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Document 02014L0065-20240328
Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (Text with EEA relevance)Text with EEA relevance
Consolidated text: Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (Text with EEA relevance)Text with EEA relevance
Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (Text with EEA relevance)Text with EEA relevance
02014L0065 — EN — 28.03.2024 — 012.001
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DIRECTIVE 2014/65/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (OJ L 173 12.6.2014, p. 349) |
Amended by:
Corrected by:
DIRECTIVE 2014/65/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 15 May 2014
on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU
(recast)
(Text with EEA relevance)
TITLE I
SCOPE AND DEFINITIONS
Article 1
Scope
This Directive establishes requirements in relation to the following:
authorisation and operating conditions for investment firms;
provision of investment services or activities by third-country firms through the establishment of a branch;
authorisation and operation of regulated markets; and
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supervision, cooperation and enforcement by competent authorities.
The following provisions shall also apply to credit institutions authorised under Directive 2013/36/EU, when providing one or more investment services and/or performing investment activities:
Article 2(2), Article 9(3) and Articles 14 and 16 to 20,
Chapter II of Title II excluding second subparagraph of Article 29(2),
Chapter III of Title II excluding Article 34(2) and (3) and Article 35(2) to (6) and (9),
Articles 67 to 75 and Articles 80, 85 and 86.
The following provisions shall also apply to investment firms and to credit institutions authorised under Directive 2013/36/EU when selling or advising clients in relation to structured deposits:
Article 9(3), Article 14, and Article 16(2), (3) and (6);
Articles 23 to 26, Article 28 and Article 29, excluding the second subparagraph of paragraph 2 thereof, and Article 30; and
Articles 67 to 75.
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Article 2
Exemptions
This Directive shall not apply to:
insurance undertakings or undertakings carrying out the reinsurance and retrocession activities referred to in Directive 2009/138/EC when carrying out the activities referred to in that Directive;
persons providing investment services exclusively for their parent undertakings, for their subsidiaries or for other subsidiaries of their parent undertakings;
persons providing an investment service where that service is provided in an incidental manner in the course of a professional activity and that activity is regulated by legal or regulatory provisions or a code of ethics governing the profession which do not exclude the provision of that service;
persons dealing on own account in financial instruments other than commodity derivatives or emission allowances or derivatives thereof and not providing any other investment services or performing any other investment activities in financial instruments other than commodity derivatives or emission allowances or derivatives thereof unless such persons:
are market makers;
are members of or participants in a regulated market or an MTF, except for non-financial entities that execute transactions on a trading venue where such transactions are part of liquidity management or are objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity of those non-financial entities or their groups;
apply a high-frequency algorithmic trading technique; or
deal on own account when executing client orders;
Persons exempt under points (a), (i) or (j) are not required to meet the conditions laid down in this point in order to be exempt.
operators with compliance obligations under Directive 2003/87/EC who, when dealing in emission allowances, do not execute client orders and who do not provide any investment services or perform any investment activities other than dealing on own account, provided that those persons do not apply a high-frequency algorithmic trading technique;
persons providing investment services consisting exclusively in the administration of employee-participation schemes;
persons providing investment services which only involve both the administration of employee-participation schemes and the provision of investment services exclusively for their parent undertakings, for their subsidiaries or for other subsidiaries of their parent undertakings;
the members of the ESCB and other national bodies performing similar functions in the Union, other public bodies charged with or intervening in the management of the public debt in the Union and international financial institutions established by two or more Member States 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;
collective investment undertakings and pension funds whether coordinated at Union level or not and the depositaries and managers of such undertakings;
persons:
dealing on own account, including market makers, in commodity derivatives or emission allowances or derivatives thereof, excluding persons who deal on own account when executing client orders; or
providing investment services, other than dealing on own account, in commodity derivatives or emission allowances or derivatives thereof to the customers or suppliers of their main business;
provided that:
persons providing investment advice in the course of providing another professional activity not covered by this Directive provided that the provision of such advice is not specifically remunerated;
associations set up by Danish and Finnish pension funds with the sole aim of managing the assets of pension funds that are members of those associations;
‘agenti di cambio’ whose activities and functions are governed by Article 201 of Italian Legislative Decree No 58 of 24 February 1998;
transmission system operators as defined in Article 2(4) of Directive 2009/72/EC or Article 2(4) of Directive 2009/73/EC when carrying out their tasks under those Directives, under Regulation (EC) No 714/2009, under Regulation (EC) No 715/2009 or under network codes or guidelines adopted pursuant to those Regulations, any persons acting as service providers on their behalf to carry out their task under those legislative acts or under network codes or guidelines adopted pursuant to those Regulations, and any operator or administrator of an energy balancing mechanism, pipeline network or system to keep in balance the supplies and uses of energy when carrying out such tasks.
That exemption shall apply to persons engaged in the activities set out in this point only where they perform investment activities or provide investment services relating to commodity derivatives in order to carry out those activities. That exemption shall not apply with regard to the operation of a secondary market, including a platform for secondary trading in financial transmission rights;
CSDs except as provided for in Article 73 of Regulation (EU) No 909/2014 of the European Parliament and of the Council ( 1 );
crowdfunding service providers as defined in point (e) of Article 2(1) of Regulation (EU) 2020/1503 of the European Parliament and of the Council ( 2 ).
By 31 July 2021, the Commission shall adopt a delegated act in accordance with Article 89 in order to supplement this Directive by specifying, for the purpose of point (j) of paragraph 1 of this Article, the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level.
Those criteria shall take into account the following elements:
whether the net outstanding notional exposure in commodity derivatives or emission allowances or derivatives thereof for cash settlement traded in the Union, excluding commodity derivatives or emission allowances or derivatives thereof traded on a trading venue, is below an annual threshold of EUR 3 billion; or
whether the capital employed by the group to which the person belongs is predominantly allocated to the main business of the group; or
whether or not the size of the activities referred to in point (j) of paragraph 1 exceeds the total size of the other trading activities at group level.
The activities referred to in this paragraph shall be considered at group level.
The elements referred to in the second subparagraph of this paragraph shall exclude:
intragroup transactions as referred to in Article 3 of Regulation (EU) No 648/2012 that serve group-wide liquidity or risk management purposes;
transactions in commodity derivatives or emission allowances or derivatives thereof that are objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity;
transactions in commodity derivatives or emission allowances or derivatives thereof entered into to fulfil obligations to provide liquidity on a trading venue, where such obligations are required by regulatory authorities in accordance with Union law or with national laws, regulations and administrative provisions, or by trading venues.
Article 3
Optional exemptions
Member States may choose not to apply this Directive to any persons for which they are the home Member State, provided that the activities of those persons are authorised and regulated at national level and those persons:
are not allowed to hold client funds or client securities and which for that reason are not allowed at any time to place themselves in debit with their clients;
are not allowed to provide any investment service except the reception and transmission of orders in transferable securities and units in collective investment undertakings and/or the provision of investment advice in relation to such financial instruments; and
in the course of providing that service, are allowed to transmit orders only to:
investment firms authorised in accordance with this Directive;
credit institutions authorised in accordance with Directive 2013/36/EU;
branches of investment firms or of credit institutions authorised in a third country and which are subject to and comply with prudential rules considered by the competent authorities to be at least as stringent as those laid down in this Directive, in Regulation (EU) No 575/2013 or in Directive 2013/36/EU;
collective investment undertakings authorised under the law of a Member State to market units to the public and to the managers of such undertakings; or
investment companies with fixed capital, as defined in Article 17(7) of Directive 2012/30/EU of the European Parliament and of the Council ( 3 ) the securities of which are listed or dealt in on a regulated market in a Member State; or
provide investment services exclusively in commodities, emission allowances and/or derivatives thereof for the sole purpose of hedging the commercial risks of their clients, where those clients are exclusively local electricity undertakings as defined in Article 2(35) of Directive 2009/72/EC and/or natural gas undertakings as defined in Article 2(1) of Directive 2009/73/EC, and provided that those clients jointly hold 100 % of the capital or of the voting rights of those persons, exercise joint control and are exempt under point (j) of Article 2(1) of this Directive if they carry out those investment services themselves; or
provide investment services exclusively in emission allowances and/or derivatives thereof for the sole purpose of hedging the commercial risks of their clients, where those clients are exclusively operators as defined in point (f) of Article 3 of Directive 2003/87/EC, and provided that those clients jointly hold 100 % of the capital or voting rights of those persons, exercise joint control and are exempt under point (j) of Article 2(1) of this Directive if they carry out those investment services themselves.
Member States’ regimes shall submit the persons referred to in paragraph 1 to requirements which are at least analogous to the following requirements under this Directive:
conditions and procedures for authorisation and on-going supervision as established in Article 5(1) and (3), Articles 7 to 10, 21, 22 and 23 and the corresponding delegated acts adopted by the Commission in accordance with Article 89;
conduct of business obligations as established in Article 24(1), (3), (4), (5), (7) and (10), Article 25(2), (5) and (6), and, where the national regime allows those persons to appoint tied agents, Article 29, and the respective implementing measures;
organisational requirements as laid down in the first, sixth and seventh subparagraph of Article 16(3) and in Article 16(6) and (7) and the corresponding delegated acts adopted by the Commission in accordance with Article 89.
Member States shall require persons exempt from this Directive pursuant to paragraph 1 of this Article to be covered by an investor-compensation scheme recognised in accordance with Directive 97/9/EC. Member States may allow investment firms not to be covered by such a scheme provided they hold professional indemnity insurance where, taking into account the size, risk profile and legal nature of the persons exempt in accordance with paragraph 1 of this Article, equivalent protection to their clients is ensured.
By way of derogation from the second subparagraph of this paragraph, Member States that already have in place such laws, regulations or administrative provisions before 2 July 2014 may until 3 July 2019 require that where the persons exempt from this Directive pursuant to paragraph 1 of this Article provide the investment services of the reception and transmission of orders and/or of the provision of investment advice in units in collective investment undertakings and act as an intermediary with a management company as defined in Directive 2009/65/EC, those persons are jointly and severally liable with the management company for any damages incurred by the client in relation to those services.
Article 4
Definitions
For the purposes of this Directive, the following definitions apply:
‘investment firm’ means any legal person whose regular occupation or business is the provision of one or more investment services to third parties and/or the performance of one or more investment activities on a professional basis.
Member States may include in the definition of investment firms undertakings which are not legal persons, provided that:
their legal status ensures a level of protection for third parties’ interests equivalent to that afforded by legal persons; and
they are subject to equivalent prudential supervision appropriate to their legal form.
However, where a natural person provides services involving the holding of third party funds or transferable securities, that person may be considered to be an investment firm for the purposes of this Directive and of Regulation (EU) No 600/2014 only if, without prejudice to the other requirements imposed in this Directive, in Regulation (EU) No 600/2014, and in Directive 2013/36/EU, that person complies with the following conditions:
the ownership rights of third parties in instruments and funds must be safeguarded, especially in the event of the insolvency of the firm or of its proprietors, seizure, set-off or any other action by creditors of the firm or of its proprietors;
the firm must be subject to rules designed to monitor the firm’s solvency and that of its proprietors;
the firm’s annual accounts must be audited by one or more persons empowered, under national law, to audit accounts;
where the firm has only one proprietor, that person must make provision for the protection of investors in the event of the firm’s cessation of business following the proprietor’s death or incapacity or any other such event;
‘investment services and activities’ means any of the services and activities listed in Section A of Annex I relating to any of the instruments listed in Section C of Annex I.
