail clients
or to clients who have
include Pres. non-paper on third
the establishment of a branch in the
ancillary services to retail clients,
chosen to waive certain protections
countries
Union. The establishment of the
including retail clients who have
in order to be treated as
[…]
branch shall be subject to
requested to be treated as
professional clients should always
authorisation and supervision in the
professional clients in a Member
require the establishment of a
Union. Proper cooperation
State by a third country firm should
branch in the
European Union. The
arrangements should be in place
always require the establishment of
establishment of the branch shall be
between the competent authority
a branch in the Member State. The
subject to authorisation and
concerned and the competent
establishment of the branch shall be
supervision in the
European
authority in the third country.
subject to authorisation and
Union. Proper cooperation
Sufficient initial capital should be at
supervision in that Member State.
arrangements should be in place
free disposal of the branch. Once
Proper cooperation arrangements
between the competent authority
authorised the branch should be
should be in place between the
concerned and the competent
subject to supervision in the
competent authority concerned and
authority in the third country.
Member State where the branch is
the competent authority in the third
Sufficient initial capital should be
established; the third country firm
country. Sufficient initial capital
at free disposal of the branch. Once
should be able to provide services in
should be at free disposal of the
authorised the branch should be
other Member States through the
branch. Once authorised the branch
subject to supervision in the
authorised and supervised branch,
should be subject to supervision in
Member State where the branch is
subject to a notification procedure.
the Member State where the branch
established; the third-country firm
The provision of services without
is established […]
.
should be able to provide services
branches should be limited to
in other Member States through the
eligible counterparties. It should be
authorised and supervised branch,
subject to registration by ESMA and
subject to a notification procedure.
to supervision in the third country.
The provision of services
into the
Proper cooperation arrangements
Union without branches should be
should be in place between ESMA
limited to eligible counterparties
and the competent authorities in the
and professional clients other than
third country.
those who have waived protections
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in order to be treated as
professional clients.
Except where
provided only at the own exclusive
initiative of the client, it should be
subject to registration by ESMA
and to supervision in the third
country. Proper cooperation
arrangements should be in place
between ESMA and the competent
authorities in the third country.
106.
Rec. 74
(74) The provision of this directive
(74) The provision of this Directive
(74) The provision of this
Directive
Trilogue 20140114: Agreed to
regulating the provision of services
regulating the provision of services
regulating the provision of
include Pres. non-paper on third
by third country firms in the Union
by third country firms in the Union
investment services
or activities by
countries
should not affect the possibility for
should not affect the possibility for
third-country firms in the
(74) The provision of this
persons established in the Union to
persons established in the Union to
European Union should not affect
Directive regulating the provision
receive investment services by a
receive investment services by a
the possibility for persons
of investment services or
third country firm at their own
third country firm at their own
established in the Union to receive
activities by third-country firms
exclusive initiative. When a third
exclusive initiative. When a third
investment services by a third-
in the European Union should
country firm provides services at
country firm provides services or
country firm at their own exclusive
not affect the possibility for
own exclusive initiative of a person
engages in activities at the own
initiative.
Where a
third-country
persons established in the Union
established in the Union, the
exclusive initiative of a person
firm provides services at
the own
to receive investment services by
services should not be deemed as
established or situated in the Union,
exclusive initiative of a person
a third-country firm at their own
provided in the territory of the
the services or activities should not
established in the Union, the
exclusive initiative. Where a
Union. In case a third country firm
be deemed as provided in the
services should not be deemed as
third-country firm provides
solicits clients or potential clients in
territory of the Union. After a
provided in the territory of the
services at the own exclusive
the Union or promotes or advertises
person has, at its own exclusive
Union.
Where a
third-country firm
initiative of a person established
investment services or activities
initiative, initiated the provision of
solicits clients or potential clients in
in the Union, the services should
together with ancillary services in
an investment service or activity
the Union or promotes or advertises
not be deemed as provided in the
the Union, it should not be deemed
with a third country firm, the
investment services or activities
territory of the Union. Where a
as a service provided at the own
exemption applies for the duration
together with ancillary services in
third-country firm solicits clients
exclusive initiative of the client.
of their entire relationship in
the Union, it should not be deemed
or potential clients in the Union
respect to that service or activity.
as a service provided at the own
or promotes or advertises
The exemption should not apply in
exclusive initiative of the client.
investment services or activities
relation to the provision of any
together with ancillary services in
other services or activities unless
the Union, it should not be
initiated by a person at their own
deemed as a service provided at
exclusive initiative on the same
the own exclusive initiative of the
basis. In case a third country firm
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solicits clients or potential clients in
client.
the Union or promotes or advertises
investment services or activities
together with ancillary services in
the Union, it should not be deemed
as a service provided at the own
exclusive initiative of the client.
107.
Rec. 75
(75) The authorisation to operate a
(75) The authorisation to operate a
(75) The authorisation to operate a
Technical group 20140128
regulated market should extend to
regulated market should extend to
regulated market should extend to
(75) The authorisation to operate a
all activities which are directly
all activities which are directly
all activities which are directly
regulated market should extend to
related to the display, processing,
related to the display, processing,
related to the display, processing,
all activities which are directly
execution, confirmation and
execution, confirmation and
execution, confirmation and
related to the display, processing,
reporting of orders from the point at
reporting of orders from the point at
reporting of orders from the point at
execution, confirmation and
which such orders are received by
which such orders are received by
which such orders are received by
reporting of orders from the point at
the regulated market to the point at
the regulated market to the point at
the regulated market to the point at
which such orders are received by
which they are transmitted for
which they are transmitted for
which they are transmitted for
the regulated market to the point at
subsequent finalisation, and to
subsequent finalisation, and to
subsequent finalisation, and to
which they are transmitted for
activities related to the admission of
activities related to the admission
activities related to the admission
subsequent finalisation, and to
financial instruments to trading.
of financial instruments to trading.
of financial instruments to trading.
activities related to the admission
This should also include
This should also include
This should also include
of financial instruments to trading.
transactions concluded through the
transactions concluded through the
transactions concluded through the
This should also include
medium of designated market
medium of designated market
medium of designated market
transactions concluded through the
makers appointed by the regulated
makers appointed by the regulated
makers appointed by the regulated
medium of designated market
market which are undertaken under
market which are undertaken under
market which are undertaken under
makers appointed by the regulated
its systems and in accordance with
its systems and in accordance with
its systems and in accordance with
market which are undertaken under
the rules that govern those systems.
the rules that govern those systems.
the rules that govern those systems.
its systems and in accordance with
Not all transactions concluded by
Not all transactions concluded by
Given the importance of market
the rules that govern those systems.
members or participants of the
members or participants of the
makers to the orderly and efficient
Not all transactions concluded by
regulated market, MTF or OTF
regulated market, MTF or OTF are
functioning of markets trading
members or participants of the
are to be considered as concluded
to be considered as concluded
venues should have written
regulated market, MTF or OTF are
within the systems of a regulated
within the systems of a regulated
agreements in place with market
to be considered as concluded
market, MTF or OTF .
market, MTF or OTF. Transactions
makers clarifying their obligations
within the systems of a regulated
Transactions which members or
which members or participants
and ensuring that in all but
market, MTF or OTF. Transactions
participants conclude on a bilateral
conclude on a bilateral basis and
exceptional circumstances they
which members or participants
basis and which do not comply with
which do not comply with all the
fulfil their commitment to provide
conclude on a bilateral basis and
all the obligations established for a
obligations established for a
liquidity to the market. Not all
which do not comply with all the
regulated market, an MTF or an
regulated market, an MTF or an
transactions concluded by members
obligations established for a
OTF under this Directive should be
OTF under this Directive should be
or participants of the regulated
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considered as transactions
considered as transactions
market, MTF or OTF are to be
regulated market, an MTF or an
concluded outside a regulated
concluded outside a regulated
considered as concluded within the
OTF under this Directive should be
market, an MTF or an OTF for the
market, an MTF or an OTF for the
systems of a regulated market,
considered as transactions
purposes of the definition of
purposes of the definition of
MTF or OTF. Transactions which
concluded outside a regulated
systematic internaliser. In such a
systematic internaliser. In such a
members or participants conclude
market, an MTF or an OTF for the
case the obligation for investment
case the obligation for investment
on a bilateral basis and which do
purposes of the definition of
firms to make public firm quotes
firms to make public firm quotes
not comply with all the obligations
systematic internaliser. In such a
should apply if the conditions
should apply if the conditions
established for a regulated market,
case the obligation for investment
established by this Directive are
established by this Directive are
an MTF or an OTF under this
firms to make public firm quotes
met.
met.
Directive should be considered as
should apply if the conditions
transactions concluded outside a
established by this Directive
and
regulated market, an MTF or an
[MiFIR] are met.
OTF for the purposes of the
definition of systematic internaliser.
In such a case the obligation for
investment firms to make public
firm quotes should apply if the
conditions established by this
Directive are met.
108.
(75a) Nothing in this Directive
Technical group 20140128
requires competent authorities to
Note: Intention is to refer to the
approve or examine the content of
specific “market making strategy”
the written agreement between the
referred to in Art 17(4) [row 480],
regulated market and the
which may be used by investment
investment firm that is required
firms which engage in algorithmic
from the participation in a market
trading.
making scheme. However, neither
does it prevent them from doing so,
(75a)
Given the importance of
insofar as any such approval or
liquidity provision to the orderly
examination is based only on the
and efficient functioning of
regulated markets’ compliance with
markets, investment firms that
their obligations under Article 51.
engage in algorithmic trading to
pursue a market making strategy
should have written agreements in
place with trading venues
clarifying their obligations to
provide liquidity to the market.
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(75b) Nothing in this Directive
requires competent authorities to
approve or examine the content of
the written agreement between the
regulated market and the
investment firm that is required
from the participation in a market
making scheme. However, neither
does it prevent them from doing so,
insofar as any such approval or
examination is based only on the
regulated markets’ compliance with
their obligations under Article 51.
109.
Rec. 76
(76) The provision of core market
(76) The provision of core market
(76) The provision of core market
Agreed
silence
procedure
data services which are pivotal for
data services which are pivotal for
data services which are pivotal for
20131008
users to be able to obtain a desired
users to be able to obtain a desired
users to be able to obtain a desired
(76) The provision of core market
overview of trading activity across
overview of trading activity across
overview of trading activity across
data services which are pivotal for
Union markets and for competent
Union markets and for competent
European Union markets and for
users to be able to obtain a desired
authorities to receive accurate and
authorities to receive accurate and
competent authorities to receive
overview of trading activity across
comprehensive information on
comprehensive information on
accurate and comprehensive
European Union markets and for
relevant transactions should be
relevant transactions should be
information on relevant
competent authorities to receive
subject to authorisation and
subject to authorisation and
transactions should be subject to
accurate and comprehensive
regulation to ensure the necessary
regulation to ensure the necessary
authorisation and regulation to
information on relevant
level of quality.
level of quality.
ensure the necessary level of
transactions should be subject to
quality.
authorisation and regulation to
ensure the necessary level of
quality.
110.
Rec. 77
(77) The introduction of approved
(77) The introduction of approved
(77) The introduction of approved
Agreed
silence
procedure
publication arrangements should
publication arrangements should
publication arrangements should
20131008
improve the quality of trade
improve the quality of trade
improve the quality of trade
(77) The introduction of approved
transparency information published
transparency information published
transparency information published
publication arrangements should
in the OTC space and contribute
in the OTC space and contribute
in the OTC space and contribute
improve the quality of trade
significantly to ensuring that such
significantly to ensuring that such
significantly to ensuring that such
transparency information published
data is published in a way
data is published in a way
data is published in a way
in the OTC space and contribute
facilitating its consolidation with
facilitating its consolidation with
facilitating its consolidation with
significantly to ensuring that such
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data published by trading venues.
data published by trading venues.
data published by trading venues.
data is published in a way
facilitating its consolidation with
data published by trading venues.
111.