The Commission shall adopt delegated acts in accordance with Article 89 measures specifying:
the derivative contracts referred to in Section C.6 of Annex I that have the characteristics of wholesale energy products that must be physically settled and C.6 energy derivative contracts;
the derivative contracts referred to in Section C.7 of Annex I that have the characteristics of other derivative financial instruments;
the derivative contracts referred to in Section C.10 of Annex I that have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, an MTF or an OTF;
‘ancillary services’ means any of the services listed in Section B of Annex I;
‘investment advice’ means the provision of personal recommendations to a client, either upon its request or at the initiative of the investment firm, in respect of one or more transactions relating to financial instruments;
‘execution of orders on behalf of clients’ means acting to conclude agreements to buy or sell one or more financial instruments on behalf of clients and includes the conclusion of agreements to sell financial instruments issued by an investment firm or a credit institution at the moment of their issuance;
‘dealing on own account’ means trading against proprietary capital resulting in the conclusion of transactions in one or more financial instruments;
‘market maker’ means a person who holds himself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling financial instruments against that person’s proprietary capital at prices defined by that person;
‘portfolio management’ means managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more financial instruments;
‘switching of financial instruments’ means selling a financial instrument and buying another financial instrument or exercising a right to make a change with regard to an existing financial instrument;
‘client’ means any natural or legal person to whom an investment firm provides investment or ancillary services;
‘professional client’ means a client meeting the criteria laid down in Annex II;
‘retail client’ means a client who is not a professional client;
‘SME growth market’ means a MTF that is registered as an SME growth market in accordance with Article 33;
‘small and medium-sized enterprises’ for the purposes of this Directive, means companies that had an average market capitalisation of less than EUR 200 000 000 on the basis of end-year quotes for the previous three calendar years;
‘limit order’ means an order to buy or sell a financial instrument at its specified price limit or better and for a specified size;
‘financial instrument’ means those instruments specified in Section C of Annex I, including such instruments issued by means of distributed ledger technology;
‘C6 energy derivative contracts’ means options, futures, swaps, and any other derivative contracts mentioned in Section C.6 of Annex I relating to coal or oil that are traded on an OTF and must be physically settled;
‘money-market instruments’ means those classes of instruments which are normally dealt in on the money market, such as treasury bills, certificates of deposit and commercial papers and excluding instruments of payment;
‘market operator’ means a person or persons who manages and/or operates the business of a regulated market and may be the regulated market itself;
‘multilateral system’ means a multilateral system as defined in Article 2(1), point (11), of Regulation (EU) No 600/2014;
‘systematic internaliser’ means an investment firm which, on an organised, frequent and systematic basis, deals on own account in equity instruments by executing client orders outside a regulated market, an MTF or an OTF, without operating a multilateral system, or which opts in to the status of systematic internaliser;
‘regulated market’ means a multilateral system operated and/or managed by a market operator, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments – in the system and in accordance with its non-discretionary rules – in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and/or systems, and which is authorised and functions regularly and in accordance with Title III of this Directive;
‘multilateral trading facility’ or ‘MTF’ means a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments – in the system and in accordance with non-discretionary rules – in a way that results in a contract in accordance with Title II of this Directive;
‘organised trading facility’ or ‘OTF’ means a multilateral system which is not a regulated market or an MTF and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract in accordance with Title II of this Directive;
‘trading venue’ means a regulated market, an MTF or an OTF;
‘liquid market’ means a market for a financial instrument or a class of financial instruments, where there are ready and willing buyers and sellers on a continuous basis, assessed in accordance with the following criteria, taking into consideration the specific market structures of the particular financial instrument or of the particular class of financial instruments:
the average frequency and size of transactions over a range of market conditions, having regard to the nature and life cycle of products within the class of financial instrument;
the number and type of market participants, including the ratio of market participants to traded instruments in a particular product;
the average size of spreads, where available;
‘competent authority’ means the authority, designated by each Member State in accordance with Article 67, unless otherwise specified in this Directive;
‘credit institution’ means a credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No 575/2013;
‘UCITS management company’ means a management company as defined in point (b) of Article 2(1) of Directive 2009/65/EC of the European Parliament and of the Council ( 4 );
‘tied agent’ means a natural or legal person who, under the full and unconditional responsibility of only one investment firm on whose behalf it acts, promotes investment and/or ancillary services to clients or prospective clients, receives and transmits instructions or orders from the client in respect of investment services or financial instruments, places financial instruments or provides advice to clients or prospective clients in respect of those financial instruments or services;
‘branch’ means a place of business other than the head office which is a part of an investment firm, which has no legal personality and which provides investment services and/or activities and which may also perform ancillary services for which the investment firm has been authorised; all the places of business set up in the same Member State by an investment firm with headquarters in another Member State shall be regarded as a single branch;
‘qualifying holding’ means a direct or indirect holding in an investment firm which represents 10 % or more of the capital or of the voting rights, as set out in Articles 9 and 10 of Directive 2004/109/EC of the European Parliament and of the Council ( 5 ), taking into account the conditions regarding aggregation thereof laid down in Article 12(4) and (5) of that Directive, or which makes it possible to exercise a significant influence over the management of the investment firm in which that holding subsists;
‘parent undertaking’ means a parent undertaking within the meaning of Article 2(9) and 22 of Directive 2013/34/EU of the European Parliament and of the Council ( 6 );
‘subsidiary’ means a subsidiary undertaking within the meaning of Articles 2(10) and 22 of Directive 2013/34/EU, including any subsidiary of a subsidiary undertaking of an ultimate parent undertaking;
‘group’ means a group as defined in Article 2(11) of Directive 2013/34/EU;
‘close links’ means a situation in which two or more natural or legal persons are linked by:
participation in the form of ownership, direct or by way of control, of 20 % or more of the voting rights or capital of an undertaking;
‘control’ which means the relationship between a parent undertaking and a subsidiary, in all the cases referred to in Article 22(1) and (2) of Directive 2013/34/EU, or a similar relationship between any natural or legal person and an undertaking, any subsidiary undertaking of a subsidiary undertaking also being considered to be a subsidiary of the parent undertaking which is at the head of those undertakings;
a permanent link of both or all of them to the same person by a control relationship;
‘management body’ means the body or bodies of an investment firm, a market operator, or a data reporting services provider as defined in point (36a) of Article 2(1) of Regulation (EU) No 600/2014, which are appointed in accordance with national law, which are empowered to set the entity’s strategy, objectives and overall direction, and which oversee and monitor management decision-making and include persons who effectively direct the business of the entity.
Where this Directive refers to the management body and, pursuant to national law, the managerial and supervisory functions of the management body are assigned to different bodies or different members within one body, the Member State shall identify the bodies or members of the management body responsible in accordance with its national law, unless otherwise specified by this Directive;
‘senior management’ means natural persons who exercise executive functions within an investment firm, a market operator, or a data reporting services provider as defined in point (36a) of Article 2(1) of Regulation (EU) No 600/2014, and who are responsible and accountable to the management body for the day-to-day management of the entity, including for the implementation of the policies concerning the distribution of services and products to clients by the firm and its personnel;
‘matched principal trading’ means a transaction where the facilitator interposes itself between the buyer and the seller to the transaction in such a way that it is never exposed to market risk throughout the execution of the transaction, with both sides executed simultaneously, and where the transaction is concluded at a price where the facilitator makes no profit or loss, other than a previously disclosed commission, fee or charge for the transaction;
‘algorithmic trading’ means trading in financial instruments where a computer algorithm automatically determines individual parameters of orders such as whether to initiate the order, the timing, price or quantity of the order or how to manage the order after its submission, with limited or no human intervention, and does not include any system that is only used for the purpose of routing orders to one or more trading venues or for the processing of orders involving no determination of any trading parameters or for the confirmation of orders or the post-trade processing of executed transactions;
‘high-frequency algorithmic trading technique’ means an algorithmic trading technique characterised by:
infrastructure intended to minimise network and other types of latencies, including at least one of the following facilities for algorithmic order entry: co-location, proximity hosting or high-speed direct electronic access;
system-determination of order initiation, generation, routing or execution without human intervention for individual trades or orders; and
high message intraday rates which constitute orders, quotes or cancellations;
‘direct electronic access’ means an arrangement where a member or participant or client of a trading venue permits a person to use its trading code so the person can electronically transmit orders relating to a financial instrument directly to the trading venue and includes arrangements which involve the use by a person of the infrastructure of the member or participant or client, or any connecting system provided by the member or participant or client, to transmit the orders (direct market access) and arrangements where such an infrastructure is not used by a person (sponsored access);
‘cross-selling practice’ means the offering of an investment service together with another service or product as part of a package or as a condition for the same agreement or package;
‘structured deposit’ means a deposit as defined in point (3) of Article 2(1) of Directive 2014/49/EU of the European Parliament and of the Council ◄ ( 7 ), which is fully repayable at maturity on terms under which interest or a premium will be paid or is at risk, according to a formula involving factors such as:
an index or combination of indices, excluding variable rate deposits whose return is directly linked to an interest rate index such as Euribor or Libor;
a financial instrument or combination of financial instruments;
a commodity or combination of commodities or other physical or non-physical non-fungible assets; or
a foreign exchange rate or combination of foreign exchange rates;
‘transferable securities’ means those classes of securities which are negotiable on the capital market, with the exception of instruments of payment, such as:
shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares;
bonds or other forms of securitised debt, including depositary receipts in respect of such securities;
any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures;
‘make-whole clause’ means a clause that aims to protect the investor by ensuring that, in the event of early redemption of a bond, the issuer is required to pay to the investor holding the bond an amount equal to the sum of the net present value of the remaining coupon payments expected until maturity and the principal amount of the bond to be redeemed;
‘depositary receipts’ means those securities which are negotiable on the capital market and which represent ownership of the securities of a non-domiciled issuer while being able to be admitted to trading on a regulated market and traded independently of the securities of the non-domiciled issuer;
‘exchange-traded fund’ means a fund of which at least one unit or share class is traded throughout the day on at least one trading venue and with at least one market maker which takes action to ensure that the price of its units or shares on the trading venue does not vary significantly from its net asset value and, where applicable, from its indicative net asset value;
‘certificates’ means certificates as defined in Article 2(1)(27) of Regulation (EU) No 600/2014;
‘structured finance products’ means structured finance products as defined in Article 2(1)(28) of Regulation (EU) No 600/2014;
‘derivatives’ means derivatives as defined in Article 2(1)(29) of Regulation (EU) No 600/2014;
‘commodity derivatives’ means commodity derivatives as defined in Article 2(1)(30) of Regulation (EU) No 600/2014;
‘CCP’ means a CCP as defined in Article 2(1) of Regulation (EU) No 648/2012;
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‘home Member State’ means:
in the case of investment firms:
if the investment firm is a natural person, the Member State in which its head office is situated;
if the investment firm is a legal person, the Member State in which its registered office is situated;
if the investment firm has, under its national law, no registered office, the Member State in which its head office is situated;
in the case of a regulated market, the Member State in which the regulated market is registered or, if under the law of that Member State it has no registered office, the Member State in which the head office of the regulated market is situated;
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‘host Member State’ means the Member State, other than the home Member State, in which an investment firm has a branch or provides investment services and/or activities, or the Member State in which a regulated market provides appropriate arrangements so as to facilitate access to trading on its system by remote members or participants established in that same Member State;
‘third-country firm’ means a firm that would be a credit institution providing investment services or performing investment activities or an investment firm if its head office or registered office were located within the Union;
‘wholesale energy product’ means wholesale energy products as defined in point (4) of Article 2 of Regulation (EU) No 1227/2011;
‘agricultural commodity derivatives’ means derivative contracts relating to products listed in Article 1 of, and Annex I, Parts I to XX and XXIV/1, to, Regulation (EU) No 1308/2013 of the European Parliament and of the Council ( 8 ), as well as to products listed in Annex I to Regulation (EU) No 1379/2013 of the European Parliament and of the Council ( 9 );
‘sovereign issuer’ means any of the following that issues debt instruments:
the Union;
a Member State, including a government department, an agency, or a special purpose vehicle of the Member State;
in the case of a federal Member State, a member of the federation;
a special purpose vehicle for several Member States;
an international financial institution established by two or more Member States which has the purpose of mobilising funding and provide financial assistance to the benefit of its members that are experiencing or threatened by severe financing problems; or
the European Investment Bank;
‘sovereign debt’ means a debt instrument issued by a sovereign issuer;
‘durable medium’ means any instrument which:
enables a client to store information addressed personally to that client in a way accessible for future reference and for a period of time adequate for the purposes of the information; and
allows the unchanged reproduction of the information stored;
‘electronic format’ means any durable medium other than paper;
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‘central securities depository’ or ‘CSD’ means a central securities depository as defined in point (1) of Article 2(1) of Regulation (EU) No 909/2014;
‘predominantly commercial group’ means any group of which the main business is not the provision of investment services within the meaning of this Directive, or the performance of any activity listed in Annex I to Directive 2013/36/EU, or acting as a market maker in relation to commodity derivatives.
TITLE II
AUTHORISATION AND OPERATING CONDITIONS FOR INVESTMENT FIRMS
CHAPTER I
Conditions and procedures for authorisation
Article 5
Requirement for authorisation
ESMA shall establish a list of all investment firms in the Union. That list shall contain information on the services or activities for which each investment firm is authorised and it shall be updated on a regular basis. ESMA shall publish and keep up-to-date that list on its website.
Where a competent authority has withdrawn an authorisation in accordance with points (b), (c) and (d) of Article 8, that withdrawal shall be published on the list for a period of five years.
Each Member State shall require that:
any investment firm which is a legal person have its head office in the same Member State as its registered office;
any investment firm which is not a legal person or any investment firm which is a legal person but under its national law has no registered office, have its head office in the Member State in which it actually carries out its business.
Article 6
Scope of authorisation
Article 7
Procedures for granting and refusing requests for authorisation
ESMA shall develop draft regulatory technical standards to specify:
the information to be provided to the competent authorities under paragraph 2 of this Article including the programme of operations;
the requirements applicable to the management of investment firms under Article 9(6) and the information for the notifications under Article 9(5);
the requirements applicable to shareholders and members with qualifying holdings, as well as obstacles which may prevent effective exercise of the supervisory functions of the competent authority, under Article 10(1) and (2).
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 8
Withdrawal of authorisations
The competent authority may withdraw the authorisation issued to an investment firm where such an investment firm:
does not make use of the authorisation within 12 months, expressly renounces the authorisation or has provided no investment services or performed no investment activity for the preceding six months, unless the Member State concerned has provided for authorisation to lapse in such cases;
has obtained the authorisation by making false statements or by any other irregular means;
no longer meets the conditions under which authorisation was granted, such as compliance with the conditions set out in Regulation (EU) 2019/2033 of the European Parliament and of the Council ( 10 );
has seriously and systematically infringed the provisions adopted pursuant to this Directive or Regulation (EU) No 600/2014 governing the operating conditions for investment firms;
falls within any of the cases where national law, in respect of matters outside the scope of this Directive, provides for withdrawal.
Every withdrawal of authorisation shall be notified to ESMA.
Article 9
Management body
ESMA and EBA shall adopt, jointly, guidelines on the elements listed in Article 91(12) of Directive 2013/36/EU.
EBA and ESMA shall coordinate the collection of information provided for under the first subparagraph of this paragraph and under Article 91(6) of Directive 2013/36/EU in relation to investment firms.
Without prejudice to the requirements established in Article 88(1) of Directive 2013/36/EU, those arrangements shall also ensure that the management body define, approve and oversee:
the organisation of the firm for the provision of investment services and activities and ancillary services, including the skills, knowledge and expertise required by personnel, the resources, the procedures and the arrangements for the provision of services and activities, taking into account the nature, scale and complexity of its business and all the requirements the firm has to comply with;
a policy as to services, activities, products and operations offered or provided, in accordance with the risk tolerance of the firm and the characteristics and needs of the clients of the firm to whom they will be offered or provided, including carrying out appropriate stress testing, where appropriate;
a remuneration policy of persons involved in the provision of services to clients aiming to encourage responsible business conduct, fair treatment of clients as well as avoiding conflict of interest in the relationships with clients.
The management body shall monitor and periodically assess the adequacy and the implementation of the firm’s strategic objectives in the provision of investment services and activities and ancillary services, the effectiveness of the investment firm’s governance arrangements and the adequacy of the policies relating to the provision of services to clients and take appropriate steps to address any deficiencies.
Members of the management body shall have adequate access to information and documents which are needed to oversee and monitor management decision-making.
By way of derogation from the first subparagraph, Member States may grant authorisation to investment firms that are natural persons or to investment firms that are legal persons managed by a single natural person in accordance with their constitutive rules and national laws. Member States shall nevertheless require that:
alternative arrangements be in place which ensure the sound and prudent management of such investment firms and the adequate consideration of the interest of clients and the integrity of the market;
the natural persons concerned are of sufficiently good repute, possess sufficient knowledge, skills and experience and commit sufficient time to perform their duties.
Article 10
Shareholders and members with qualifying holdings
The competent authorities shall refuse authorisation if, taking into account the need to ensure the sound and prudent management of an investment firm, they are not satisfied as to the suitability of the shareholders or members that have qualifying holdings.
Where close links exist between the investment firm and other natural or legal persons, the competent authority shall grant authorisation only if those links do not prevent the effective exercise of the supervisory functions of the competent authority.
Such measures may include applications for judicial orders or the imposition of sanctions against directors and those responsible for management, or suspension of the exercise of the voting rights attaching to the shares held by the shareholders or members in question.
Article 11
Notification of proposed acquisitions
Member States shall require any natural or legal person who has taken a decision to dispose, directly or indirectly, of a qualifying holding in an investment firm first to notify in writing the competent authorities, indicating the size of the intended holding. Such a person shall likewise notify the competent authorities if he has taken a decision to reduce his qualifying holding so that the proportion of the voting rights or of the capital held would fall below 20 %, 30 % or 50 % or so that the investment firm would cease to be his subsidiary.
Member States need not apply the 30 % threshold where, in accordance with point (a) of Article 9(3) of Directive 2004/109/EC, they apply a threshold of one-third.
In determining whether the criteria for a qualifying holding referred to in Article 10 and in this Article are fulfilled, Member States shall not take into account voting rights or shares which investment firms or credit institutions may hold as a result of providing the underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis included under point 6 of Section A of Annex I, provided that those rights are, on the one hand, not exercised or otherwise used to intervene in the management of the issuer and, on the other, disposed of within one year of acquisition.
The relevant competent authorities shall work in full consultation with each other when carrying out the assessment provided for in Article 13(1) (the ‘assessment’) if the proposed acquirer is one of the following:
a credit institution, assurance undertaking, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State or in a sector other than that in which the acquisition is proposed;
the parent undertaking of a credit institution, assurance undertaking, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State or in a sector other than that in which the acquisition is proposed; or
a natural or legal person controlling a credit institution, assurance undertaking, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State or in a sector other than that in which the acquisition is proposed.
The competent authorities shall, without undue delay, provide each other with any information which is essential or relevant for the assessment. In that regard, the competent authorities shall communicate to each other upon request all relevant information and shall communicate on their own initiative all essential information. A decision by the competent authority that has authorised the investment firm in which the acquisition is proposed shall indicate any views or reservations expressed by the competent authority responsible for the proposed acquirer.
At least once a year, investment firms shall also inform the competent authority of the names of shareholders and members possessing qualifying holdings and the sizes of such holdings as shown, for example, by the information received at annual general meetings of shareholders and members or as a result of compliance with the regulations applicable to companies whose transferable securities are admitted to trading on a regulated market.
Article 12
Assessment period
The competent authorities shall have a maximum of sixty working days as from the date of the written acknowledgement of receipt of the notification and all documents required by the Member State to be attached to the notification on the basis of the list referred to in Article 13(4) (the ‘assessment period’), to carry out the assessment.
The competent authorities shall inform the proposed acquirer of the date of the expiry of the assessment period at the time of acknowledging receipt.
For the period between the date of request for information by the competent authorities and the receipt of a response thereto by the proposed acquirer, the assessment period shall be interrupted. The interruption shall not exceed 20 working days. Any further requests by the competent authorities for completion or clarification of the information shall be at their discretion but may not result in an interruption of the assessment period.
The competent authorities may extend the interruption referred to in the second subparagraph of paragraph 2 up to 30 working days if the proposed acquirer is one of the following:
a natural or legal person situated or regulated outside the Union;
a natural or legal person not subject to supervision under this Directive or Directives 2009/65/EC, 2009/138/EC or 2013/36/EU.
ESMA shall submit those draft regulatory technical standards to the Commission by 1 January 2014.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
ESMA shall submit those draft implementing technical standards to the Commission by 1 January 2014.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 13
Assessment
In assessing the notification provided for in Article 11(1) and the information referred to in Article 12(2), the competent authorities shall, in order to ensure the sound and prudent management of the investment firm in which an acquisition is proposed, and having regard to the likely influence of the proposed acquirer on the investment firm, appraise the suitability of the proposed acquirer and the financial soundness of the proposed acquisition against all of the following criteria:
the reputation of the proposed acquirer;
the reputation and experience of any person who will direct the business of the investment firm as a result of the proposed acquisition;
the financial soundness of the proposed acquirer, in particular in relation to the type of business pursued and envisaged in the investment firm in which the acquisition is proposed;
whether the investment firm will be able to comply and continue to comply with the prudential requirements based on this Directive and, where applicable, other Directives, in particular Directives 2002/87/EC and 2013/36/EU, in particular, whether the group of which it will become a part has a structure that makes it possible to exercise effective supervision, effectively exchange information among the competent authorities and determine the allocation of responsibilities among the competent authorities;
whether there are reasonable grounds to suspect that, in connection with the proposed acquisition, money laundering or terrorist financing within the meaning of Article 1 of Directive 2005/60/EC is being or has been committed or attempted, or that the proposed acquisition could increase the risk thereof.
The Commission shall be empowered to adopt delegated acts in accordance with Article 89 which adjust the criteria set out in the first subparagraph of this paragraph.
Article 14
Membership of an authorised investor compensation scheme
The competent authority shall verify that any entity seeking authorisation as an investment firm meets its obligations under Directive 97/9/EC at the time of authorisation.
The obligation laid down in the first paragraph shall be met in relation to structured deposits where the structured deposit is issued by a credit institution which is a member of a deposit guarantee scheme recognised under Directive 2014/49/EU.