Rec. 78
(78) The introduction of a
(78) The introduction of a
(78)
Now that a market structure is
Technical group 20140128
commercial solution for a
commercial solution for a
in place which allows for
(78)
Now that a market structure is
consolidated tape for equities should
consolidated tape for equities
competition between multiple
in place which allows for
contribute to creating a more
should contribute to creating a
trading venues it is essential that
competition between multiple
integrated European market and
more integrated European market
an effective and comprehensive
trading venues it is essential that
make it easier for market
and make it easier for market
consolidated tape is in operation
an effective and comprehensive
participants to gain access to a
participants to gain access to a
as soon as possible. The
consolidated tape is in operation
consolidated view of trade
consolidated view of trade
introduction of a commercial
as soon as possible. The
transparency information that is
transparency information that is
solution for a consolidated tape for
introduction of a commercial
available. The envisaged solution is
available. The envisaged solution is
equities
and equity-like
solution for a consolidated tape for
based on an authorisation of
based on an authorisation of
instruments should contribute to
equities
and equity-like
providers working along pre-defined
providers working along pre-
creating a more integrated
instruments should contribute to
and supervised parameters which
defined and supervised parameters
European market and make it easier
creating a more integrated
are in competition with each other
which are in competition with each
for market participants to gain
European market and make it easier
in order to achieve technically
other in order to achieve technically
access to a consolidated view of
for market participants to gain
highly sophisticated and innovative
highly sophisticated and innovative
trade transparency information that
access to a consolidated view of
solutions, serving the market to the
solutions, serving the market to the
is available. The envisaged solution
trade transparency information that
greatest extent possible.
greatest extent possible.
is based on an authorisation of
is available. The envisaged solution
providers working along pre-
is based on an authorisation of
defined and supervised parameters
providers working along pre-
to ensure that consistent and
defined and supervised parameters
accurate market data is made
which are in competition with each
available which are in competition
other in order to achieve technically
with each other in order to
deliver
highly sophisticated and innovative
technically highly sophisticated and
solutions, serving the market to the
innovative solutions, serving the
greatest extent possible and
market to the greatest extent
ensur
ing that consistent and
possible.
In order to facilitate the
accurate market data is made
early development of a viable
available.
By requiring all CTPs to
consolidated tape, the Commission
consolidate data from all APAs
should adopt delegated acts
and trading venues it will be
specifying certain details
assured that competition will take
concerning the information
place on the basis of quality of
obligation on consolidated tape
service to clients rather than
providers (CTPs) as soon as
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possible. By requiring all CTPs to
breadth of data covered.
consolidate all APA data it will be
Nevertheless it is appropriate to
assured that competition will take
make provision now for a
place on the basis of quality of
consolidated tape to be put in place
service to clients rather than
through a public procurement
breadth of data covered.
process if the mechanism
Nevertheless it is appropriate to
envisaged does not lead to the
make provision now for a public
timely delivery of an effective and
solution to be developed if the
comprehensive consolidated tape
commercial solution does not lead
for non-equity instruments.
to the timely delivery of an
Technical group 20140206
effective and comprehensive
consolidated tape.
Reference to “non-equity”
corrected to “equity” above
Move recital 113 (row 149) here,
after recital 78
112.
Rec. 79
(79) Revision of Directive
(79) Revision of Directive
(79) Revision of Directive
Agreed
silence
procedure
2006/49/EC should fix the
2006/49/EC should fix the
2006/49/EC should fix the
20131008
minimum capital requirements with
minimum capital requirements with
minimum capital requirements with
(79) Revision of Directive
which regulated markets should
which regulated markets should
which regulated markets should
2006/49/EC should fix the
comply in order to be authorised,
comply in order to be authorised,
comply in order to be authorised,
minimum capital requirements with
and in so doing should take into
and in so doing should take into
and in so doing should take into
which regulated markets should
account the specific nature of the
account the specific nature of the
account the specific nature of the
comply in order to be authorised,
risks associated with such markets.
risks associated with such markets.
risks associated with such markets.
and in so doing should take into
account the specific nature of the
risks associated with such markets.
113.
Rec. 80
(80) Operators of a regulated market
(80) Market operators of a
(80) Operators of a regulated
Technical group 20140128
should also be able to operate an
regulated market should also be
market should also be able to
"Or OTF" added to align to
MTF in accordance with the
able to operate an MTF in
operate an MTF in accordance with
relevant Article.
relevant provisions of this Directive.
accordance with the relevant
the relevant provisions of this
provisions of this Directive.
Directive.
Agreed
silence
procedure
20131008
(80) Operators of a regulated
market should also be able to
operate an MTF or OTF in
accordance with the relevant
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provisions of this Directive.
114.
Rec. 81
(81) The provisions of this Directive
(81) The provisions of this
(81) The provisions of this
Agreed
silence
procedure
concerning the admission of
Directive concerning the admission
Directive concerning the admission
20131008
instruments to trading under the
of instruments to trading under the
of instruments to trading under the
Technical group 28 08
rules enforced by the regulated
rules enforced by the regulated
rules enforced by the regulated
market should be without prejudice
market should be without prejudice
market should be without prejudice
[Technical correction proposed by
to the application of
to the application of Directive
to the application of
Commission]
Directive 2001/34/EC of the
2001/34/EC of the European
Directive 2001/34/EC of the
(81) The provisions of this
European Parliament and of the
Parliament and of the Council of 28
European Parliament and of the
Directive concerning the admission
Council of 28 May 2001 on the
May 2001 on the admission of
Council of 28 May 2001 on the
of instruments to trading under the
admission of securities to official
securities to official stock exchange
admission of securities to official
rules enforced by the regulated
stock exchange listing and on
listing and on information to be
stock exchange listing and on
market should be without prejudice
information to be published on those
published on those securities
1917. A
information to be published on
to the application of
securities61. A regulated market
regulated market should not be
those securities62. A regulated
Directive 2001/34/EC of the
should not be prevented from
prevented from applying more
market should not be prevented
European Parliament and of the
applying more demanding
demanding requirements in respect
from applying more demanding
Council of 28 May 2001 on the
requirements in respect of the
of the issuers of securities or
requirements in respect of the
admission of securities to official
issuers of securities or instruments
instruments which it is considering
issuers of securities or instruments
stock exchange listing and on
which it is considering for
for admission to trading than are
which it is considering for
information to be published on
admission to trading than are
imposed pursuant to this Directive.
admission to trading than are
those securities63
and of Directive
imposed pursuant to this Directive.
imposed pursuant to this Directive.
2003/71/EC of the European
Parliament and of the Council of
4 November 2003 on the
prospectus to be published when
securities are offered to the
public or admitted to trading (OJ
L 345, 31.12.2003, p. 64, Directive
as last amended by European
Parlianent and Council Directive
2010/73/EU). A regulated market
should not be prevented from
applying more demanding
requirements in respect of the
61 OJ L 184, 6.7.2001, p. 1. Directive as last amended by European Parliament and Council Directive 2003/71/EC (OJ L 345, 31.12.2003, p. 64.).
1917 OJ L 184, 6.7.2001, p. 1. Directive as last amended by European Parliament and Council Directive 2003/71/EC (OJ L 345, 31.12.2003, p. 64.).
62 OJ L 184, 6.7.2001, p. 1. Directive as last amended by European Parliament and Council Directive 2003/71/EC (OJ L 345, 31.12.2003, p. 64.).
63 OJ L 184, 6.7.2001, p. 1. Directive as last amended by European Parliament and Council Directive 2003/71/EC (OJ L 345, 31.12.2003, p. 64.).
Page 104 of 143
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issuers of securities or instruments
which it is considering for
admission to trading than are
imposed pursuant to this Directive.
115.
Rec. 82
(82) Member States should be able
(82) Member States should be able
(82) Member States should be able
Agreed
silence
procedure
to designate different competent
to designate different competent
to designate different competent
20131008
authorities to enforce the wide-
authorities to enforce the wide-
authorities to enforce the wide-
(82) Member States should be able
ranging obligations laid down in this
ranging obligations laid down in
ranging obligations laid down in
to designate different competent
Directive. Such authorities should
this Directive. Such authorities
this Directive. Such authorities
authorities to enforce the wide-
be of a public nature guaranteeing
should be of a public nature
should be of a public nature
ranging obligations laid down in
their independence from economic
guaranteeing their independence
guaranteeing their independence
this Directive. Such authorities
actors and avoiding conflicts of
from economic actors and avoiding
from economic actors and avoiding
should be of a public nature
interest. In accordance with national
conflicts of interest. In accordance
conflicts of interest. In accordance
guaranteeing their independence
law, Member States should ensure
with national law, Member States
with national law, Member States
from economic actors and avoiding
appropriate financing of the
should ensure appropriate financing
should ensure appropriate financing
conflicts of interest. In accordance
competent authority. The
of the competent authority. The
of the competent authority. The
with national law, Member States
designation of public authorities
designation of public authorities
designation of public authorities
should ensure appropriate financing
should not exclude delegation under
should not exclude delegation
should not exclude delegation
of the competent authority. The
the responsibility of the competent
under the responsibility of the
under the responsibility of the
designation of public authorities
authority.
competent authority.
competent authority.
should not exclude delegation
under the responsibility of the
competent authority.
116.
(82a) In order to ensure that the
Technical group 20140128
communication between competent
(82a) In order to ensure that the
authorities of suspensions,
communication between competent
removals, disruptions, disorderly
authorities of suspensions,
trading conditions and
removals, disruptions, disorderly
circumstances that may indicate
trading conditions and
market abuse is achieved in an
circumstances that may indicate
efficient and timely way, an
market abuse is achieved in an
effective communication and co-
efficient and timely way, an
ordination process between national
effective communication and co-
competent authorities is necessary,
ordination process between national
which will be achieved via
competent authorities is necessary,
arrangements developed by ESMA.
which will be achieved via
arrangements developed by ESMA.
Page 105 of 143
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117.
Rec. 83
(83) The G20 summit in Pittsburgh
(83) The G20 summit in Pittsburgh
(83) The G20 summit in Pittsburgh
Technical group 20140128
on 25 September 2009 agreed to
on 25 September 2009 agreed to
on 25 September 2009 agreed to
(83) The G20 summit in Pittsburgh
improve the regulation, functioning
improve the regulation, functioning
improve the regulation, functioning
on 25 September 2009 agreed to
and transparency of financial and
and transparency of financial and
and transparency of financial and
improve the regulation, functioning
commodity markets to address
commodity markets to address
commodity markets to address
and transparency of financial and
excessive commodity price
excessive commodity price
excessive commodity price
commodity markets to address
volatility. The Commission
volatility. The Commission
volatility. The Commission
excessive commodity price
Communications of 28 October
Communications of 28 October
Communications of 28 October
volatility. The Commission
2009 on A Better Functioning Food
2009 on A Better Functioning Food
2009 on A Better Functioning Food
Communications of 28 October
Supply Chain in Europe, and of 2
Supply Chain in Europe, and of 2
Supply Chain in Europe, and of 2
2009 on A Better Functioning Food
February 2011 on Tackling the
February 2011 on
‘Tackling the
February 2011 on Tackling the
Supply Chain in Europe, and of 2
Challenges in Commodity Markets
Challenges in Commodity Markets
Challenges in Commodity Markets
February 2011 on
‘Tackling the
and Raw Materials outlined
and Raw Materials
’ outlined
and Raw Materials outlined
Challenges in Commodity Markets
measures that fall to be taken in the
measures that fall to be taken in the
measures that fall to be taken in the
and Raw Materials
’ outlined
context of the review of Directive
context of the review of Directive
context of the review of Directive
measures that fall to be taken in the
2004/39/EC.
2004/39/EC.
2004/39/EC.
In September 2011,
context of the review of Directive
the International Organization of
2004/39/EC.
In September 2011,
Securities Commissions published
the International Organization of
Principles for the Regulation and
Securities Commissions published
Supervision of Commodity
Principles for the Regulation and
Derivatives Markets. These
Supervision of Commodity
principles were endorsed by the
Derivatives Markets. These
G20 summit in Cannes on 4
principles were endorsed by the
November 2011 which called for
G20 summit in Cannes on 4
market regulators to have formal
November 2011 which called for
position management powers,
market regulators to have formal
including the power to set ex ante
position management powers,
position limits as appropriate.
including the power to set ex ante
position limits as appropriate
118.
Rec. 84
(84) The powers made available to
(84) The powers made available to
(84) The powers made available to
Agreed
silence
procedure
competent authorities should be
competent authorities should be
competent authorities should be
20131008
complemented with explicit powers
complemented with explicit powers
complemented with explicit powers
(84) The powers made available to
to demand information from any
to demand information from any
to
obtain information from any
competent authorities should be
person regarding the size and
person regarding the size and
person regarding the size and
complemented with explicit powers
purpose of a position in derivatives
purpose of a position in derivatives
purpose of a position in derivatives
to
obtain information from any
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contracts related to commodities
contracts related to commodities
contracts related to commodities
person regarding the size and
and to request the person to take
and to request the person to take
and to request the person to take
purpose of a position in derivatives
steps to reduce the size of the
steps to reduce the size of the
steps to reduce the size of the
contracts related to commodities
position in the derivative contracts.
position in the derivative contracts.
position in the derivative contracts.
and to request the person to take
steps to reduce the size of the
position in the derivative contracts.