Article 15
Initial capital endowment
Member States shall ensure that the competent authorities do not grant authorisation unless the investment firm has sufficient initial capital in accordance with the requirements of Article 9 of Directive (EU) 2019/2034 of the European Parliament and of the Council ( 11 ), having regard to the nature of the investment service or activity in question.
Article 16
Organisational requirements
An investment firm which manufactures financial instruments for sale to clients shall maintain, operate and review a process for the approval of each financial instrument and significant adaptations of existing financial instruments before it is marketed or distributed to clients.
The product approval process shall specify an identified target market of end clients within the relevant category of clients for each financial instrument and shall ensure that all relevant risks to such identified target market are assessed and that the intended distribution strategy is consistent with the identified target market.
An investment firm shall also regularly review financial instruments it offers or markets, taking into account any event that could materially affect the potential risk to the identified target market, to assess at least whether the financial instrument remains consistent with the needs of the identified target market and whether the intended distribution strategy remains appropriate.
An investment firm which manufactures financial instruments shall make available to any distributor all appropriate information on the financial instrument and the product approval process, including the identified target market of the financial instrument.
Where an investment firm offers or recommends financial instruments which it does not manufacture, it shall have in place adequate arrangements to obtain the information referred to in the fifth subparagraph and to understand the characteristics and identified target market of each financial instrument.
The policies, processes and arrangements referred to in this paragraph shall be without prejudice to all other requirements under this Directive and Regulation (EU) No 600/2014, including those relating to disclosure, suitability or appropriateness, identification and management of conflicts of interests, and inducements.
An investment firm shall have sound administrative and accounting procedures, internal control mechanisms, effective procedures for risk assessment, and effective control and safeguard arrangements for information processing systems.
Without prejudice to the ability of competent authorities to require access to communications in accordance with this Directive and Regulation (EU) No 600/2014, an investment firm shall have sound security mechanisms in place to guarantee the security and authentication of the means of transfer of information, minimise the risk of data corruption and unauthorised access and to prevent information leakage maintaining the confidentiality of the data at all times.
Such telephone conversations and electronic communications shall also include those that are intended to result in transactions concluded when dealing on own account or in the provision of client order services that relate to the reception, transmission and execution of client orders, even if those conversations or communications do not result in the conclusion of such transactions or in the provision of client order services.
For those purposes, an investment firm shall take all reasonable steps to record relevant telephone conversations and electronic communications, made with, sent from or received by equipment provided by the investment firm to an employee or contractor or the use of which by an employee or contractor has been accepted or permitted by the investment firm.
An investment firm shall notify new and existing clients that telephone communications or conversations between the investment firm and its clients that result or may result in transactions will be recorded.
Such a notification may be made once, before the provision of investment services to new and existing clients.
An investment firm shall not provide, by telephone, investment services and activities to clients who have not been notified in advance about the recording of their telephone communications or conversations, where such investment services and activities relate to the reception, transmission and execution of client orders.
Orders may be placed by clients through other channels, however such communications must be made in a durable medium such as mails, faxes, emails or documentation of client orders made at meetings. In particular, the content of relevant face-to-face conversations with a client may be recorded by using written minutes or notes. Such orders shall be considered equivalent to orders received by telephone.
An investment firm shall take all reasonable steps to prevent an employee or contractor from making, sending or receiving relevant telephone conversations and electronic communications on privately-owned equipment which the investment firm is unable to record or copy.
The records kept in accordance with this paragraph shall be provided to the client involved upon request and shall be kept for a period of five years and, where requested by the competent authority, for a period of up to seven years.
Member States may, in exceptional circumstances, impose requirements on investment firms concerning the safeguarding of client assets additional to the provisions set out in paragraphs 8, 9 and 10 and the respective delegated acts as referred to in paragraph 12. Such requirements must be objectively justified and proportionate so as to address, where investment firms safeguard client assets and client funds, specific risks to investor protection or to market integrity which are of particular importance in the circumstances of the market structure of that Member State.
Member States shall notify, without undue delay, the Commission of any requirement which they intend to impose in accordance with this paragraph and at least two months before the date appointed for that requirement to come into force. The notification shall include a justification for that requirement. Any such additional requirements shall not restrict or otherwise affect the rights of investment firms under Articles 34 and 35.
The Commission shall within two months of the notification referred to in the third subparagraph provide its opinion on the proportionality of and justification for the additional requirements.
Member States may retain additional requirements provided that they were notified to the Commission in accordance with Article 4 of Directive 2006/73/EC before 2 July 2014 and that the conditions laid down in that Article are met.
The Commission shall communicate to Member States and make public on its website the additional requirements imposed in accordance with this paragraph.
Article 16a
Exemptions from product governance requirements
An investment firm shall be exempted from the requirements set out in the second to fifth subparagraphs of Article 16(3) and in Article 24(2), where the investment service it provides relates to bonds with no other embedded derivative than a make-whole clause or where the financial instruments are marketed or distributed exclusively to eligible counterparties.
Article 17
Algorithmic trading
The competent authority of the home Member State of the investment firm may require the investment firm to provide, on a regular or ad-hoc basis, a description of the nature of its algorithmic trading strategies, details of the trading parameters or limits to which the system is subject, the key compliance and risk controls that it has in place to ensure the conditions laid down in paragraph 1 are satisfied and details of the testing of its systems. The competent authority of the home Member State of the investment firm may, at any time, request further information from an investment firm about its algorithmic trading and the systems used for that trading.
The competent authority of the home Member State of the investment firm shall, on the request of a competent authority of a trading venue at which the investment firm as a member or participant of the trading venue is engaged in algorithmic trading and without undue delay, communicate the information referred to in the second subparagraph that it receives from the investment firm that engages in algorithmic trading.
The investment firm shall arrange for records to be kept in relation to the matters referred to in this paragraph and shall ensure that those records be sufficient to enable its competent authority to monitor compliance with the requirements of this Directive.
An investment firm that engages in a high-frequency algorithmic trading technique shall store in an approved form accurate and time sequenced records of all its placed orders, including cancellations of orders, executed orders and quotations on trading venues and shall make them available to the competent authority upon request.
An investment firm that engages in algorithmic trading to pursue a market making strategy shall, taking into account the liquidity, scale and nature of the specific market and the characteristics of the instrument traded:
carry out this market making continuously during a specified proportion of the trading venue’s trading hours, except under exceptional circumstances, with the result of providing liquidity on a regular and predictable basis to the trading venue;
enter into a binding written agreement with the trading venue which shall at least specify the obligations of the investment firm in accordance with point (a); and
have in place effective systems and controls to ensure that it fulfils its obligations under the agreement referred to in point (b) at all times.
An investment firm that provides direct electronic access shall be responsible for ensuring that clients using that service comply with the requirements of this Directive and the rules of the trading venue. The investment firm shall monitor the transactions in order to identify infringements of those rules, disorderly trading conditions or conduct that may involve market abuse and that is to be reported to the competent authority. The investment firm shall ensure that there is a binding written agreement between the investment firm and the client regarding the essential rights and obligations arising from the provision of the service and that under the agreement the investment firm retains responsibility under this Directive.
An investment firm that provides direct electronic access to a trading venue shall notify the competent authorities of its home Member State and of the trading venue at which the investment firm provides direct electronic access accordingly.
The competent authority of the home Member State of the investment firm may require the investment firm to provide, on a regular or ad-hoc basis, a description of the systems and controls referred to in first subparagraph and evidence that those have been applied.
The competent authority of the home Member State of the investment firm shall, on the request of a competent authority of a trading venue in relation to which the investment firm provides direct electronic access, communicate without undue delay the information referred to in the fourth subparagraph that it receives from the investment firm.
The investment firm shall arrange for records to be kept in relation to the matters referred to in this paragraph and shall ensure that those records be sufficient to enable its competent authority to monitor compliance with the requirements of this Directive.
ESMA shall develop draft regulatory technical standards to specify the following:
the details of organisational requirements laid down in paragraphs 1 to 6 to be imposed on investment firms providing different investment services and/or activities and ancillary services or combinations thereof, whereby the specifications in relation to the organisational requirements laid down in paragraph 5 shall set out specific requirements for direct market access and for sponsored access in such a way as to ensure that the controls applied to sponsored access are at least equivalent to those applied to direct market access;
the circumstances in which an investment firm would be obliged to enter into the market making agreement referred to in point (b) of paragraph 3 and the content of such agreements, including the proportion of the trading venue’s trading hours laid down in paragraph 3;
the situations constituting exceptional circumstances referred to in paragraph 3, including circumstances of extreme volatility, political and macroeconomic issues, system and operational matters, and circumstances which contradict the investment firm’s ability to maintain prudent risk management practices as laid down in paragraph 1;
the content and format of the approved form referred to in the fifth subparagraph of paragraph 2 and the length of time for which such records must be kept by the investment firm.
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
Article 18
Trading process and finalisation of transactions in an MTF and an OTF
Member States shall require that, where applicable, investment firms and market operators operating an MTF or an OTF provide, or are satisfied that there is access to, sufficient publicly available information to enable its users to form an investment judgement, taking into account both the nature of the users and the types of instruments traded.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 19
Specific requirements for MTFs
Member States shall require that investment firms and market operators operating an MTF to have arrangements:
to be adequately equipped to manage the risks to which it is exposed, to implement appropriate arrangements and systems to identify all significant risks to its operation, and to put in place effective measures to mitigate those risks;
to have effective arrangements to facilitate the efficient and timely finalisation of the transactions executed under its systems; and
to have available, at the time of authorisation and on an ongoing basis, sufficient financial resources to facilitate its orderly functioning, having regard to the nature and extent of the transactions concluded on the market and the range and degree of the risks to which it is exposed.
Article 20
Specific requirements for OTFs
An investment firm or market operator operating an OTF shall not use matched principal trading to execute client orders in an OTF in derivatives pertaining to a class of derivatives that has been declared subject to the clearing obligation in accordance with Article 5 of Regulation (EU) No 648/2012.
An investment firm or market operator operating an OTF shall establish arrangements ensuring compliance with the definition of matched principal trading in point (38) of Article 4(1).
For the purposes of this Article, an investment firm shall not be deemed to be carrying out market making on an OTF on an independent basis if it has close links with the investment firm or market operator operating the OTF.
An investment firm or market operator operating an OTF shall exercise discretion only in either or both of the following circumstances:
when deciding to place or retract an order on the OTF they operate;
when deciding not to match a specific client order with other orders available in the systems at a given time, provided it is in compliance with specific instructions received from a client and with its obligations in accordance with Article 27.
For the system that crosses client orders the investment firm or market operator operating the OTF may decide if, when and how much of two or more orders it wants to match within the system. In accordance with paragraphs 1, 2, 4 and 5 and without prejudice to paragraph 3, with regard to a system that arranges transactions in non-equities, the investment firm or market operator operating the OTF may facilitate negotiation between clients so as to bring together two or more potentially compatible trading interest in a transaction.
That obligation shall be without prejudice to Articles 18 and 27.
CHAPTER II
Operating conditions for investment firms
Article 21
Regular review of conditions for initial authorisation
ESMA may develop guidelines regarding the monitoring methods referred to in this paragraph.
Article 22
General obligation in respect of on-going supervision
Member States shall ensure that the competent authorities monitor the activities of investment firms so as to assess compliance with the operating conditions provided for in this Directive. Member States shall ensure that the appropriate measures are in place to enable the competent authorities to obtain the information needed to assess the compliance of investment firms with those obligations.
Member States shall ensure that competent authorities, where they are in charge of authorising and supervising the activities of an approved publication arrangement (APA), as defined in point (34) of Article 2(1) of Regulation (EU) No 600/2014 with a derogation in accordance with Article 2(3) of that Regulation, or an approved reporting mechanism (ARM), as defined in point (36) of Article 2(1) of that Regulation with a derogation in accordance with Article 2(3) of that Regulation, monitor the activities of that APA or ARM so as to assess compliance with the operating conditions provided for in that Regulation. Member States shall ensure that the appropriate measures are in place to enable the competent authorities to obtain the information needed to assess the compliance of APAs and ARMs with those obligations.
Article 23
Conflicts of interest
The disclosure referred to in paragraph 2 shall:
be made in a durable medium; and
include sufficient detail, taking into account the nature of the client, to enable that client to take an informed decision with respect to the service in the context of which the conflict of interest arises.
The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to:
define the steps that investment firms might reasonably be expected to take to identify, prevent, manage and disclose conflicts of interest when providing various investment and ancillary services and combinations thereof;
establish appropriate criteria for determining the types of conflict of interest whose existence may damage the interests of the clients or potential clients of the investment firm.
Article 24
General principles and information to clients
An investment firm shall understand the financial instruments they offer or recommend, assess the compatibility of the financial instruments with the needs of the clients to whom it provides investment services, also taking account of the identified target market of end clients as referred to in Article 16(3), and ensure that financial instruments are offered or recommended only when this is in the interest of the client.
Appropriate information shall be provided in good time to clients or potential clients with regard to the investment firm and its services, the financial instruments and proposed investment strategies, execution venues and all costs and related charges. That information shall include the following:
when investment advice is provided, the investment firm must, in good time before it provides investment advice, inform the client:
whether or not the advice is provided on an independent basis;
whether the advice is based on a broad or on a more restricted analysis of different types of financial instruments and, in particular, whether the range is limited to financial instruments issued or provided by entities having close links with the investment firm or any other legal or economic relationships, such as contractual relationships, so close as to pose a risk of impairing the independent basis of the advice provided;
whether the investment firm will provide the client with a periodic assessment of the suitability of the financial instruments recommended to that client;
the information on financial instruments and proposed investment strategies must include appropriate guidance on and warnings of the risks associated with investments in those instruments or in respect of particular investment strategies and whether the financial instrument is intended for retail or professional clients, taking account of the identified target market in accordance with paragraph 2;
the information on all costs and associated charges must include information relating to both investment and ancillary services, including the cost of advice, where relevant, the cost of the financial instrument recommended or marketed to the client and how the client may pay for it, also encompassing any third-party payments.
The information about all costs and charges, including costs and charges in connection with the investment service and the financial instrument, which are not caused by the occurrence of underlying market risk, shall be aggregated to allow the client to understand the overall cost as well as the cumulative effect on return of the investment, and where the client so requests, an itemised breakdown shall be provided. Where applicable, such information shall be provided to the client on a regular basis, at least annually, during the life of the investment.
Where the agreement to buy or sell a financial instrument is concluded using a means of distance communication which prevents the prior delivery of the information on costs and charges, the investment firm may provide the information on costs and charges either in electronic format or on paper, where requested by a retail client, without undue delay after the conclusion of the transaction, provided that both of the following conditions are met:
the client has consented to receiving the information without undue delay after the conclusion of the transaction;
the investment firm has given the client the option of delaying the conclusion of the transaction until the client has received the information.
In addition to the requirements of the third subparagraph, the investment firm shall be required to give the client the option of receiving the information on costs and charges over the phone prior to the conclusion of the transaction.
Investment firms shall inform retail clients or potential retail clients that they have the option of receiving the information on paper.
Investment firms shall inform existing retail clients that receive the information required to be provided by this Directive on paper of the fact that they will receive that information in electronic format at least eight weeks before sending that information in electronic format. Investment firms shall inform those existing retail clients that they have the choice either to continue receiving information on paper or to switch to information in electronic format. Investment firms shall also inform existing retail clients that an automatic switch to the electronic format will occur if they do not request the continuation of the provision of the information on paper within that eight week period. Existing retail clients who already receive the information required to be provided by this Directive in electronic format do not need to be informed.
Where an investment firm informs the client that investment advice is provided on an independent basis, that investment firm shall:
assess a sufficient range of financial instruments available on the market which must be sufficiently diverse with regard to their type and issuers or product providers to ensure that the client’s investment objectives can be suitably met and must not be limited to financial instruments issued or provided by:
the investment firm itself or by entities having close links with the investment firm; or
other entities with which the investment firm has such close legal or economic relationships, such as contractual relationships, as to pose a risk of impairing the independent basis of the advice provided;
not accept and retain 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 the service to clients. Minor non-monetary benefits that are capable of enhancing the quality of service provided to a client and are of a scale and nature such that they could not be judged to impair compliance with the investment firm’s duty to act in the best interest of the client must be clearly disclosed and are excluded from this point.
Member States shall ensure that investment firms are regarded as not fulfilling their obligations under Article 23 or under paragraph 1 of this Article where they pay or are paid any fee or commission, or provide or are provided with any non-monetary benefit in connection with the provision of an investment service or an ancillary service, to or by any party except the client or a person on behalf of the client, other than where the payment or benefit:
is designed to enhance the quality of the relevant service to the client; and
does not impair compliance with the investment firm’s duty to act honestly, fairly and professionally in accordance with the best interest of its clients.
The existence, nature and amount of the payment or benefit referred to in the first subparagraph, or, where the amount cannot be ascertained, the method of calculating that amount, must be clearly disclosed to the client, in a manner that is comprehensive, accurate and understandable, prior to the provision of the relevant investment or ancillary service. Where applicable, the investment firm shall also inform the client on mechanisms for transferring to the client the fee, commission, monetary or non-monetary benefit received in relation to the provision of the investment or ancillary service.
The payment or benefit which enables or is necessary for the provision of investment services, such as custody costs, settlement and exchange fees, regulatory levies or legal fees, and which by its nature cannot give rise to conflicts with the investment firm’s duties to act honestly, fairly and professionally in accordance with the best interests of its clients, is not subject to the requirements set out in the first subparagraph.
Member States shall ensure that the provision of research by third parties to investment firms providing portfolio management or other investment or ancillary services to clients is to be regarded as fulfilling the obligations under paragraph 1 if:
before the execution or research services have been provided, an agreement has been entered into between the investment firm and the research provider, identifying the part of any combined charges or joint payments for execution services and research that is attributable to research;
the investment firm informs its clients about the joint payments for execution services and research made to the third party providers of research; and
the research for which the combined charges or the joint payment is made concerns issuers whose market capitalisation for the period of 36 months preceding the provision of the research did not exceed EUR 1 billion, as expressed by end-year quotes for the years when they are or were listed or by the own-capital for the financial years when they are or were not listed.
For the purpose of this Article, research shall be understood as covering research material or services concerning one or several financial instruments or other assets, or the issuers or potential issuers of financial instruments, or as covering research material or services closely related to a specific industry or market such that it informs views on financial instruments, assets or issuers within that industry or market.
Research shall also comprise material or services that explicitly or implicitly recommend or suggest an investment strategy and provide a substantiated opinion as to the present or future value or price of financial instruments or assets, or otherwise contain analysis and original insights and reach conclusions based on new or existing information that could be used to inform an investment strategy and be relevant and capable of adding value to the investment firm’s decisions on behalf of clients being charged for that research.
Where the risks resulting from such an agreement or package offered to a retail client are likely to be different from the risks associated with the components taken separately, the investment firm shall provide an adequate description of the different components of the agreement or package and the way in which its interaction modifies the risks.
ESMA, in cooperation with EBA and EIOPA, shall develop by 3 January 2016, and update periodically, guidelines for the assessment and the supervision of cross-selling practices indicating, in particular, situations in which cross-selling practices are not compliant with obligations laid down in paragraph 1.
Member States shall notify the Commission of any requirement which they intend to impose in accordance with this paragraph without undue delay and at least two months before the date appointed for that requirement to come into force. The notification shall include a justification for that requirement. Any such additional requirements shall not restrict or otherwise affect the rights of investment firms under Articles 34 and 35 of this Directive.
The Commission shall within two months from the notification referred to in the second subparagraph provide its opinion on the proportionality of and justification for the additional requirements.
The Commission shall communicate to Member States and make public on its website the additional requirements imposed in accordance with this paragraph.
Member States may retain additional requirements that were notified to the Commission in accordance with Article 4 of Directive 2006/73/EC before 2 July 2014 provided that the conditions laid down in that Article are met.
The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to ensure that investment firms comply with the principles set out in this Article when providing investment or ancillary services to their clients, including:
the conditions with which the information must comply in order to be fair, clear and not misleading;
the details about content and format of information to clients in relation to client categorisation, investment firms and their services, financial instruments, costs and charges;
the criteria for the assessment of a range of financial instruments available on the market;
the criteria to assess compliance of firms receiving inducements with the obligation to act honestly, fairly and professionally in accordance with the best interest of the client.
In formulating the requirements for information on financial instruments in relation to point b of paragraph 4 information on the structure of the product shall be included, where applicable, taking into account any relevant standardized information required under Union law.
The delegated acts referred to in paragraph 13 shall take into account:
the nature of the service(s) offered or provided to the client or potential client, taking into account the type, object, size and frequency of the transactions;
the nature and range of products being offered or considered including different types of financial instruments;
the retail or professional nature of the client or potential clients or, in the case of paragraphs 4 and 5, their classification as eligible counterparties.
Article 25
Assessment of suitability and appropriateness and reporting to clients
Member States shall ensure that where an investment firm provides investment advice recommending a package of services or products bundled pursuant to Article 24(11), the overall bundled package is suitable.
When providing either investment advice or portfolio management that involves the switching of financial instruments, investment firms shall obtain the necessary information on the client’s investment and shall analyse the costs and benefits of the switching of financial instruments. When providing investment advice, investment firms shall inform the client whether or not the benefits of the switching of financial instruments are greater than the costs involved in such switching.
Where the investment firm considers, on the basis of the information received under the first subparagraph, that the product or service is not appropriate to the client or potential client, the investment firm shall warn the client or potential client. That warning may be provided in a standardised format.
Where clients or potential clients do not provide the information referred to under the first subparagraph, or where they provide insufficient information regarding their knowledge and experience, the investment firm shall warn them that the investment firm is not in a position to determine whether the service or product envisaged is appropriate for them. That warning may be provided in a standardised format.
Member States shall allow investment firms when providing investment services that only consist of execution or reception and transmission of client orders with or without ancillary services, excluding the granting of credits or loans as specified in Section B.1 of Annex I that do not comprise of existing credit limits of loans, current accounts and overdraft facilities of clients, to provide those investment services to their clients without the need to obtain the information or make the determination provided for in paragraph 3 where all the following conditions are met:
the services relate to any of the following financial instruments:
shares admitted to trading on a regulated market or on an equivalent third-country market or on a MTF, where those are shares in companies, and excluding shares in non-UCITS collective investment undertakings and shares that embed a derivative;
bonds or other forms of securitised debt admitted to trading on a regulated market or on an equivalent third country market or on a MTF, excluding those that embed a derivative or incorporate a structure which makes it difficult for the client to understand the risk involved;
money-market instruments, excluding those that embed a derivative or incorporate a structure which makes it difficult for the client to understand the risk involved;
shares or units in UCITS, excluding structured UCITS as referred to in the second subparagraph of Article 36(1) of Regulation (EU) No 583/2010;
structured deposits, excluding those that incorporate a structure which makes it difficult for the client to understand the risk of return or the cost of exiting the product before term;
other non-complex financial instruments for the purpose of this paragraph.