119.
Rec. 85
(85) Explicit powers should be
(85) Explicit powers should be
(85) Explicit powers should be
Technical group 20140128 / 29
granted to competent authorities to
granted to competent authorities to
granted to
trading venues and to
(85) A harmonised position limits
limit the ability of any person or
limit the ability of any person or
competent authorities to limit the
regime is needed to ensure greater
class of persons from entering into a
class of persons from entering into
ability of any person or class of
coordination and consistency in the
derivative contract in relation to a
a derivative contract in relation to a
persons
to enter into
or hold a
application of this regime,
commodity. The application of a
commodity. The application of a
derivative contract in relation to a
especially for contracts that are
limit should be possible both in the
limit should be possible both in the
commodity
, based on technical
traded across the EU. Therefore,
case of individual transactions and
case of individual transactions and
standards determined by ESMA,
explicit powers should be granted
positions built up over time. In the
positions built up over time. In the
and to otherwise manage positions
to
competent authorities to
latter case in particular, the
latter case in particular, the
in such a way as to promote
establish limits, on the basis of a
competent authority should ensure
competent authority should ensure
integrity of the market for the
methodology determined by
that these position limits are non-
that these position limits are non-
derivative and the underlying
ESMA, on the posititions any
discriminatory, clearly spelled out,
discriminatory, clearly spelled out,
commodity without unduly
person can hold, at an aggregate
take due account of the specificity
take due account of the specificity
constraining liquidity. The
group level, in a derivative
of the market in question, and are
of the market in question, and are
application of a limit should be
contract in relation to a
necessary to secure the integrity and
necessary to secure the integrity
possible both in the case of
commodity at all times in order
orderly functioning of the market.
and orderly functioning of the
individual transactions and
to prevent market abuse,
market.
positions built up over time. In the
including cornering the market,
latter case in particular, the
and to support orderly pricing
competent authority should ensure
and settlement
that these position limits are non-
conditionsincluding the
discriminatory, clearly spelled out,
prevention of market distorting
take due account of the specificity
posititions.
Such limits should
of the market in question, and are
promote integrity of the market for
necessary to secure the integrity
the derivative and the underlying
and orderly functioning of the
commodity without prejudice to
market.
Such limits should not
price discovery in the market for
apply to positions which
the underlying commodity without
objectively reduce risks directly
unduly constraining liquidity and
relating to commercial activities in
should not apply to positions
relation to the commodity. In order
which objectively reduce risks
to avoid unintended impacts on the
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markets for the underlying
directly relating to commercial
commodity from the regulation of
activities in relation to the
derivatives it is also appropriate to
commodity. The distinction
clarify the distinction between spot
between spot contracts for
contracts and futures contracts.
commodities and commodity
derivative contracts should also be
clarified.
In order to achieve the
harmonised regime, it is also
appropriate for ESMA to monitor
the implementation of the position
limits and for competent
authorities to put in place
cooperation arrangements,
including exchange of relevant
data with each other and to enable
the monitoring and enforcement of
the limits.
Technical group 20140206
1. Change made above at the
request of Parliament, to align to
the wording used in row 1011
2. Addition made at the end at the
request of the Presidency, to reflect
text in Article 59 (row 1013ba)
120.
Rec. 86
(86) All venues which offer trading
(86) All venues which offer trading
(86)
In addition to the powers
Technical group 20140128
in commodity derivatives should
in commodity derivatives should
made available to competent
(86) All venues which offer trading
have in place appropriate limits or
have in place appropriate limits and
authorities, all trading venues
in commodity derivatives should
suitable alternative arrangements
position management controls to
which offer trading in commodity
have in place appropriate limits and
designed to support liquidity,
manage trading on their markets
derivatives should have in place
position management controls,
prevent market abuse, and ensure
designed to […] prevent market
appropriate limits
and such other
providing
the necessary powers at
the orderly pricing and settlement
abuse
, and ensure the orderly
appropriate position management
least to monitor and access
conditions. ESMA should maintain
pricing and settlement conditions.
arrangements as are necessary to
information about commodity
and publish a list containing
Monitoring their markets on an on-
support liquidity, prevent market
derivative posititions, to require
summaries of all such measures in
going basis, operators of trading
abuse, and ensure the orderly
the reduction or termination of
force. These limits or arrangements
venues should be able to request
pricing and settlement conditions.
such posititions and to require
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should be applied in a consistent
information from members or
Such arrangements may include
that liquidity is provided back in
manner and take account of the
participants about their trading and
for instance identification of build-
the market to mitigate the effects
specific characteristics of the market
that of their clients to help them to
up of large position concentrations
of a large or dominant positition.
in question. They should be clearly
understand fully what lies behind
especially close to settlement,
ESMA should maintain and publish
spelled out as regards to whom they
patterns of trading that they observe
position limits, price movement
a list containing summaries of all
apply and any exemptions thereto,
on their markets. Where operators
limits, ordering liquidation or
positition limits and positition
as well as to the relevant
of venues have concerns that a
transfer of open positions,
management controls in force.
quantitative thresholds which
position is being held with abusive
suspension of trading, altering
These limits and arrangements
constitute the limits or which may
intent or that a position in a
delivery terms or conditions,
should be applied in a consistent
trigger other obligations. The
contract poses a threat to the
cancelling trades and requiring
manner and take account of the
Commission should be empowered
orderly pricing or settlement
delivery intentions. ESMA should
specific characteristics of the
to adopt delegated acts, including
conditions, they should be able to
maintain and publish a list
market in question. They should be
with a view to avoiding any
intervene to cap positions or to
containing summaries of all such
clearly spelled out as regards to
divergent effects of the limits or
require that a position is reduced
measures in force.
Limits should be
how they apply and […] to the
arrangements applicable to
irrespective of whether such a
applied in a consistent manner and
relevant quantitative thresholds
comparable contracts on different
position exceeds or not the position
take account of the specific
which constitute the limits or which
venues.
limits. ESMA should maintain and
characteristics of the market in
may trigger other obligations. […]
publish a list containing summaries
question. They should be clearly
of all such measures in force. These
spelled out as regards to whom they
limits and arrangements should be
apply and any exemptions thereto,
applied in a consistent manner and
as well as to the relevant
take account of the specific
quantitative thresholds which
characteristics of the market in
constitute the limits or which may
question. They should be clearly
trigger other obligations.
Given
spelled out as regards to how they
that no one trading venue can see
apply and […] to the relevant
the aggregate positions taken by its
quantitative thresholds which
members or participants in the
constitute the limits or which may
overall market it is also
trigger other obligations. […]
appropriate to allow for
specification of the controls
through regulatory technical
standards, including with a view to
avoiding any divergent effects of
the limits applicable to comparable
contracts on different venues.
121.
Rec. 87
(87) Venues where the most liquid
(87) Venues where the most liquid
(87) Venues where the most liquid
Technical group 20140128
commodity derivatives are traded
commodity derivatives are traded
commodity derivatives are traded
(
87) Trading venues should
should publish an aggregated
should publish an aggregated
should publish an aggregated
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weekly breakdown of the positions
weekly breakdown of the positions
weekly breakdown of the positions
publish an aggregated weekly
held by different types of market
held by different categories of
held by different types of market
breakdown of the positions held
participants, including the clients of
position holders for the different
participants, including the clients of
by different categories of persons
those not trading on their own
financial instruments traded on
those not trading on their own
for the different commodity
behalf. A comprehensive and
their platforms. A comprehensive
behalf. A comprehensive and
derivative contracts, emission
detailed breakdown both by the type
and detailed breakdown both by the
detailed breakdown both by the
allowances and derivatives
and identity of the market
type and identity of the market
type and identity of the market
thereof traded on their platforms.
participant should be made available
participant should be made
participant should be
A comprehensive and detailed
to the competent authority upon
available to the competent authority
communicated to the competent
breakdown of the posititions held
request.
upon request.
authority upon request,
taking
by all persons should be made
account, where applicable, of
available to the competent
reporting requirements already
authority at least daily.
imposed under Article 8 of
Arrangement for reporting under
Regulation (EU) No 1227/2011 of
this Directive should take into
the European Parliament and of
account, where applicable,
the Council of 25 October 2011 on
reporting requirements already
wholesale energy market integrity
imposed under Article 8 of
and transparency64.
Regulation (EU) No 1227/2011 of
the European Parliament and of
the Council of 25 October 2011 on
wholesale energy market integrity
and transparency65.
Technical group 20140206
Addition made above at the request
of the Presidency
121
Technical meeting 20140128
a.
Agreed to move rec 87a and 87b
after rec. 85
Agreed Trilogue 20140114
(87a) While the methodology
used for calculation of position
64 OJ L 326, 8.12.2011, p. 1.
65 OJ L 326, 8.12.2011, p. 1.
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limits should not create barriers
to the development of new
commodity derivatives, ESMA
should ensure when determining
the methodology for calculation
that the development of new
commodity derivatives cannot be
used to circumvent the position
limits regime.
(87b) Position limits should be set
for each individual commodity
derivative contract. In order to
avoid circumvention of the
position limits regime through
the ongoing development of new
commodity derivative contracts,
ESMA should ensure that the
methodology for calculation
prevents any circumvention by
taking into account the overall
open interest in other commodity
derivatives with the same
underlying commodity.
122.
Rec. 88
(88) Considering the communiqué
(88) Considering the communiqué
▌
Technical group 20140128
of G20 finance ministers and central
of G20 finance ministers and
[...]
bank governors of 15 April 2011 on
central bank governors of 15 April
ensuring that participants on
2011 on ensuring that participants
Part of text moved before recital
commodity derivatives markets
on commodity derivatives markets
14a (new)
should be subject to appropriate
should be subject to appropriate
regulation and supervision, the
regulation and supervision, the
exemptions from Directive
exemptions
from
Directive
2004/39/EC.for various participants
2004/39/EC
.
for
various
active in commodity derivative
participants active in commodity
markets should be modified to
derivative
markets
should
be
ensure that activities by firms,
modified to ensure that activities by
which are not part of a financial
firms, which are not part of a
group, involving the hedging of
financial group, involving the
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production-related and other risks as
hedging of production-related and
well as the provision of investment
other risks as well as the provision
services in commodity or exotic
of
investment
services
in
derivatives on an ancillary basis to
commodity or exotic derivatives on
clients of the main business remain
an ancillary basis to clients of the
exempt, but that firms specialising
main business remain exempt, but
in trading commodities and
that firms specialising in trading
commodity derivatives are brought
commodities
and
commodity
within this Directive.
derivatives are brought within this
Directive.
123.
Rec. 89
(89) It is desirable to facilitate
(89) It is desirable to facilitate
(89) It is desirable to facilitate
Technical group 20140128
access to capital for smaller and
access to capital for smaller and
access to capital for small and
(89) It is desirable to facilitate
medium sized enterprises and to
medium sized enterprises and to
medium-sized enterprises
(SME)
access to capital for small and
facilitate the further development of
facilitate the further development of
and to facilitate the further
medium-sized enterprises
(SME)
specialist markets that aim to cater
specialist markets that aim to cater
development of specialist markets
and to facilitate the further
for the needs of smaller and medium
for the needs of smaller and
that aim to cater for the needs of
development of specialist markets
sized issuers. These markets which
medium sized issuers. These
smaller and medium-sized issuers.
that aim to cater for the needs of
are usually operated under this
markets which are usually operated
These markets which are usually
smaller and medium-sized issuers.
Directive as MTFs are commonly
under this Directive as MTFs are
operated under this Directive as
These markets which are usually
known as SME markets, growth
commonly known as SME markets,
MTFs are commonly known as
operated under this Directive as
markets or junior markets. The
growth markets or junior markets.
SME markets, growth markets or
MTFs are commonly known as
creation within the MTF category of
The creation within the MTF
junior markets. The creation within
SME markets, growth markets or
a new sub category of SME growth
category of a new sub category of
the MTF category of a new sub
junior markets. The creation within
market and the registration of these
SME growth market and the
category of SME growth market
the MTF category of a new sub
markets should raise their visibility
registration of these markets should
and the registration of these
category of SME growth market
and profile and aid the development
raise their visibility and profile and
markets should raise their visibility
and the registration of these
of common pan-European
aid the development of common
and profile and aid the development
markets should raise their visibility
regulatory standards for those
pan-European regulatory standards
of common pan-European
and profile and aid the development
markets.
for those markets.
regulatory standards for those
of common pan-European
markets.
Attention should be
regulatory standards for those
focused on how to provide future
markets.
Attention should be
law for the further fostering and
focused on how future regulation
promotion of use of this market as
should further foster and promote
a new asset class that will be
the use of this market so as to
attractive for investors. All other
make it attractive for investors,
EU market regulation should be
and provide a lessening of
updated to provide a lessening of
administrative burdens and
administrative burdens and to
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provide further incentives for
provide further incentives for
listing of SMEs on the SME
listing of SMEs to access capital
growth markets.
markets through SME growth
markets.
Technical group 20140206
Drafting change made above, at the
request of the Presidency
124.
Rec. 90
(90) The requirements applying to
(90) The requirements applying to
(90) The requirements applying to
Agreed
silence
procedure
this new category of markets need
this new category of markets need
this new category of markets need
20131008
to provide sufficient flexibility to be
to provide sufficient flexibility to
to provide sufficient flexibility to
(90) The requirements applying to
able to take into account the current
be able to take into account the
be able to take into account the
this new category of markets need
range of successful market models
current range of successful market
current range of successful market
to provide sufficient flexibility to
that exist across Europe. They also
models that exist across Europe.
models that exist across Europe.
be able to take into account the
need to strike the correct balance
They also need to strike the correct
They also need to strike the correct
current range of successful market
between maintaining high levels of
balance between maintaining high
balance between maintaining high
models that exist across Europe.
investor protection, which are
levels of investor protection, which
levels of investor protection, which
They also need to strike the correct
essential to fostering investor
are essential to fostering investor
are essential to fostering investor
balance between maintaining high
confidence in issuers on these
confidence in issuers on these
confidence in issuers on these
levels of investor protection, which
markets, while reducing
markets, while reducing
markets, while reducing
are essential to fostering investor
unnecessary administrative burdens
unnecessary administrative burdens
unnecessary administrative burdens
confidence in issuers on these
for issuers on those markets. It is
for issuers on those markets. It is
for issuers on those markets. It is
markets, while reducing
proposed that more details about
proposed that more details about
proposed that more details about
unnecessary administrative burdens
SME market requirements such as
SME market requirements such as
SME market requirements such as
for issuers on those markets. It is
those relating to criteria for
those relating to criteria for
those relating to criteria for
proposed that more details about
admission to trading on such a
admission to trading on such a
admission to trading on such a
SME market requirements such as
market would be further prescribed
market would be further prescribed
market would be further prescribed
those relating to criteria for
in delegated acts or technical
in delegated acts or technical
in delegated acts or technical
admission to trading on such a
standards.
standards.
standards.
market would be further prescribed
in delegated acts or technical
standards.
125.
Rec. 91
(91) Given the importance of not
(91) Given the importance of not
(91) Given the importance of not
Technical group 20140128
adversely affecting existing
adversely affecting existing
adversely affecting existing
(91) Given the importance of not
successful markets the option
successful markets the option
successful markets the option
adversely affecting existing
should remain for operators of
should remain for operators of
should remain for operators of
successful markets the option
markets aimed at smaller and
markets aimed at smaller and
markets aimed at
SME issuers to
should remain for operators of
medium sized issuers to choose to
medium sized issuers to choose to
choose to continue to operate such
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continue to operate such a market in
continue to operate such a market
a market in accordance with the
markets aimed at smaller and
accordance with the requirements
in accordance with the
requirements under the Directive
medium sized issuers to choose to
under the Directive without seeking
requirements under the Directive
without seeking registration as an
continue to operate such a market
registration as an SME growth
without seeking registration as an
SME growth market.
in accordance with the
market.
SME growth market. An issuer that
requirements under the Directive
is a small and medium sized
without seeking registration as an
enterprise should not be obliged to
SME growth market. An issuer that
apply to have its financial
is a small and medium sized
instruments admitted to trading on
enterprise should not be obliged to
an SME growth market.
apply to have its financial
instruments admitted to trading on
an SME growth market.
126.
(91a) In order for this new category
Technical group 20140128
of markets to benefit SMEs, at least
(91a) In order for this new category
fifty per cent of the issuers whose
of markets to benefit SMEs, at least
financial instruments are traded on
fifty per cent of the issuers whose
a SME growth market will have to
financial instruments are traded on
be SMEs. This assessment will be
a SME growth market
should be
made on an annual basis. The
SMEs. This assessment should be
criterion of at least fifty per cent of
made on an annual basis. The
the issuers has to be implemented
criterion of at least fifty per cent of
in a flexible way. A temporary
the issuers has to be implemented
failure to meet this criterion does
in a flexible way. A temporary
not mean that the trading venue will
failure to meet this criterion
should
have to be immediately
not mean that the trading venue will
deregistered or refused to be
have to be immediately
registered as an SME growth
deregistered or refused to be
market if it has a reasonable
registered as an SME growth
prospect to meet the at least fifty
market if it has a reasonable
per cent criterion as from the
prospect of meeting the at least
subsequent year. With respect to
fifty per cent criterion as from the
the assessment to determine
subsequent year. With respect to
whether an issuer is an SME
the assessment to determine
enterprise, it will be made based on
whether an issuer is an SME
the market capitalisation of the
enterprise, it
should be made based
previous three calendar years. This
on the market capitalisation of the
should ensure a smoother transition
previous three calendar years. This
for these issuers from these
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specialists markets to the main
should ensure a smoother transition
markets.
for these issuers from these
specialist markets to the main
markets.
127.
Rec. 92
(92) Any confidential information
(92) Any confidential information
(92) Any confidential information
Agreed
silence
procedure
received by the contact point of one
received by the contact point of one
received by the contact point of one
20131008
Member State through the contact
Member State through the contact
Member State through the contact
(92) Any confidential information
point of another Member State
point of another Member State
point of another Member State
received by the contact point of one
should not be regarded as purely
should not be regarded as purely
should not be regarded as purely
Member State through the contact
domestic.
domestic.
domestic.
point of another Member State
should not be regarded as purely
domestic.
128.
Rec. 93
(93) It is necessary to enhance
(93) It is necessary to enhance
(93) It is necessary to enhance
Agreed
silence
procedure
convergence of powers at the
convergence of powers at the
convergence of powers at the
20131008
disposal of competent authorities so
disposal of competent authorities so
disposal of competent authorities so
(93) It is necessary to enhance
as to pave the way towards an
as to pave the way towards an
as to pave the way towards an
convergence of powers at the
equivalent intensity of enforcement
equivalent intensity of enforcement
equivalent intensity of enforcement
disposal of competent authorities so
across the integrated financial
across the integrated financial
across the integrated financial
as to pave the way towards an
market. A common minimum set of
market. A common minimum set of
market. A common minimum set of
equivalent intensity of enforcement
powers coupled with adequate
powers coupled with adequate
powers coupled with adequate
across the integrated financial
resources should guarantee
resources should guarantee
resources should guarantee
market. A common minimum set of
supervisory effectiveness.
supervisory effectiveness.
supervisory effectiveness.
powers coupled with adequate
resources should guarantee
supervisory effectiveness.
Cf. row 1263: add at the end of
recital 93 Recital 29 MAR, and
insert Recital 31a MAR as new
recital 93a
This Directive therefore foresees a
minimum set of supervisory and
investigative powers competent
authorities of Member States
should be entrusted with in
accordance with national law.
Those powers should be exercised,
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where the national law so requires,
by application to the competent
judicial authorities. When
exercising their powers under this
Regulation competent authorities
should act objectively and
impartially and remain autonomous
in their decision making.
(93a) While this Directve specifies
a minimum set of powers
competent authorities should have,
these powers are to be exercised
within a complete system of
national law which guarantees the
respect for fundamental rights,
including the right to privacy. For
the exercise of those powers, which
may amount to serious
interferences with the right to
respect private and family life,
home and communications,
Member States should have in
place adequate and effective
safeguards against any abuse, for
instance, where appropriate prior
authorisation from the judicial
authorities of a Member State
concerned. Member States should
allow the possibility for competent
authorities to exercise such
intrusive powers to the extent
necessary for the proper
investigation of serious cases where
there are no equivalent means for
effectively achieving the same
result.
128
(93a) No action taken by any
Technical group 20140128
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a
competent authority or ESMA in
(93a) No action taken by any
the performance of their duties
competent authority or ESMA in
should directly or indirectly
the performance of their duties
discriminate against any member
should directly or indirectly
state or group of member states as a
discriminate against any member
venue for the provision of
state or group of member states as a
investment services and activities in
venue for the provision of
any currency.
investment services and activities in
any currency.
129.
Rec. 94
(94) In view of the significant
(94) In view of the significant
(94) In view of the significant
Agreed
silence
procedure
impact and market share acquired
impact and market share acquired
impact and market share acquired
20131008
by various MTFs, it is appropriate to
by various MTFs, it is appropriate
by various MTFs, it is appropriate
(94) In view of the significant
ensure that adequate cooperation
to ensure that adequate cooperation
to ensure that adequate cooperation
impact and market share acquired
arrangements are established
arrangements are established
arrangements are established
by various MTFs, it is appropriate
between the competent authority of
between the competent authority of
between the competent authority of
to ensure that adequate cooperation
the MTF and that of the jurisdiction
the MTF and that of the jurisdiction
the MTF and that of the jurisdiction
arrangements are established
in which the MTF is providing
in which the MTF is providing
in which the MTF is providing
between the competent authority of
services. In order to anticipate any
services. In order to anticipate any
services. In order to anticipate any
the MTF and that of the jurisdiction
similar developments, this should be
similar developments, this should
similar developments, this should
in which the MTF is providing
extended to OTFs.
be extended to OTFs.
be extended to OTFs.
services. In order to anticipate any
similar developments, this should
be extended to OTFs.
130.
Rec. 95
(95) In order to ensure compliance
(95) In order to ensure compliance
(95) In order to ensure compliance
Technical group 20140128
by investment firms and regulated
by investment firms and regulated
by investment firms and regulated
Technical group proposal
markets, those who effectively
markets, those who effectively
markets, those who effectively
control their business and the
control their business and the
control their business and the
(95) In order to ensure compliance
members of the investment firms
members of the investment firms
members of the investment firms
by investment
firms, market
and regulated markets' management
and regulated markets' management
and regulated markets' management
operators authorised to operate
body with the obligations deriving
body with the obligations deriving
body with the obligations deriving
an MTF or OTF, regulated
from this Directive and from
from this Directive and from
from this Directive and from
markets,
APAs, CTPs or ARMs,
Regulation [inserted by OP] and to
Regulation [inserted by OP] and to
Regulation
(EU) No .../... [MiFIR]
those who effectively control their
ensure that they are subject to
ensure that they are subject to
and to ensure that they are subject
business and the members of the
similar treatment across the Union,
similar treatment across the Union,
to similar treatment across the
investment firms and regulated
Member States should be required
Member States should be required
European Union, Member States
markets' management body with the
to provide for administrative
to provide for administrative
should be required to provide for
obligations deriving from this
sanctions and measures which are
sanctions and measures which are
administrative sanctions and
Directive and from Regulation
(EU) No .../... [MiFIR] and to
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effective, proportionate and
effective, proportionate and
measures which are effective,
ensure that they are subject to
dissuasive. Therefore,
dissuasive. Therefore,
proportionate and dissuasive.
similar treatment across the
administrative sanctions and
administrative sanctions and
Therefore, administrative sanctions
European Union, Member States
measures set out by Member States
measures set out by Member States
and measures set out by Member
should be required to provide for
should satisfy certain essential
should satisfy certain essential
States should satisfy certain
sanctions and measures which are
requirements in relation to
requirements in relation to
essential requirements in relation to
effective, proportionate and
addressees, criteria to be taken into
addressees, criteria to be taken into
addressees, criteria to be taken into
dissuasive. Administrative
account when applying a sanction or
account when applying a sanction
account when applying a sanction
sanctions and measures set out by
measure, publication, key
or measure, publication, key
or measure, publication, key
Member States should satisfy
sanctioning powers and levels of
sanctioning powers and levels of
sanctioning powers and levels of
certain essential requirements in
administrative pecuniary sanctions.
administrative pecuniary fines.
administrative pecuniary sanctions.
relation to addressees, criteria to be
taken into account when applying a
sanction or measure, publication,
key sanctioning powers and levels
of administrative pecuniary
sanctions.
Technical group 13 11
Comment following comment in
Council and EP :
Wording above aligned to row
1249; final wording to be aligned to
Article
Check with Lawyer-linguists about
definition of data reporting services
providers (APA, CTP and ARM to
be covered); cf. row 1056
131.