For the purpose of this point, a third-country market shall be considered to be equivalent to a regulated market if the requirements and the procedure laid down under the third and the fourth subparagraphs are fulfilled.
At the request of the competent authority of a Member State, the Commission shall adopt equivalence decisions in accordance with the examination procedure referred to in Article 89a(2), stating whether the legal and supervisory framework of a third country ensures that a regulated market authorised in that third country complies with legally binding requirements which are, for the purpose of the application of this point, equivalent to the requirements resulting from Regulation (EU) No 596/2014, from Title III of this Directive, from Title II of Regulation (EU) No 600/2014 and from Directive 2004/109/EC, and which are subject to effective supervision and enforcement in that third country. The competent authority shall indicate why it considers that the legal and supervisory framework of the third country concerned is to be considered equivalent and shall provide relevant information to that end.
Such third-country legal and supervisory framework may be considered equivalent where that framework fulfils at least the following conditions:
the markets are subject to authorisation and to effective supervision and enforcement on an ongoing basis;
the markets have clear and transparent rules regarding the admission of securities to trading so that such securities are capable of being traded in a fair, orderly and efficient manner, and are freely negotiable;
security issuers are subject to periodic and ongoing information requirements ensuring a high level of investor protection; and
market transparency and integrity are ensured by the prevention of market abuse in the form of insider dealing and market manipulation.
the service is provided at the initiative of the client or potential client;
the client or potential client has been clearly informed that in the provision of that service the investment firm is not required to assess the appropriateness of the financial instrument or service provided or offered and that therefore he does not benefit from the corresponding protection of the relevant conduct of business rules. Such a warning may be provided in a standardised format;
the investment firm complies with its obligations under Article 23.
When providing investment advice, the investment firm shall, before the transaction is made, provide the client with a statement on suitability in a durable medium specifying the advice given and how that advice meets the preferences, objectives and other characteristics of the retail client.
Where the agreement to buy or sell a financial instrument is concluded using a means of distance communication which prevents the prior delivery of the suitability statement, the investment firm may provide the written statement on suitability in a durable medium immediately after the client is bound by any agreement, provided both the following conditions are met:
the client has consented to receiving the suitability statement without undue delay after the conclusion of the transaction; and
the investment firm has given the client the option of delaying the transaction in order to receive the statement on suitability in advance.
Where an investment firm provides portfolio management or has informed the client that it will carry out a periodic assessment of suitability, the periodic report shall contain an updated statement of how the investment meets the client’s preferences, objectives and other characteristics of the retail client.
The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to ensure that investment firms comply with the principles set out in paragraphs 2 to 6 of this Article when providing investment or ancillary services to their clients, including information to obtain when assessing the suitability or appropriateness of the services and financial instruments for their clients, criteria to assess non-complex financial instruments for the purposes of point (a)(vi) of paragraph 4 of this Article, the content and the format of records and agreements for the provision of services to clients and of periodic reports to clients on the services provided. Those delegated acts shall take into account:
the nature of the service(s) offered or provided to the client or potential client, having regard to the type, object, size and frequency of the transactions;
the nature of the products being offered or considered, including different types of financial instruments;
the retail or professional nature of the client or potential clients or, in the case of paragraph 6, their classification as eligible counterparties.
ESMA shall develop by 3 January 2016, and update periodically, guidelines for the assessment of:
financial instruments incorporating a structure which makes it difficult for the client to understand the risk involved in accordance with points (a)(ii) and (a)(iii) of paragraph 4;
structured deposits incorporating a structure which makes it difficult for the client to understand the risk of return or the cost of exiting the product before term, in accordance with point (a)(v) of paragraph 4.
Article 26
Provision of services through the medium of another investment firm
Member States shall allow an investment firm receiving an instruction to provide investment or ancillary services on behalf of a client through the medium of another investment firm to rely on client information transmitted by the latter investment firm. The investment firm which mediates the instructions will remain responsible for the completeness and accuracy of the information transmitted.
The investment firm which receives an instruction to undertake services on behalf of a client in that way shall also be able to rely on any recommendations in respect of the service or transaction that have been provided to the client by another investment firm. The investment firm which mediates the instructions will remain responsible for the suitability for the client of the recommendations or advice provided.
The investment firm which receives client instructions or orders through the medium of another investment firm shall remain responsible for concluding the service or transaction, based on any such information or recommendations, in accordance with the relevant provisions of this Title.
Article 27
Obligation to execute orders on terms most favourable to the client
Where an investment firm executes an order on behalf of a retail client, the best possible result shall be determined in terms of the total consideration, representing the price of the financial instrument and the costs relating to execution, which shall include all expenses incurred by the client which are directly relating to the execution of the order, including execution venue fees, clearing and settlement fees and any other fees paid to third parties involved in the execution of the order.
For the purposes of delivering best possible result in accordance with the first subparagraph where there is more than one competing venue to execute an order for a financial instrument, in order to assess and compare the results for the client that would be achieved by executing the order on each of the execution venues listed in the investment firm’s order execution policy that is capable of executing that order, the investment firm’s own commissions and the costs for executing the order on each of the eligible execution venues shall be taken into account in that assessment.
▼M11 —————
Member States shall require that investment firms provide appropriate information to their clients on their order execution policy. That information shall explain clearly, in sufficient detail and in a way that can be easily understood by clients, how orders will be executed by the investment firm for the client. Member States shall require that investment firms obtain the prior consent of their clients to the order execution policy.
Member States shall require that, where the order execution policy provides for the possibility that client orders may be executed outside a trading venue, the investment firm shall, in particular, inform its clients about that possibility. Member States shall require that investment firms obtain the prior express consent of their clients before proceeding to execute their orders outside a trading venue. Investment firms may obtain such consent either in the form of a general agreement or in respect of individual transactions.
▼M11 —————
The Commission shall be empowered to adopt delegated acts in accordance with Article 89 concerning:
the criteria for determining the relative importance of the different factors that, pursuant to paragraph 1, may be taken into account for determining the best possible result taking into account the size and type of order and the retail or professional nature of the client;
factors that may be taken into account by an investment firm when reviewing its execution arrangements and the circumstances under which changes to such arrangements may be appropriate. In particular, the factors for determining which venues enable investment firms to obtain on a consistent basis the best possible result for executing the client orders;
the nature and extent of the information to be provided to clients on their execution policies, pursuant to paragraph 5.
Those criteria shall include at least the following:
factors determining the choice of execution venues included in the order execution policy;
the frequency of assessing and updating the order execution policy;
the manner in which to identify classes of financial instruments as referred to in paragraph 5.
ESMA shall submit those draft regulatory technical standards to the Commission by 29 December 2024.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
Article 28
Client order handling rules
Those procedures or arrangements shall allow for the execution of otherwise comparable client orders in accordance with the time of their reception by the investment firm.
The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to define:
the conditions and nature of the procedures and arrangements which result in the prompt, fair and expeditious execution of client orders and the situations in which or types of transaction for which investment firms may reasonably deviate from prompt execution so as to obtain more favourable terms for clients;
the different methods through which an investment firm can be deemed to have met its obligation to disclose not immediately executable client limit orders to the market.
Article 29
Obligations of investment firms when appointing tied agents
Member States may allow, in accordance with Article 16(6), (8) and (9), tied agents registered in their territory to hold money and/or financial instruments of clients on behalf and under the full responsibility of the investment firm for which they are acting within their territory or, in the case of a cross border operation, in the territory of a Member State which allows a tied agent to hold client money.
Member States shall require the investment firms to monitor the activities of their tied agents so as to ensure that they continue to comply with this Directive when acting through tied agents.
Member States shall ensure that tied agents are only admitted to the public register if it has been established that they are of sufficiently good repute and that they possess the appropriate general, commercial and professional knowledge and competence so as to be able to deliver the investment service or ancillary service and to communicate accurately all relevant information regarding the proposed service to the client or potential client.
Member States may decide that, subject to appropriate control, investment firms can verify whether the tied agents which they have appointed are of sufficiently good repute and possess the knowledge and competence referred to in the second subparagraph.
The register shall be updated on a regular basis. It shall be publicly available for consultation.
Member States may allow competent authorities to collaborate with investment firms and credit institutions, their associations and other entities in registering tied agents and in monitoring compliance of tied agents with the requirements of paragraph 3. In particular, tied agents may be registered by an investment firm, credit institution or their associations and other entities under the supervision of the competent authority.
Article 29a
Services provided to professional clients
Article 30
Transactions executed with eligible counterparties
Member States shall ensure that, in their relationship with eligible counterparties, investment firms act honestly, fairly and professionally and communicate in a way which is fair, clear and not misleading, taking into account the nature of the eligible counterparty and of its business.
Classification as an eligible counterparty under the first subparagraph shall be without prejudice to the right of such entities to request, either on a general form or on a trade-by-trade basis, treatment as clients whose business with the investment firm is subject to Articles 24, 25, 27 and 28.
Member States shall ensure that the investment firm, when it enters into transactions in accordance with paragraph 1 with such undertakings, obtains the express confirmation from the prospective counterparty that it agrees to be treated as an eligible counterparty. Member States shall allow the investment firm to obtain that confirmation either in the form of a general agreement or in respect of each individual transaction.
Member States may also recognise as eligible counterparties third country undertakings such as those referred to in paragraph 3 on the same conditions and subject to the same requirements as those laid down in paragraph 3.
The Commission shall be empowered to adopt delegated acts in accordance with Article 89 to specify:
the procedures for requesting treatment as clients under paragraph 2;
the procedures for obtaining the express confirmation from prospective counterparties under paragraph 3;
the pre-determined proportionate requirements, including quantitative thresholds that would allow an undertaking to be considered to be an eligible counterparty under paragraph 3.
Article 31
Monitoring of compliance with the rules of the MTF or the OTF and with other legal obligations
Member States shall require that investment firms and market operators operating an MTF or an OTF have arrangements in place to ensure that they meet data quality standards pursuant to Article 22b of Regulation (EU) No 600/2014.
The competent authorities of the investment firms and market operators operating an MTF or an OTF shall communicate to ESMA and to the competent authorities of the other Member States the information referred to in the first subparagraph.
In relation to conduct that may indicate behaviour that is prohibited under Regulation (EU) No 596/2014, a competent authority must be convinced that such behaviour is being or has been carried out before it notifies the competent authorities of the other Member States and ESMA.
Article 32
Suspension and removal of financial instruments from trading on an MTF or an OTF
The competent authority, in whose jurisdiction the suspension or removal originated, shall require that regulated markets, other MTFs, other OTFs and systematic internalisers, which fall under its jurisdiction and trade the same financial instrument or derivatives referred to in points (4) to (10) of Section C of Annex I to this Directive that relate or are referenced to that financial instrument, also suspend or remove that financial instrument or derivatives from trading, where the suspension or removal is due to suspected market abuse, a take-over bid or the non-disclosure of inside information about the issuer or financial instrument infringing Articles 7 and 17 of Regulation (EU) No 596/2014 except where such suspension or removal could cause significant damage to the investors’ interests or the orderly functioning of the market.