Rec. 96
(96) In particular, competent
(96) In particular, competent
(96) In particular, competent
Agreed
silence
procedure
authorities should be empowered to
authorities should be empowered to
authorities should be empowered to
20131008
impose pecuniary sanctions which
impose pecuniary fines which are
impose pecuniary sanctions which
(96) In particular, competent
are sufficiently high to offset the
sufficiently high to offset the
are sufficiently high to offset the
authorities should be empowered to
benefits that can be expected and to
benefits that can be expected and to
benefits that can be expected and to
impose pecuniary sanctions which
be dissuasive even for larger
be dissuasive even for larger
be dissuasive even for larger
are sufficiently high to offset the
institutions and their managers.
institutions and their managers.
institutions and their managers.
benefits that can be expected and to
be dissuasive even for larger
institutions and their managers.
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Technical group 13 11
Comment following comment in
Council: Final wording to be
aligned to Article
131
Cf. row 1263:
a
Recital 30 MAR included as new
recital 96a, recital 31 MAR
included as new recital 96b (with
adaptation)
(
96a) It is also necessary for
competent authorities to have, in
accordance with national law and
with the Charter of Fundamental
Rights of the European Union,
the ability to access to the
premises of natural and legal
persons. The access to such
premises is necessary when there
is resonable suspicion that
documents and other data related
to the subject matter of an
investigation exist and may be
relevant to prove a breach to this
Directive or [MIFIR].
Additionally the access to such
premises is necessary where: the
person to whom a demand for
information has already been
made fails (wholly or in part) to
comply with it; or where there
are reasonable grounds for
believing that if a demand were
to be made, it would not be
complied with, or that the
documents or information to
which the information
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requirement relates, would be
removed, tampered with or
destroyed. If prior authorisation
is needed from the judicial
authority of the Member State
concerned, in accordance with
national law, such power for
access into premises shall be used
after having obtained that prior
judicial authorisation.
(96b)
Existing recordings of
telephone conversations and data
traffic records from investment
firms executing and documenting
the executions of transactions, as
well as existing telephone and
data
traffic
records
from
telecommunications
operators
constitute crucial, and sometimes
the only, evidence to detect and
prove the existence of market
abuse
as
well
as
verify
compliance
by
firms
with
investor protection and other
requirements set out in this
Directive or [MiFIR]. Therefore,
competent authorities should be
able
to
require
existing
recordings
of
telephone
conversations,
electronic
communications and data traffic
records held by an investment
firm or credit. Access to data and
telephone records is necessary for
the detection and sanctioning of
market abuse or of breaches of
requirements set out in this
Directive or [MiFIR]. In order to
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introduce a level playing field in
the Union in relation to the access
▌to telephone and existing data
traffic
records
held
by
a
telecommunication operator or
the
existing
recordings
of
telephone conversations and data
traffic held by an investment
firm,
competent
authorities
should
in
conformity
with
national law be able to require
existing telephone and existing
data traffic records held by a
telecommunication
operator
insofar
as
permitted
under
national
law
and
existing
recordings
of
telephone
conversations as well as data
traffic held by an investment
firm, in those cases where a
reasonable suspicion exists that
such
records related to the
subject-matter of the inspection
or investigation may be relevant
to prove insider dealing or
market manipulation in violation
of [MAR] or violations of the
requirements set out in this
Directive or [MiFIR]. Access to
telephone
and
data
traffic
records
held
by
a
telecommunications operator do
not encompass the content of
voice
communications
by
telephone.
132.
Rec. 97
(97) In order to ensure a consistent
(97) In order to ensure a consistent
(97) In order to ensure a consistent
Technical group 20140128
application of sanctions across
application of sanctions across
application of sanctions across
T: align to decisions on Articles
Member States, when determining
Member States, […] Member
Member States, when determining
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the type of administrative sanctions
States should be required to ensure
the type of administrative sanctions
(97) In order to ensure a consistent
or measures and the level of
that when determining the type of
or measures and the level of
application of sanctions across the
administrative pecuniary sanctions,
administrative sanctions or
administrative pecuniary sanctions,
Union, […] Member States should
Member States should be required
measures and the level of
Member States should be required
be required to ensure that when
to ensure that when determining the
administrative pecuniary fines, the
to ensure that when determining the
determining the type of
type of administrative sanctions or
competent authorities take into
type of administrative sanctions or
administrative sanctions or
measures and the level of
account all relevant circumstances.
measures and the level of
measures and the level of
administrative pecuniary sanctions,
administrative pecuniary sanctions,
administrative pecuniary fines, the
the competent authorities take into
the competent authorities take into
competent authorities take into
account all relevant circumstances.
account all relevant circumstances.
account all relevant circumstances.
133.
Rec. 98
(98) In order to ensure sanctions
(98) In order to ensure that
(98) In order to ensure sanctions
Agreed
silence
procedure
have a dissuasive effect on the
sanctions have a dissuasive effect
have a dissuasive effect on the
20131008
public at large, sanctions should
on the public at large, sanctions
public at large, sanctions should
(98) In order to ensure sanctions
normally be published, except in
should normally be published,
normally be published, except in
have a dissuasive effect on the
certain well-defined circumstances.
except in certain well-defined
certain well-defined circumstances.
public at large, sanctions should
circumstances.
normally be published, except in
certain well-defined circumstances.
Technical group 20140116
Cf. row 1208: add the following at
the end of recital 98
This Directive does not require but
should not prevent the publication
of criminal sanctions imposed for
breaches of this Directive or
Regulation [MiFIR].
Technical group 20140128
New text below to align to Articles
In order to ensure that decisions
made by competent authorities have
a dissuasive effect on the public at
large, they should normally be
published. The publication of
decisions is also an important tool
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for competent authorities to inform
market participants of what
behaviour is considered to be a
violation of this Directive and to
promote wider good behaviour
amongst market participants. If
such publication causes
disproportionate damage to the
persons involved, jeopardises the
stability of financial markets or an
ongoing investigation the
competent authority should publish
the sanctions and measures on an
anonymous basis in a manner
which is in conformity with
national law or delay the
publication. Competent authorities
should have the option not to
publish sanctions where
anonymous or delayed publication
is considered insufficient to ensure
that the stability of financial
markets will not be jeopardised.
Competent authorities are also not
required to publish measures which
are deemed to be of a minor nature
where publication would be
disproportionate. It is appropriate
to provide a mechanism for
reporting unpublished sanctions to
ESMA so that competent
authorities can take them into
account in their ongoing
supervision. This Directive does
not require but should not prevent
the publication of criminal
sanctions imposed for breaches of
this Directive or Regulation
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[MiFIR].
Note: this recital reflects better the
Article and also MAR recital 35b.
134.
Rec. 99
(99) In order to detect potential
(99) In order to detect potential
(99) In order to detect potential
Technical group 20140128
breaches, competent authorities
breaches, competent authorities
breaches, competent authorities
(99) In order to detect potential
should have the necessary
should have the necessary
should have the necessary
breaches, competent authorities
investigatory powers, and should
investigatory powers, and should
investigatory powers, and should
should have the necessary
establish effective mechanisms to
establish effective mechanisms to
establish effective
and reliable
investigatory powers, and should
encourage reporting of potential or
encourage reporting of potential or
mechanisms to encourage reporting
establish effective
and reliable
actual breaches. These mechanisms
actual breaches. These mechanisms
of potential or actual breaches
,
mechanisms to encourage reporting
should be without prejudice to
should be without prejudice to
including protection of employees
of potential or actual breaches
,
adequate safeguards for accused
adequate safeguards for accused
reporting breaches within their
including protection of employees
persons. Appropriate procedures
persons. Appropriate procedures
own institution. These mechanisms
reporting breaches within their
should be established to ensure the
should be established to ensure the
should be without prejudice to
own institution. These mechanisms
right of the reported person of
right of the reported person of
adequate safeguards for accused
should be without prejudice to
defence and to be heard before the
defence and to be heard before the
persons. Appropriate procedures
adequate safeguards for accused
adoption of a final decision
adoption of a final decision
should be established to ensure the
persons. Appropriate procedures
concerning him as well as the right
concerning him as well as the right
right of the reported person of
should be established to ensure
to seek remedy before a tribunal
to seek remedy before a tribunal
defence and to be heard before the
appropriate protection of an
against a decision concerning him.
against a decision concerning him.
adoption of a final decision
accused person, particularly with
concerning him as well as the right
regard the right to the protection
to seek remedy before a tribunal
of his personal data and
against a decision concerning him.
procedures to ensure the right of
the accused person of defence
and to be heard before the
adoption of a decision concerning
him as well as the right to seek
effective remedy before a court
against a decision concerning
him.
Note: wording adapted to
drafting of recital 36 MAR.
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135.
Rec.
(100) This Directive should refer to
(100) This Directive should refer to
(100) This Directive should refer to
Technical group 20140128
100
both administrative sanctions and
both […] sanctions and measures in
both administrative sanctions and
(100) This Directive should refer to
measures in order to cover all
order to cover all actions applied
measures in order to cover all
both […] sanctions and measures in
actions applied after a violation is
after a violation is committed, and
actions applied after a violation is
order to cover all actions applied
committed, and which are intended
which are intended to prevent
committed, and which are intended
after a violation is committed, and
to prevent further infringements,
further infringements, irrespective
to prevent further infringements,
which are intended to prevent
irrespective of their qualification as
of their qualification as a sanction
irrespective of their qualification as
further infringements, irrespective
a sanction or a measure under
or a measure under national law.
a sanction or a measure under
of their qualification as a sanction
national law.
national law.
or a measure under national law.
136.
Rec.
(101) This Directive should be
(101) This Directive should be
(101) This Directive should be
Technical group 20140128
101
without prejudice to any provisions
without prejudice to any provisions
without prejudice to any provisions
(101) This Directive should be
in the law of Member States relating
in the law of Member States
in the law of Member States
without prejudice to any provisions
to criminal sanctions.
relating to criminal sanctions. In the
relating to criminal sanctions.
in the law of Member States
application of this Directive,
Without prejudice to the legal
relating to criminal sanctions.
Member States should ensure that
systems of the Member States, they
the imposition of administrative
should ensure that where it is
measures and sanctions in
alleged that a member of the
accordance with this Directive and
management board of an
of criminal sanctions in accordance
investment firm or of a market
with national law does not breach
operator has breached the
the principle of
ne bis in idem.
provisions of or has committed an
offence in matters falling within
the scope of this Directive or of
Regulation (EU)No .../... [MiFIR],
he may be personally subject to
criminal or civil proceedings.
137.
(101a) Even though nothing
Technical group 20140128
prevents Member States from
(101a) Even though nothing
laying down rules for
prevents Member States from
administrative sanctions as well as
laying down rules for
criminal sanctions on the same
administrative sanctions as well as
infringements, Member States
criminal sanctions on the same
should not be required to lay down
infringements, Member States
rules for administrative sanctions
should not be required to lay down
on the infringements of this
rules for administrative sanctions
Directive or MIFIR which are
on the infringements of this
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subject to national criminal law. In
Directive or MIFIR which are
conformity with national law,
subject to national criminal law. In
Member States are not obliged to
conformity with national law,
impose both administrative and
Member States are not obliged to
criminal sanctions for the same
impose both administrative and
offence, but they can do so if their
criminal sanctions for the same
national law permits them.
offence, but they can do so if their
However, the maintenance of
national law permits them.
criminal sanctions instead of
However, the maintenance of
administrative sanctions for
criminal sanctions instead of
violations of this Directive or
administrative sanctions for
MIFIR should not reduce or
violations of this Directive or
otherwise affect the ability of
MIFIR should not reduce or
competent authorities to cooperate,
otherwise affect the ability of
access and exchange information in
competent authorities to cooperate,
a timely way with competent
access and exchange information in
authorities in other Member States
a timely way with competent
for the purposes of this Directive
authorities in other Member States
and MIFIR, including after any
for the purposes of this Directive
referral of the relevant
and MIFIR, including after any
infringements to the competent
referral of the relevant
judicial authorities for criminal
infringements to the competent
prosecution.
judicial authorities for criminal
prosecution.
Note: cf recital 35a in MAR and
safeguard ensuring cooperation
among NCAs
138.
Rec.
(102) With a view to protecting
(102) With a view to protecting
(102) With a view to protecting
Agreed silence procedure
102
clients and without prejudice to the
clients and without prejudice to the
clients and without prejudice to the
20131008
right of customers to bring their
right of customers to bring their
right of customers to bring their
(102) With a view to protecting
action before the courts, it is
action before the courts, it is
action before the courts, it is
clients and without prejudice to the
appropriate that Member States
appropriate that Member States
appropriate that Member States
right of customers to bring their
ensure that public or private bodies
ensure that public or private bodies
ensure that public or private bodies
action before the courts, it is
are established with a view to
are established with a view to
are established with a view to
appropriate that Member States
settling disputes out-of-court, to
settling disputes out-of-court, to
settling disputes out-of-court, to
ensure that public or private bodies
cooperate in resolving cross-border
cooperate in resolving cross-border
cooperate in resolving cross-border
are established with a view to
disputes, taking into account
disputes, taking into account
disputes, taking into account
settling disputes out-of-court, to
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Commission Recommendation
Commission Recommendation
Commission Recommendation
cooperate in resolving cross-border
98/257/EC of 30 March 1998 on the
98/257/EC of 30 March 1998 on
98/257/EC of 30 March 1998 on
disputes, taking into account
principles applicable to the bodies
the principles applicable to the
the principles applicable to the
Commission Recommendation
responsible for out-of-court
bodies responsible for out-of-court
bodies responsible for out-of-court
98/257/EC of 30 March 1998 on
settlement of consumer disputes66
settlement of consumer disputes
18
settlement of consumer disputes67
the principles applicable to the
and Commission Recommendation
and Commission Recommendation
and Commission Recommendation
bodies responsible for out-of-court
2001/310/EC on the principles for
2001/310/EC on the principles for
2001/310/EC on the principles for
settlement of consumer disputes68
out-of-court bodies involved in the
out-of-court bodies involved in the
out-of-court bodies involved in the
and Commission Recommendation
consensual resolution of consumer
consensual resolution of consumer
consensual resolution of consumer
2001/310/EC on the principles for
disputes. When implementing
disputes. When implementing
disputes. When implementing
out-of-court bodies involved in the
provisions on complaints and
provisions on complaints and
provisions on complaints and
consensual resolution of consumer
redress procedures for out-of-court
redress procedures for out-of-court
redress procedures for out-of-court
disputes. When implementing
settlements, Member States should
settlements, Member States should
settlements, Member States should
provisions on complaints and
be encouraged to use existing cross-
be encouraged to use existing
be encouraged to use existing
redress procedures for out-of-court
border cooperation mechanisms,
cross-border cooperation
cross-border cooperation
settlements, Member States should
notably the Financial Services
mechanisms, notably the Financial
mechanisms,
in particular the
be encouraged to use existing
Complaints Network (FIN-Net).
Services Complaints Network
Financial Services Complaints
cross-border cooperation
(FIN-Net).
Network (FIN-Net).
mechanisms,
in particular the
Financial Services Complaints
Network (FIN-Net).
139.
Rec.
(103) Any exchange or transmission
(103) Any exchange or
(103) Any exchange or
Agreed silence procedure
103
of information between competent
transmission of information
transmission of information
20131008
authorities, other authorities, bodies
between competent authorities,
between competent authorities,
[Subject to legal-linguistic review]
or persons should be in accordance
other authorities, bodies or persons
other authorities, bodies or persons
with the rules on transfer of
should be in accordance with the
should be in accordance with the
(103) Any exchange or
personal data to third countries as
rules on transfer of personal data to
rules on transfer of personal data to
transmission of information
laid down in Directive 95/46/EC of
third countries as laid down in
third countries as laid down in
between competent authorities,
the European Parliament and of the
Directive 95/46/EC of the European
Directive 95/46/EC // Any
other authorities, bodies or persons
Council of 24 October 1995 on the
Parliament and of the Council of 24
exchange or transmission of
should be in accordance with the
protection of individuals with regard
October 1995 on the protection of
personal data by ESMA with third
rules on transfer of personal data to
to the processing of personal data
individuals with regard to the
countries should be in accordance
third countries as laid down in
and on the free movement of such
processing of personal data and on
with the rules on the transfer of
Directive 95/46/EC // Any
data69. Any exchange or
the free movement of such data
2119.
personal data as laid down in
exchange or transmission of
66 OJ L 115, 17.4.1998, p. 31.
18 OJ L 115, 17.4.1998, p. 31.
67 OJ L 115, 17.4.1998, p. 31.
68 OJ L 115, 17.4.1998, p. 31.
69 OJ L 281, 23.11.1995, p. 31.
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transmission of personal data by
Any exchange or transmission of
Regulation (EC) No 45/2001.
personal data by ESMA with third
ESMA with third countries should
personal data by ESMA with third
countries should be in accordance
be in accordance with the rules on
countries should be in accordance
with the rules on the transfer of
the transfer of personal data as laid
with the rules on the transfer of
personal data as laid down in
down in Regulation (EC) No
personal data as laid down in
Regulation (EC) No 45/2001.
45/2001.
Regulation (EC) No 45/2001.
140.
Rec.
(104) It is necessary to reinforce
(104) It is necessary to reinforce
(104) It is necessary to reinforce
Agreed silence procedure
104
provisions on exchange of
provisions on exchange of
provisions on exchange of
20131008
information between national
information between national
information between national
(104) It is necessary to reinforce
competent authorities and to
competent authorities and to
competent authorities and to
provisions on exchange of
strengthen the duties of assistance
strengthen the duties of assistance
strengthen the duties of assistance
information between national
and cooperation which they owe to
and cooperation which they owe to
and cooperation which they owe to
competent authorities and to
each other. Due to increasing cross-
each other. Due to increasing cross-
each other. Due to increasing cross-
strengthen the duties of assistance
border activity, competent
border activity, competent
border activity, competent
and cooperation which they owe to
authorities should provide each
authorities should provide each
authorities should provide each
each other. Due to increasing cross-
other with the relevant information
other with the relevant information
other with the relevant information
border activity, competent
for the exercise of their functions, so
for the exercise of their functions,
for the exercise of their functions,
authorities should provide each
as to ensure the effective
so as to ensure the effective
so as to ensure the effective
other with the relevant information
enforcement of this Directive,
enforcement of this Directive,
enforcement of this Directive,
for the exercise of their functions,
including in situations where
including in situations where
including in situations where
so as to ensure the effective
infringements or suspected
infringements or suspected
infringements or suspected
enforcement of this Directive,
infringements may be of concern to
infringements may be of concern to
infringements may be of concern to
including in situations where
authorities in two or more Member
authorities in two or more Member
authorities in two or more Member
infringements or suspected
States. In the exchange of
States. In the exchange of
States. In the exchange of
infringements may be of concern to
information, strict professional
information, strict professional
information, strict professional
authorities in two or more Member
secrecy is needed to ensure the
secrecy is needed to ensure the
secrecy is needed to ensure the
States. In the exchange of
smooth transmission of that
smooth transmission of that
smooth transmission of that
information, strict professional
information and the protection of
information and the protection of
information and the protection of
secrecy is needed to ensure the
particular rights.
particular rights.
particular rights.
smooth transmission of that
information and the protection of
particular rights.
141
Technical group 20140128
a.
(104a) Where the operation of a
trading venue that has established
2119 OJ L 281, 23.11.1995, p. 31.
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arrangements in a Host Member
State has become of substantial
importance for the functioning of
the securities markets and the
protection of the investors in that
Host Member State, the
proportionate cooperation
arrangements to be put in place
should take the appropriate form
amongst possible cooperation
modalities between the competent
authorities of the Home and Host
Member States, proportionate to
the needs for cross-border
supervisory cooperation in
particular resulting from the nature
and scale of the impact on the
securities markets and the investor
protection in the host member state,
such as ad hoc or periodic
information sharing, consultation
and assistance.
141.
Rec.
(105) The European Parliament
(105) The European Parliament
▌
Agreed silence procedure
105
should be given a period of three
should be given a period of three
20131008
months from the first transmission
months from the first transmission
[note: recital no longer needed, as
of draft amendments and
of draft amendments and
related to previous type of
implementing measures to allow it
implementing measures to allow it
implementing measures]
to examine them and to give its
to examine them and to give its
opinion. However, in urgent and
opinion. However, in urgent and
▌
duly justified cases, it should be
duly justified cases, it should be
possible to shorten that period. If,
possible to shorten that period. If,
within that period, a resolution is
within that period, a resolution is
adopted by the European
adopted by the European
Parliament, the Commission should
Parliament, the Commission should
re-examine the draft amendments or
re-examine the draft amendments
measures.
or measures.
142.
Rec.
(106) In order to attain the
(106) In order to attain the
(106)
The power to adopt acts in
Technical group 20140128
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106
objectives set out in this Directive,
objectives set out in this Directive,
accordance with Article 290
TFEU
Note: the whole list needs to be
the power to adopt acts in
the power to adopt acts in
should be delegated to the
checked to ensure alignment with
accordance with Article 290 of the
accordance with Article 290 of the
Commission in respect of details
empowerments for DA in Articles.
Treaty should be delegated to the
Treaty should be delegated to the
concerning exemptions, the
Not yet done.
Commission in respect of details
Commission in respect of details
specification of
certain definitions,
concerning exemptions, the
concerning exemptions, the
the criteria for the assessment of
(106) In order to attain the
clarification of definitions, the
clarification of definitions, the
proposed acquisitions of an
objectives set out in this Directive,
criteria for the assessment of
criteria for the assessment of
investment firm, the organisational
the power to adopt acts in
proposed acquisitions of an
proposed acquisitions of an
requirements for investment firms,
accordance with Article 290 of the
investment firm, the organisational
investment firm, the organisational
the management of conflicts of
Treaty should be delegated to the
requirements for investment firms,
requirements for investment firms,
interest, conduct of business
Commission in respect of details
the management of conflicts of
the management of conflicts of
obligations in the provision of
concerning exemptions, the
interest, conduct of business
interest, conduct of business
investment services, the execution
clarification of definitions, the
obligations in the provision of
obligations in the provision of
of orders on terms most favourable
criteria for the assessment of
investment services, the execution
investment services, the execution
to the client, the handling of client
proposed acquisitions of an
of orders on terms most favourable
of orders on terms most favourable
orders, the transactions with
investment firm, the organisational
to the client, the handling of client
to the client, the handling of client
eligible counterparties, the SME
requirements for investment firms,
orders, the transactions with eligible
orders, the transactions with
growth markets, the conditions for
the management of conflicts of
counterparties, the SME growth
eligible counterparties, the SME
the assessment of initial capital of
interest, conduct of business
markets, the conditions for the
growth markets, the conditions for
third-country firms, measures
obligations in the provision of
assessment of initial capital of third
the assessment of initial capital of
concerning systems resilience,
investment services, the execution
country firms, measures concerning
third country firms, measures
circuit breakers and electronic
of orders on terms most favourable
systems resilience, circuit breakers
concerning systems resilience,
trading, the admission of financial
to the client, the handling of client
and electronic trading, the
circuit breakers and electronic
instruments to trading, the
orders, the transactions with
admission of financial instruments
trading, the admission of financial
suspension and removal of financial
eligible counterparties, the SME
to trading, the suspension and
instruments to trading, the
instruments from trading, the
growth markets,
the thresholds
removal of financial instrtuments
suspension and removal of financial
thresholds for position reporting
above which the position
from trading, the thresholds for
instruments from trading, the
held by categories of traders, the
reporting obligations apply,the
position reporting held by categories
thresholds for position reporting
conditions for the assessment of
clarification of what constitutes a
of traders, the cooperation between
held by categories of traders, the
reasonable commercial basis for
initial capital of third country firms,
competent authorities. It is of
cooperation between competent
measures concerning systems
an APA to make information
particular importance that the
authorities. It is of particular
resilience, circuit breakers and
public, for CTPs to provide access
Commission carries out appropriate
importance that the Commission
electronic trading, the admission of
to data streams and for an
consultations during its preparatory
carries out appropriate
financial instruments to trading, the
approved reporting mechanism
work, including at expert level. The
consultations during its preparatory
(ARM) to report information, the
suspension and removal of financial
Commission, when preparing and
work, including at expert level. The
instruments from trading, the
clarification of details of the
drawing up delegated acts, should
Commission, when preparing and
thresholds for position reporting
information obligation on CTP,
ensure a simultaneous, timely and
drawing up delegated acts, should
the cooperation between competent
held by categories of traders, the
cooperation between competent
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appropriate transmission of relevant
ensure a simultaneous, timely and
authorities. It is of particular
authorities. It is of particular
documents to the European
appropriate transmission of relevant
importance that the Commission
importance that the Commission
Parliament and to the Council.
documents to the European
carry out appropriate consultations
carries out appropriate
Parliament and to the Council.
during its preparatory work,
consultations during its preparatory
including at expert level. The
work, including at expert level. The
Commission, when preparing and
Commission, when preparing and
drawing up delegated acts, should
drawing up delegated acts, should
ensure a simultaneous, timely and
ensure a simultaneous, timely and
appropriate transmission of relevant
appropriate transmission of relevant
documents to the European
documents to the European
Parliament and to the Council.