The competent authority shall immediately make public and communicate to ESMA and the competent authorities of the other Member States such a decision.
The notified competent authorities of the other Member States shall require that regulated markets, other MTFs, other OTFs and systematic internalisers, which fall under their jurisdiction and trade the same financial instrument or derivatives referred to in points (4) to (10) of Section C of Annex I that relate or are referenced to that financial instrument, also suspend or remove that financial instrument or derivatives from trading, where the suspension or removal is due to suspected market abuse, a take-over bid or the non-disclosure of inside information about the issuer or financial instrument infringing Articles 7 and 17 of Regulation (EU) No 596/2014 except where such suspension or removal could cause significant damage to the investors’ interests or the orderly functioning of the market.
Each notified competent authority shall communicate its decision to ESMA and other competent authorities, including an explanation if the decision was not to suspend or remove from trading the financial instrument or derivatives referred to in points (4) to (10) of Section C of Annex I that relate or are referenced to that financial instrument.
This paragraph also applies when the suspension from trading of a financial instrument or derivatives referred to in points (4) to (10) of Section C of Annex I that relate or are referenced to that financial instrument is lifted.
The notification procedure referred to in this paragraph shall also apply in the case where the decision to suspend or remove from trading a financial instrument or derivatives referred to in points (4) to (10) of Section C of Annex I that relate or are referenced to that financial instrument is taken by the competent authority pursuant to points (m) and (n) of Article 69(2).
In order to ensure that the obligation to suspend or remove from trading such derivatives is applied proportionately, ESMA shall develop draft regulatory technical standards to further specify the cases in which the connection between a derivative as referred to in points (4) to (10) of Section C of Annex I relating or referenced to a financial instrument suspended or removed from trading and the original financial instrument implies that the derivative is also to be suspended or removed from trading, in order to achieve the objective of the suspension or removal of the underlying financial instrument.
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 33
SME growth markets
Member States shall ensure that MTFs are subject to effective rules, systems and procedures which ensure that the following is complied with:
at least 50 % of the issuers whose financial instruments are admitted to trading on the MTF are SMEs at the time when the MTF is registered as an SME growth market and in any calendar year thereafter;
appropriate criteria are set for initial and ongoing admission to trading of financial instruments of issuers on the market;
on initial admission to trading of financial instruments on the market there is sufficient information published to enable investors to make an informed judgment about whether or not to invest in the financial instruments, either an appropriate admission document or a prospectus if the requirements laid down in Directive 2003/71/EC are applicable in respect of a public offer being made in conjunction with the initial admission to trading of the financial instrument on the MTF;
there is appropriate ongoing periodic financial reporting by or on behalf of an issuer on the market, for example audited annual reports;
issuers on the market as defined in point (21) of Article 3(1) of Regulation (EU) No 596/2014, persons discharging managerial responsibilities as defined in point (25) of Article 3(1) of Regulation (EU) No 596/2014 and persons closely associated with them as defined in point (26) of Article 3(1) of Regulation (EU) No 596/2014 comply with relevant requirements applicable to them under Regulation (EU) No 596/2014;
regulatory information concerning the issuers on the market is stored and disseminated to the public;
there are effective systems and controls aiming to prevent and detect market abuse on that market as required under the Regulation (EU) No 596/2014.
Member States shall provide that the home competent authority may deregister a MTF as an SME growth market in any of the following cases:
the investment firm or market operator operating the market applies for its deregistration;
the requirements in paragraph 3 are no longer complied with in relation to the MTF.
CHAPTER III
Rights of investment firms
Article 34
Freedom to provide investment services and activities
Member States shall not impose any additional requirements on such an investment firm or credit institution in respect of the matters covered by this Directive.
Any investment firm wishing to provide services or activities within the territory of another Member State for the first time, or which wishes to change the range of services or activities so provided, shall communicate the following information to the competent authorities of its home Member State:
the Member State in which it intends to operate;
a programme of operations stating in particular the investment services and/or activities as well as ancillary services which it intends to provide in the territory of that Member State and whether it intends to do so through the use of tied agents, established in its home Member State. Where an investment firm intends to use tied agents, the investment firm shall communicate to the competent authority of its home Member State the identity of those tied agents.
Where an investment firm intends to use tied agents established in its home Member State, in the territory of the Member States in which it intends to provide services the competent authority of the home Member State of the investment firm shall, within one month from receipt of all the information, communicate to the competent authority of the host Member State designated as contact point in accordance with Article 79(1) the identity of the tied agents that the investment firm intends to use to provide investment services and activities in that Member State. The host Member State shall publish such information. ESMA may request access to that information in accordance with the procedure and under the conditions set out in Article 35 of Regulation (EU) No 1095/2010.
Where the credit institution intends to use tied agents established in its home Member State in the territory of the Member States in which it intends to provide services, the competent authority of the home Member State of the credit institution shall, within one month from the receipt of all the information, communicate to the competent authority of the host Member State designated as contact point in accordance with Article 79(1) the identity of the tied agents that the credit institution intends to use to provide services in that Member State. The host Member State shall publish such information.
The competent authority of the home Member State of the MTF shall, on the request of the competent authority of the host Member State of the MTF and without undue delay, communicate the identity of the remote members or participants of the MTF established in that Member State.
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
ESMA shall submit those draft implementing technical standards to the Commission by 31 December 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 35
Establishment of a branch
Member States shall not impose any additional requirements save those allowed under paragraph 8, on the organisation and operation of the branch in respect of the matters covered by this Directive.
Member States shall require any investment firm wishing to establish a branch within the territory of another Member State or to use tied agents established in another Member State in which it has not established a branch, first to notify the competent authority of its home Member State and to provide it with the following information:
the Member States within the territory of which it plans to establish a branch or the Member States in which it has not established a branch but plans to use tied agents established there;
a programme of operations setting out, inter alia, the investment services and/or activities as well as the ancillary services to be offered;
where established, the organisational structure of the branch and indicating whether the branch intends to use tied agents and the identity of those tied agents;
where tied agents are to be used in a Member State in which an investment firm has not established a branch, a description of the intended use of the tied agent(s) and an organisational structure, including reporting lines, indicating how the agent(s) fit into the corporate structure of the investment firm;
the address in the host Member State from which documents may be obtained;
the names of those responsible for the management of the branch or of the tied agent.
Where an investment firm uses a tied agent established in a Member State outside its home Member State, such tied agent shall be assimilated to the branch, where one is established, and shall in any event be subject to the provisions of this Directive relating to branches.
Unless the competent authority of the home Member State has reason to doubt the adequacy of the administrative structure or the financial situation of a credit institution, it shall, within three months of receiving all the information, communicate that information to the competent authority of the host Member State designated as contact point in accordance with Article 79(1) and inform the credit institution concerned accordingly.
Where the competent authority of the home Member State refuses to communicate the information to the competent authority of the host Member State, it shall give reasons for its refusal to the credit institution concerned within three months of receiving all the information.
On receipt of a communication from the competent authority of the host Member State, or failing such communication from the latter at the latest after two months from the date of transmission of the communication by the competent authority of the home Member State, the tied agent can commence business. Such tied agent shall be subject to the provisions of this Directive relating to branches.
The competent authority of the Member State in which the branch is located shall have the right to examine branch arrangements and to request such changes as are strictly needed to enable the competent authority to enforce the obligations under Articles 24, 25, 27, 28 of this Directive and Articles 14 to 26 of Regulation (EU) No 600/2014 and measures adopted pursuant thereto with respect to the services and/or activities provided by the branch within its territory.
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 36
Access to regulated markets
Member States shall require that investment firms from other Member States which are authorised to execute client orders or to deal on own account have the right of membership or have access to regulated markets established in their territory by means of any of the following arrangements:
directly, by setting up branches in the host Member States;
by becoming remote members of or having remote access to the regulated market without having to be established in the home Member State of the regulated market, where the trading procedures and systems of the market in question do not require a physical presence for conclusion of transactions on the market.
Article 37
Access to CCP, clearing and settlement facilities and right to designate settlement system
Member States shall require that direct and indirect access of those investment firms to such facilities be subject to the same non-discriminatory, transparent and objective criteria as apply to local members or participants. Member States shall not restrict the use of those facilities to the clearing and settlement of transactions in financial instruments undertaken on a trading venue in their territory.
Member States shall require that regulated markets in their territory offer all their members or participants the right to designate the system for the settlement of transactions in financial instruments undertaken on that regulated market, subject to the following conditions:
such links and arrangements between the designated settlement system and any other system or facility as are necessary to ensure the efficient and economic settlement of the transaction in question;
agreement by the competent authority responsible for the supervision of the regulated market that technical conditions for settlement of transactions concluded on the regulated market through a settlement system other than that designated by the regulated market are such as to allow the smooth and orderly functioning of financial markets.
That assessment of the competent authority of the regulated market shall be without prejudice to the competencies of the national central banks as overseers of settlement systems or other supervisory authorities with competence in relation to such systems. The competent authority shall take into account the oversight/supervision already exercised by those institutions in order to avoid undue duplication of control.
Article 38
Provisions regarding CCPs, clearing and settlement arrangements in respect of MTFs
In order to avoid undue duplication of control, the competent authority shall take into account the oversight and supervision of the clearing and settlement system already exercised by the central banks as overseers of clearing and settlement systems or by other supervisory authorities with competence in relation to such systems.
CHAPTER IV
Provision of investment services and activities by third country firms
Article 39
Establishment of a branch
Where a Member State requires that a third-country firm intending to provide investment services or to perform investment activities with or without any ancillary services in its territory establish a branch, the branch shall acquire a prior authorisation by the competent authorities of that Member State in accordance with the following conditions:
the provision of services for which the third-country firm requests authorisation is subject to authorisation and supervision in the third country where the firm is established and the requesting firm is properly authorised, whereby the competent authority pays due regard to any FATF recommendations in the context of anti-money laundering and countering the financing of terrorism;
cooperation arrangements, that include provisions regulating the exchange of information for the purpose of preserving the integrity of the market and protecting investors, are in place between the competent authorities in the Member State where the branch is to be established and competent supervisory authorities of the third country where the firm is established;
sufficient initial capital is at free disposal of the branch;
one or more persons are appointed to be responsible for the management of the branch and they all comply with the requirement laid down in Article 9(1);
the third country where the third-country firm is established has signed an agreement with the Member State where the branch is to be established, which fully comply with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and on Capital and ensures an effective exchange of information in tax matters, including, if any, multilateral tax agreements;
the firm belongs to an investor-compensation scheme authorised or recognised in accordance with Directive 97/9/EC.
Article 40
Obligation to provide information
A third-country firm intending to obtain authorisation for the provision of any investment services or the performance of investment activities with or without any ancillary services in the territory of a Member State through a branch shall provide the competent authority of that Member State with the following:
the name of the authority responsible for its supervision in the third country concerned. When more than one authority is responsible for supervision, the details of the respective areas of competence shall be provided;
all relevant details of the firm (name, legal form, registered office and address, members of the management body, relevant shareholders) and a programme of operations setting out the investment services and/or activities as well as the ancillary services to be provided and the organisational structure of the branch, including a description of any outsourcing to third parties of essential operating functions;
the name of the persons responsible for the management of the branch and the relevant documents to demonstrate compliance with requirements laid down in Article 9(1);
information about the initial capital at free disposal of the branch.