Parliament and to the Council.
143.
Rec.
(107) In order to ensure uniform
(107) In order to ensure uniform
(107) In order to ensure uniform
Technical group 20140128
107
conditions for the implementation of
conditions for the implementation
conditions for the implementation
[…]
this Directive, implementing powers
of this Directive, implementing
of this Directive, implementing
should be conferred on the
powers should be conferred on the
powers should be conferred on the
Commission. These powers relate to
Commission. These powers relate
Commission. These powers
should
Note: deletion suggested as there
the adoption of the equivalence
to the […] sending of positions
relate to the adoption of the
seems to be no IAs in the final text;
decision concerning third country
reports by categories of traders to
effective equivalence decision
to be checked
legal and supervisory framework for
ESMA and they should be
concerning third country legal and
the provision of services by third
exercised in accordance with
supervisory framework for the
country firms and the sending of
Regulation (EU) No 182/2011 of
provision of services by
third-
positions reports by categories of
the European Parliament and of the
country firms and they should be
traders to ESMA and they should be
Council of 16 February 2011 laying
exercised in accordance with
exercised in accordance with
down the rules and general
Regulation (EU) No 182/2011 of
Regulation (EU) No 182/2011 of the
principles concerning mechanisms
the European Parliament and of the
European Parliament and of the
for control by Member States of the
Council of 16 February 2011 laying
Council of 16 February 2011 laying
Commission's exercise of
down the rules and general
down the rules and general
implementing powers
20.
principles concerning mechanisms
principles concerning mechanisms
for control by Member States of the
for control by Member States of the
Commission's exercise of
Commission's exercise of
implementing powers71.
implementing powers70.
70 OJ L 55, 28.2.2011, p. 13.
20 OJ L 55, 28.2.2011, p. 13.
71 OJ L 55, 28.2.2011, p. 13
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144.
Rec.
(108) Technical standards in
(108) Technical standards in
(108) Technical standards in
Techncial group 20140128
108
financial services should ensure
financial services should ensure
financial services should ensure
T: inclusion or not of last sentence
consistent harmonisation and
consistent harmonisation and
consistent harmonisation and
adequate protection of depositors,
adequate protection of depositors,
adequate protection of depositors,
investors and consumers across the
investors and consumers across the
investors and consumers across the
(108) Technical standards in
Union. As a body with highly
Union. As a body with highly
European Union. As a body with
financial services should ensure
specialised expertise, it would be
specialised expertise, it would be
highly specialised expertise, it
consistent harmonisation and
efficient and appropriate to entrust
efficient and appropriate to entrust
would be efficient and appropriate
adequate protection of, investors,
ESMA, with the elaboration of draft
ESMA, with the elaboration of
to entrust ESMA, with the
including those investing in
regulatory and implementing
draft regulatory and implementing
elaboration of draft regulatory and
structured deposits, and consumers
technical standards which do not
technical standards which do not
implementing technical standards
across the
European Union. As a
involve policy choices, for
involve policy choices, for
which do not involve policy
body with highly specialised
submission to the Commission.
submission to the Commission.
choices, for submission to the
expertise, it would be efficient and
Commission.
To ensure consistent
appropriate to entrust ESMA, with
investor and consumer protection
the elaboration of draft regulatory
across financial services sectors,
and implementing technical
ESMA should carry out its tasks,
standards which do not involve
to the extent possible, in close
policy choices, for submission to
cooperation with the other two
the Commission.
European Supervisory Authorities
within the framework of the Joint
To ensure consistent investor and
Committee of the European
consumer protection across
Supervisory Authorities.
financial services sectors, ESMA
should carry out its tasks, to the
extent possible, in close
cooperation with the other two
European Supervisory Authorities.
145.
Rec.
(109) The Commission should adopt
(109) The Commission should
(109) The Commission should
Technical group 20140128
109
the draft regulatory technical
adopt the draft regulatory technical
adopt the // regulatory technical
T: to be adapted to Articles on
standards developed by ESMA in
standards developed by ESMA in
standards developed by ESMA
regulatory technical standards, once
Article 7 regarding procedures for
Article 2 regarding exemptions that
specifying the criteria for
decided
granting and refusing requests for
relate to activities considered to be
determining whether an activity is
authorisation of investment firms,
ancillary to the main business,,
ancillary to the main business, //
Note: the whole list needs to be
Articles 9 and 48 regarding
Article 7 regarding procedures for
regarding procedures for granting
checked to ensure alignment with
requirements for management
granting and refusing requests for
and refusing requests for
empowerments for RTS in Articles.
bodies, Article 12 regarding
authorisation of investment firms,
authorisation of investment firms, //
Not yet done.
acquisition of qualifying holding,
Articles 9 and 48 regarding
regarding requirements for
(109) The Commission should
Article 27 regarding obligation to
requirements for management
management bodies, // regarding
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execute orders on terms most
bodies, Article 12 regarding
acquisition of qualifying holding, //
adopt the draft regulatory technical
favourable to clients, Articles 34
acquisition of qualifying holding,
regarding obligation to execute
standards developed by ESMA in
and 54 regarding cooperation and
Article 13 regarding the assessment
orders on terms most favourable to
Article 2 regarding exemptions that
exchange of information, Article 36
of a proposed acquisition, Article
clients, // regarding cooperation and
relate to activities considered to be
regarding freedom to provide
17 regarding algorithmic trading,
exchange of information, //
ancillary to the main business,
investment services and activities,
Article 20 regarding the definition
regarding freedom to provide
Article 7 regarding the information
Article 37 regarding establishment
of matched principal trading,
investment services and activities,
to be provided and certain
of a branch, Article 44 regarding
Article 27 regarding obligation to
// regarding establishment of a
requirements in the context of
provision of services by third
execute orders on terms most
branch, // regarding provision of
procedures for granting and
country firms, Article 63 regarding
favourable to clients, Article 31
services by
third-country firms,
in
refusing requests for authorisation
procedures for granting and refusing
regarding the monitoring of
regarding the limits on holdings of
of investment firms, Articles 9 and
requests for authorisation of data
compliance with the rules of the
certain commodity derivatives and
48 regarding requirements for
reporting services providers,
MTF or the OTF and with other
further specifying the position
management bodies, Article 12
Articles 66 and 67 regarding
legal obligations, Article 36
checks applicable to other
regarding acquisition of qualifying
organisational requirements for
regarding freedom to provide
commodity derivatives, // regarding
holding, Article 13 regarding the
APAs and CTPs and Article 84
investment services and activities,
procedures for granting and
assessment of a proposed
regarding cooperation among
Article 37 regarding establishment
refusing requests for authorisation
acquisition, Article 17 regarding
competent authorities. The
of a branch, Article 44 regarding
of data reporting services providers,
algorithmic trading, Article 20
Commission should adopt these
provision of services by third
regarding organisational
regarding the definition of matched
draft regulatory technical standards
country firms, Article 51 regarding
requirements for APAs and CTPs
principal trading, Article 27
by means of delegated acts pursuant
systems resilience, circuit breakers
and regarding cooperation among
regarding obligation to execute
to Article 290 TFEU and in
and electronic trading, Article 56
competent authorities. The
orders on terms most favourable to
accordance with Articles 10 to 14 of
regarding the monitoring of
Commission should adopt
those //
clients, Article 31 regarding the
Regulation (EU) No 1093/2010.
compliance with the rules of the
regulatory technical standards by
monitoring of compliance with the
regulated market and with other
means of delegated acts pursuant to
rules of the MTF or the OTF and
legal obligations, Article 59
Article 290 TFEU and in
with other legal obligations, Article
regarding the position limits and
accordance with Articles 10 to 14
36 regarding freedom to provide
position management controls in
of Regulation (EU) No
1095/2010.
investment services and activities,
commodity derivatives, Article 63
Article 37 regarding establishment
regarding procedures for granting
of a branch, Article 44 regarding
and refusing requests for
provision of services by third
authorisation of data reporting
country firms, Article 51 regarding
services providers, Articles 66 & 67
systems resilience, circuit breakers
regarding organisational
and electronic trading, Article 56
requirements for […] CTPs and
regarding the monitoring of
APAs and Article 84 regarding
compliance with the rules of the
cooperation among competent
regulated market and with other
authorities. The Commission
legal obligations, Article 59
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should adopt these draft regulatory
regarding the position limits and
technical standards by means of
position management controls in
delegated acts pursuant to Article
commodity derivatives, Article 63
290 TFEU and in accordance with
regarding procedures for granting
Articles 10 to 14 of Regulation
and refusing requests for
(EU) No 1093/2010.
authorisation of data reporting
services providers, Articles 66 and
67 regarding organisational
requirements for […] CTPs and
APAs and Article 84 regarding
cooperation among competent
authorities. The Commission
should adopt these draft regulatory
technical standards by means of
delegated acts pursuant to Article
290 TFEU and in accordance with
Articles 10 to 14 of Regulation
(EU) No 1093/2010.
Technical group 20140206
Reference to Articles 66 and 67
added back in, as they provide for
RTS
All Article references to be checked
during legal-linguistic revision
146.
Rec.
(110) The Commission should also
(110) The Commission should also
(110) The Commission should also
Technical group 20140128
110
be empowered to adopt
be empowered to adopt
be empowered to adopt
T: to be adapted to Articles on
implementing technical standards by
implementing technical standards
implementing technical standards
implementing technical standards,
means of implementing acts
by means of implementing acts
developed by ESMA regarding
once decided
pursuant to Article 291 TFEU and
pursuant to Article 291 TFEU and
procedures for granting and
in accordance with Article 15 of
in accordance with Article 15 of
refusing requests for authorisation
Note: the whole list needs to be
Regulation (EU) No 1095/2010.
Regulation (EU) No 1095/2010.
of investment firms, // regarding
checked to ensure alignment with
ESMA should be entrusted with
ESMA should be entrusted with
acquisition of qualifying holding, //
empowerments for ITS in Articles.
drafting implementing technical
drafting implementing technical
regarding
the trading process on
Not yet done.
standards for submission to the
standards for submission to the
finalisation of transactions in MTFs
(110) The Commission should also
Commission with regard to Article 7
Commission with regard to Article
and OTFs, // regarding
the
be empowered to adopt
regarding procedures for granting
7 regarding procedures for granting
suspension and removal of
implementing technical standards
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and refusing requests for
and refusing requests for
instruments from trading, //
by means of implementing acts
authorisation of investment firms,
authorisation of investment firms,
regarding freedom to provide
pursuant to Article 291 TFEU and
Article 12 regarding acquisition of
Article 12 regarding acquisition of
investment services and activities,
in accordance with Article 15 of
qualifying holding, Article 18
qualifying holding, Article 18
// regarding
the establishment of a
Regulation (EU) No 1095/2010.
regarding trading process on
regarding trading process on
branch, // regarding provision of
ESMA should be entrusted with
finalisation of transactions in MTFs
finalisation of transactions in MTFs
services by
third-country firms, //
drafting implementing technical
and OTFs, Articles 32, 33 and 53
and OTFs, Articles 32 […] and 53
regarding position reporting by
standards for submission to the
regarding suspension and removal
regarding suspension and removal
categories of traders, // regarding
Commission with regard to Article
of instruments from trading, Article
of instruments from trading, Article
the submission of information to
7 regarding procedures for granting
36 regarding freedom to provide
36 regarding freedom to provide
ESMA, // regarding
the obligation
and refusing requests for
investment services and activities,
investment services and activities,
to cooperate, // regarding
authorisation of investment firms,
Article 37 regarding establishment
Article 37 regarding establishment
cooperation among competent
Article 12 regarding acquisition of
of a branch, Article 44 regarding
of a branch, Article 44 regarding
authorities, // regarding exchange
qualifying holding, Article 18
provision of services by third
provision of services by third
of information and // regarding
regarding trading process on
country firms, Article 60 regarding
country firms, Article 60 regarding
consultation prior to authorisation.
finalisation of transactions in MTFs
position reporting by categories of
position reporting by categories of
The Commission should adopt
and OTFs, Articles 32 […] and 53
traders, Article 78 regarding
traders, Article 63 regarding
those implementing technical
regarding suspension and removal
submission of information to
procedures for granting and
standards by means of
of instruments from trading, Article
ESMA, Article 83 regarding
refusing requests for authorisation,
implementing acts pursuant to
36 regarding freedom to provide
obligation to cooperate, Article 84
Article 76 regarding the exercise of
Article 291 TFEU and in
investment services and activities,
regarding cooperation among
supervisory and sanctioning
accordance with Article 15 of
Article 37 regarding establishment
competent authorities, Article 85
powers, Article 83 regarding
Regulation (EU) No 1095/2010.
of a branch, Article 44 regarding
regarding exchange of information
obligation to cooperate, Article 84
provision of services by third
and Article 88 regarding
regarding cooperation among
country firms, Article 60 regarding
consultation prior to authorisation.
competent authorities, Article 85
position reporting by categories of
regarding exchange of information
traders, Article 63 regarding
and Article 88 regarding
procedures for granting and
consultation prior to authorisation.
refusing requests for authorisation,
Article 7
5b regarding the
procedures
and forms for
submitting information for the
exercise of supervisory and
sanctioning powers, Article 83
regarding obligation to cooperate,
Article 84 regarding cooperation
among competent authorities,
Article 85 regarding exchange of
information and Article 88
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regarding consultation prior to
authorisation.
Technical group 20140206
Article reference to Article 75b to
be checked, reference is to row
1202 (which is no longer Article
73)
Drafting adapted above to row
1202
147.
Rec.
(111) The Commission should
(111) The Commission should
(111) The Commission should
Agreed
silence
procedure
111
submit a report to the European
submit a report to the European
submit a report to the European
20131008
Parliament and the Council
Parliament and the Council
Parliament and the Council
(111) The Commission should
assessing the functioning of
assessing the functioning of OTFs
,
assessing the functioning of
submit a report to the European
organised trading facilities, the
the functioning of the regime for
organised trading facilities, the
Parliament and the Council
functioning of the regime for SME
SME growth markets, the impact of
functioning of the regime for SME
assessing the functioning of
growth markets, the impact of
requirements regarding automated
growth markets, the impact of
organised trading facilities, the
requirements regarding automated
and high-frequency trading, the
requirements regarding automated
functioning of the regime for SME
and high-frequency trading, the
experience with the mechanism for
and high-frequency trading, the
growth markets, the impact of
experience with the mechanism for
banning certain products or
experience with the mechanism for
requirements regarding automated
banning certain products or
practices and the impact of the
banning certain products or
and high-frequency trading, the
practices and the impact of the
measures regarding commodity
practices and the impact of the
experience with the mechanism for
measures regarding commodity
derivatives markets.
measures regarding commodity
banning certain products or
derivatives markets.
derivatives markets.
practices and the impact of the
measures regarding commodity
derivatives markets.
147
Trilogue 20140114: Agreed to
aa.
include Pres. non-paper on Annex
IC6 with additions/modifications
(111aa) At the latest by 1 January
2018, the Commission should
prepare a report assessing the
potential impact on energy prices
and the functioning of the energy
market of the expiry of the
transitional period foreseen for
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the application of the clearing
obligation and the margining
requirements
set
out
in
Regulation (EU) No. 648/2012
(EMIR). If appropriate, the
Commission should submit a
legislative proposal to establish or
amend the relevant legislation,
including
specific
sectoral
legislation such as Regulation
(EU) No. 1227/2011 (REMIT).
147
Trilogue 20131218: agreed to
a.
include changes from non-paper on
AIFMD
(111a)
Directive
2011/61/EU
allows Member States to authorise
Alternative
Investment
Fund
Managers ('AIFMs') to provide
certain investment services in
addition
to
the
collective
management
of
alternative
investment funds ('AIFs'), including
services
of
management
of
portfolios
of
investments,
investment advice, safe-keeping
and administration in relation to
shares or units of collective
investment undertakings, as well as
reception and transmission of
orders in relation to financial
instruments. Since the requirements
governing the provision of those
services are harmonised within the
Union, AIFMs authorised by their
home competent authorities to
provide those services should not
be subject to any additional
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authorisation in host Member States
nor to any other measure having the
same effect.
147
Trilogue 20131218: agreed to
b.
include changes from non-paper on
AIFMD
(111b) Under the current legal
framework, AIFMs authorised to
provide those investment services
and intending to provide them in
Member States other than their
home Member State must comply
with
additional
national
requirements,
including
the
establishment of a separate legal
entity. In order to eliminate
obstacles
in
the
cross-border
provision of harmonised investment
services and to ensure a level
playing field between entities
providing the same investment
services under the same legal
requirements, an AIFM authorised
to provide those services should be
able to provide them on a cross-
border basis, subject to appropriate
notification requirements, under the
authorisation
granted
by
the
competent authorities of their home
Member State.
147
Trilogue 20131218: agreed to
c.
include changes from non-paper on
AIFMD
(111c)
Directive
2011/61/EU
should
therefore
be
amended
accordingly.
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148.
Rec.
(112) The objective of creating an
(112) The objective of creating an
(112)
Since the objective of
this
Agreed silence procedure
112
integrated financial market, in
integrated financial market, in
Directive, namely creating an
20131008
which investors are effectively
which investors are effectively
integrated financial market in
(112)
Since the objective of
this
protected and the efficiency and
protected and the efficiency and
which investors are effectively
Directive, namely creating an
integrity of the overall market are
integrity of the overall market are
protected and the efficiency and
integrated financial market in
safeguarded, requires the
safeguarded, requires the
integrity of the overall market are
which investors are effectively
establishment of common regulatory
establishment of common
safeguarded, requires the
protected and the efficiency and
requirements relating to investment
regulatory requirements relating to
establishment of common
integrity of the overall market are
firms wherever they are authorised
investment firms wherever they are
regulatory requirements relating to
safeguarded, requires the
in the Union and governing the
authorised in the Union and
investment firms wherever they are
establishment of common
functioning of regulated markets
governing the functioning of
authorised in the
European Union
regulatory requirements relating to
and other trading systems so as to
regulated markets and other trading
and governing the functioning of
investment firms wherever they are
prevent opacity or disruption on one
systems so as to prevent opacity or
regulated markets and other trading
authorised in the
European Union
market from undermining the
disruption on one market from
systems so as to prevent opacity or
and governing the functioning of
efficient operation of the European
undermining the efficient operation
disruption on one market from
regulated markets and other trading
financial system as a whole. Since
of the European financial system as
undermining the efficient operation
systems so as to prevent opacity or
this objective may be better
a whole. Since this objective may
of the European financial system as
disruption on one market from
achieved at Union level, the Union
be better achieved at Union level,
a whole
and can therefore, by
undermining the efficient operation
may adopt measures in accordance
the Union may adopt measures in
reason of the scale and effects of
of the European financial system as
with the principle of subsidiarity as
accordance with the principle of
this Directive, // be better achieved
a whole
and can therefore, by
set out in Article 5 of the Treaty. In
subsidiarity as set out in Article 5
at Union level, the Union may
reason of the scale and effects of
accordance with the principle of
of the Treaty. In accordance with
adopt measures in accordance with
this Directive, // be better achieved
proportionality, as set out in that
the principle of proportionality, as
the principle of subsidiarity as set
at Union level, the Union may
Article, this Directive does not go
set out in that Article, this Directive
out in Article 5 of the
Treaty on
adopt measures in accordance with
beyond what is necessary in order to
does not go beyond what is
European Union. In accordance
the principle of subsidiarity as set
achieve this objective
necessary in order to achieve this
with the principle of
out in Article 5 of the
Treaty on
objective
.
proportionality, as set out in that
European Union. In accordance
Article, this Directive does not go
with the principle of
beyond what is necessary in order
proportionality, as set out in that
to achieve this objective.
Article, this Directive does not go
beyond what is necessary in order
to achieve this objective.
149.
Rec.
(113) The establishment of a
(113) The establishment of a
(113) The establishment of a
Technical group 20140128
113
consolidated tape for non-equity
consolidated tape for non-equity
consolidated tape for non-equity
[Move this recital to follow recital
instruments is deemed to be more
instruments is deemed to be more
instruments is deemed to be more
104 as subsequent recitals relate to
difficult to implement than the
difficult to implement than the
difficult to implement than the
final provisions rather than
consolidated tape for equity
consolidated tape for equity
consolidated tape for equity
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instruments and potential providers
instruments and potential providers
instruments and potential providers
substance]
should be able to to gain experience
should be able
[…] to gain
should be able to gain experience
Or move after row 147 which also
with the latter before constructing it.
experience with the latter before
with the latter before constructing
deals with report
In order to facilitate the proper
constructing it. In order to facilitate
it. In order to facilitate the proper
establishment of the consolidated
the proper establishment of the
establishment of the consolidated
(113) The establishment of a
tape for non-equity financial
consolidated tape for non-equity
tape for non-equity financial
consolidated tape for non-equity
instruments, it is therefore
financial instruments, it is therefore
instruments, it is therefore
instruments is deemed to be more
appropriate to provide for an
appropriate to provide for an
appropriate to provide for an
difficult to implement than the
extended date of application of the
extended date of application of the
extended date of application of the
consolidated tape for equity
national measures transposing the
national measures transposing the
national measures transposing the
instruments and potential providers
relevant provision.
relevant provision.
relevant provision.
Nevertheless it
should be able
[…] to gain
is appropriate to make provision
experience with the latter before
now for a public solution to be
constructing it. In order to facilitate
developed if the commercial
the proper establishment of the
solution does not lead to the timely
consolidated tape for non-equity
delivery an effective and
financial instruments, it is therefore
comprehensive consolidated tape.
appropriate to provide for an
extended date of application of the
national measures transposing the
relevant provision.
Nevertheless it
is appropriate to make provision
now for a consolidated tape to be
put in place through a public
procurement process if the
mechanism envisaged does not
lead to the timely delivery of an
effective and comprehensive
consolidated tape for non-equity
instruments.
Technical group 20140206
Move this recital up after recital 78
150.
Rec.
(113a) In order to further develop
Technical group 20140129
113a
the Union framework governing
[...]
(new)
securities, the Commission should
put forward a proposal for a
regulation on securities law
further specifying the definition of
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safekeeping and administration of
financial instruments and should
also, in conjunction with ESMA,
the European Supervisory
Authority (European Banking
Authority) and the European
Systemic Risk Board promote work
on standardisation of identifiers
and messaging so as to enable
near-real time transaction analysis
and the identification of complex
product structures, such as those
containing derivatives or repos.
150
Trilogue 20140114: Agreed to
a.
include
recital
on
staff
and
resources, cf. row
(113b) Given the increase of tasks
conferred on ESMA by this
Directive and by Regulation (EU)
No
[MiFIR],
the
European
Parliament, the Council and the
Commission should ensure that
adequate human and financial
resources are made available.
151.
Rec.
(114) This Directive respects the
(114) This Directive respects the
(114) This Directive respects the
Agreed silence procedure
114
fundamental rights and observes the
fundamental rights and observes the
fundamental rights and observes the
20131008
principles recognised in the Charter
principles recognised in the Charter
principles recognised in the Charter
(114) This Directive respects the
of Fundamental Rights of the
of Fundamental Rights of the
of Fundamental Rights of the
fundamental rights and observes the
European Union, notably the right
European Union, notably the right
European Union,
in particular the
principles recognised in the Charter
to the protection of personal data,
to the protection of personal data,
right to the protection of personal
of Fundamental Rights of the
the freedom to conduct a business,
the freedom to conduct a business,
data, the freedom to conduct a
European Union,
in particular the
the right to consumer protection, the
the right to consumer protection,
business, the right to consumer
right to the protection of personal
right to an effective remedy and to a
the right to an effective remedy and
protection, the right to an effective
data, the freedom to conduct a
fair trial, the right not to be tried or
to a fair trial, the right not to be
remedy and to a fair trial, the right
business, the right to consumer
punished twice for the same offence
tried or punished twice for the same
not to be tried or punished twice for
protection, the right to an effective
and has to be implemented in
offence and has to be implemented
the same offence and has to be
remedy and to a fair trial, the right
accordance with those rights and
in accordance with those rights and
implemented in accordance with
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principles.
principles.
those rights and principles.
not to be tried or punished twice for
the same offence and has to be
implemented in accordance with
those rights and principles.
151
Note: standard recital where the
a.
need for explanatory documents is
deemed necessary and
proportionate
(114aa new)
In accordance with the Joint
Political Declaration of Member
States and the Commission on
explanatory documents of 28
September 2011, Member States
have undertaken to accompany,
in justified cases, the notification
of their transposition measures
with one or more documents
explaining the relationship
between the components of a
directive and the corresponding
parts of national transposition
instruments. With regard to this
Directive, the legislator considers
the transmission of such
documents to be justified.
152.
Rec.
[See row 8]
(114a) The European Data
Agreed silence procedure
114a
Protection Supervisor has been
20131008
(new)
consulted,
[see row 8. Lawyer linguists to
determine correct place to include]
(114a) The European Data
Protection Supervisor has been
consulted,
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