Article 41
Granting of the authorisation
The competent authority of the Member State where the third‐country firm has established or intends to establish its branch shall only grant authorisation where the competent authority is satisfied that:
the conditions under Article 39 are fulfilled; and
the branch of the third‐country firm will be able to comply with the provisions referred to in paragraphs 2 and 3.
The competent authority shall inform the third‐country firm, within six months of submission of a complete application, whether or not the authorisation has been granted.
The branch of the third‐country firm authorised in accordance with paragraph 1 shall comply with the obligations laid down in Articles 16 to 20, 23, 24, 25 and 27, Article 28(1), and Articles 30, 31 and 32 of this Directive and in Articles 3 to 26 of Regulation (EU) No 600/2014 and the measures adopted pursuant thereto and shall be subject to the supervision of the competent authority in the Member State where the authorisation was granted.
Member States shall not impose any additional requirements on the organisation and operation of the branch in respect of the matters covered by this Directive and shall not treat any branch of third‐country firms more favourably than Union firms.
Member States shall ensure that competent authorities notify ESMA on an annual basis of the list of branches of third‐country firms active on their territory.
ESMA shall publish on annual basis a list of third‐country branches active in the Union, including the name of the third‐country firm to which the branch belongs.
The branch of the third‐country firm that is authorised in accordance with paragraph 1 shall report to the competent authority referred to in paragraph 2 the following information on an annual basis:
the scale and scope of the services and activities carried out by the branch in that Member State;
for third‐country firms performing the activity listed in point (3) of Section A of Annex I, their monthly minimum, average and maximum exposure to EU counterparties;
for third‐country firms providing one or both of the services listed in point (6) of Section A of Annex I, the total value of financial instruments originating from EU counterparties underwritten or placed on a firm commitment basis over the previous 12 months;
the turnover and the aggregated value of the assets corresponding to the services and activities referred to in point (a);
a detailed description of the investor protection arrangements available to the clients of the branch, including the rights of those clients resulting from the investor‐compensation scheme referred to in point (f) of Article 39(2);
their risk management policy and arrangements applied by the branch for the services and activities referred to in point (a);
the governance arrangements, including key function holders for the activities of the branch;
any other information considered by the competent authority to be necessary to enable comprehensive monitoring of the activities of the branch.
Upon request, the competent authorities shall communicate the following information to ESMA:
all the authorisations for branches authorised in accordance with paragraph 1 and any subsequent changes to such authorisations;
the scale and scope of the services and activities carried out by an authorised branch in the Member State;
the turnover and the total assets corresponding to the services and activities referred to in point (b);
the name of the third-country group to which an authorised branch belongs.
ESMA shall develop draft implementing technical standards to specify the format in which the information referred to in paragraphs 3 and 4 is to be reported.
ESMA shall submit those draft implementing technical standards to the Commission by 26 September 2020.
Power is conferred on the Commission to supplement this Directive by adopting the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 42
Provision of services at the exclusive initiative of the client
Member States shall ensure that where a retail client or professional client within the meaning of Section II of Annex II established or situated in the Union initiates at its own exclusive initiative the provision of an investment service or activity by a third‐country firm, the requirement for authorisation under Article 39 shall not apply to the provision of that service or activity by the third‐country firm to that person, including a relationship specifically relating to the provision of that service or activity.
Without prejudice to intragroup relations, where a third‐country firm, including through an entity acting on its behalf or having close links with such third‐country firm or any other person acting on behalf of such entity, solicits clients or potential clients in the Union, it shall not be deemed to be a service provided at the own exclusive initiative of the client.
Article 43
Withdrawal of authorisations
The competent authority which granted an authorisation under Articles 41 may withdraw the authorisation issued to a third country firm where such a firm:
does not make use of the authorisation within 12 months, expressly renounces the authorisation or has provided no investment services or performed no investment activity for the preceding six months, unless the Member State concerned has provided for the authorisation to lapse in such cases;
has obtained the authorisation by making false statements or by any other irregular means;
no longer meets the conditions under which authorisation was granted;
has seriously and systematically infringed the provisions adopted pursuant to this Directive governing the operating conditions for investment firms and applicable to third-country firms;
falls within any of the cases where national law, in respect of matters outside the scope of this Directive, provides for withdrawal.
TITLE III
REGULATED MARKETS
Article 44
Authorisation and applicable law
Authorisation as a regulated market shall be granted only where the competent authority is satisfied that both the market operator and the systems of the regulated market comply at least with the requirements laid down in this Title.
In the case of a regulated market that is a legal person and that is managed or operated by a market operator other than the regulated market itself, Member States shall establish how the different obligations imposed on the market operator under this Directive are to be allocated between the regulated market and the market operator.
The market operator shall provide all information, including a programme of operations setting out, inter alia, the types of business envisaged and the organisational structure, necessary to enable the competent authority to satisfy itself that the regulated market has established, at the time of initial authorisation, all the necessary arrangements to meet its obligations under this Title.
Member States shall also ensure that the market operator is entitled to exercise the rights that correspond to the regulated market that it manages by virtue of this Directive.
The competent authority may withdraw the authorisation issued to a regulated market, where it:
does not make use of the authorisation within 12 months, expressly renounces the authorisation or has not operated for the preceding six months, unless the Member State concerned has provided for authorisation to lapse in such cases;
has obtained the authorisation by making false statements or by any other irregular means;
no longer meets the conditions under which authorisation was granted;
has seriously and systematically infringed the provisions adopted pursuant to this Directive or Regulation (EU) No 600/2014;
falls within any of the cases where national law provides for withdrawal.
Article 45
Requirements for the management body of a market operator
Members of the management body shall, in particular, fulfil the following requirements:
All members of the management body shall commit sufficient time to perform their functions in the market operator. The number of directorships a member of the management body can hold, in any legal entity, at the same time shall take into account individual circumstances and the nature, scale and complexity of the market operator’s activities.
Unless representing the Member State, members of the management body of market operators that are significant in terms of their size, internal organisation and the nature, the scope and the complexity of their activities shall not at the same time hold positions exceeding more than one of the following combinations:
one executive directorship with two non-executive directorships;
four non-executive directorships.
Executive or non-executive directorships held within the same group or undertakings where the market operator owns a qualifying holding shall be considered to be one single directorship.
Competent authorities may authorise members of the management body to hold one additional non-executive directorship. Competent authorities shall regularly inform ESMA of such authorisations.
Directorships in organisations which do not pursue predominantly commercial objectives shall be exempt from the limitation on the number of directorships a member of a management body can hold.
The management body shall possess adequate collective knowledge, skills and experience to be able to understand the market operator’s activities, including the main risks.
Each member of the management body shall act with honesty, integrity and independence of mind to effectively assess and challenge the decisions of the senior management where necessary and to effectively oversee and monitor decision-making.
The nomination committee shall carry out the following:
identify and recommend, for the approval of the management body or for approval of the general meeting, candidates to fill management body vacancies. In doing so, the nomination committee shall evaluate the balance of knowledge, skills, diversity and experience of the management body. Further, the committee shall prepare a description of the roles and capabilities for a particular appointment, and assess the time commitment expected. Furthermore, the nomination committee shall decide on a target for the representation of the underrepresented gender in the management body and prepare a policy on how to increase the number of the underrepresented gender in the management body in order to meet that target;
periodically, and at least annually, assess the structure, size, composition and performance of the management body, and make recommendations to the management body with regard to any changes;
periodically, and at least annually, assess the knowledge, skills and experience of individual members of the management body and of the management body collectively, and report to the management body accordingly;
periodically review the policy of the management body for selection and appointment of senior management and make recommendations to the management body.
In performing its duties, the nomination committee shall, to the extent possible and on an ongoing basis, take account of the need to ensure that the management body’s decision making is not dominated by any one individual or small group of individuals in a manner that is detrimental to the interests of the market operator as a whole.
In performing its duties, the nomination committee shall be able to use any forms of resources it deems appropriate, including external advice.
Where, under national law, the management body does not have any competence in the process of selection and appointment of any of its members, this paragraph shall not apply.
Member States shall ensure that the management body monitors and periodically assesses the effectiveness of the market operator’s governance arrangements and takes appropriate steps to address any deficiencies.
Members of the management body shall have adequate access to information and documents which are needed to oversee and monitor management decision-making.
Member States shall ensure that, in the process of authorisation of a regulated market, the person or persons who effectively direct the business and the operations of an already authorised regulated market in accordance with this Directive are deemed to comply with the requirements laid down in paragraph 1.
ESMA shall issue guidelines on the following:
the notion of sufficient time commitment of a member of the management body to perform that member’s functions, in relation to the individual circumstances and the nature, scale and complexity of activities of the market operator;
the notion of adequate collective knowledge, skills and experience of the management body as referred to in point (b) of paragraph 2;
the notions of honesty, integrity and independence of mind of a member of the management body as referred to in point (c) of paragraph 2;
the notion of adequate human and financial resources devoted to the induction and training of members of the management body as referred to in paragraph 3;
the notion of diversity to be taken into account for the selection of members of the management body as referred to in paragraph 5.
ESMA shall issue those guidelines by 3 January 2016.
Article 46
Requirements relating to persons exercising significant influence over the management of the regulated market
Member States shall require the market operator of the regulated market:
to provide the competent authority with, and to make public, information regarding the ownership of the regulated market and/or the market operator, and in particular, the identity and scale of interests of any parties in a position to exercise significant influence over the management;
to inform the competent authority of and to make public any transfer of ownership which gives rise to a change in the identity of the persons exercising significant influence over the operation of the regulated market.
Article 47
Organisational requirements
Member States shall require the regulated market:
to have arrangements to identify clearly and manage the potential adverse consequences, for the operation of the regulated market or for its members or participants, of any conflict of interest between the interest of the regulated market, its owners or its market operator and the sound functioning of the regulated market, and in particular where such conflicts of interest might prove prejudicial to the accomplishment of any functions delegated to the regulated market by the competent authority;
to be adequately equipped to manage the risks to which it is exposed, to implement appropriate arrangements and systems to identify all significant risks to its operation, and to put in place effective measures to mitigate those risks;
to have arrangements for the sound management of the technical operations of the system, including the establishment of effective contingency arrangements to cope with risks of systems disruptions;
to have transparent and non-discretionary rules and procedures that provide for fair and orderly trading and establish objective criteria for the efficient execution of orders;
to have effective arrangements to facilitate the efficient and timely finalisation of the transactions executed under its systems;
to have available, at the time of authorisation and on an ongoing basis, sufficient financial resources to facilitate its orderly functioning, having regard to the nature and extent of the transactions concluded on the market and the range and degree of the risks to which it is exposed;
to have arrangements in place to ensure that it meets data quality standards pursuant to Article 22b of Regulation (EU) No 600/2014;
to have at least three materially active members or users, each having the opportunity to interact with all the others in respect of price formation.
Article 48
Systems resilience, circuit breakers and electronic trading
Member States shall require a regulated market to have in place:
written agreements with all investment firms pursuing a market making strategy on the regulated market;
schemes to ensure that a sufficient number of investment firms participate in such agreements which require them to post firm quotes at competitive prices with the result of providing liquidity to the market on a regular and predictable basis, where such a requirement is appropriate to the nature and scale of the trading on that regulated market.
The written agreement referred to in paragraph 2 shall at least specify:
the obligations of the investment firm in relation to the provision of liquidity and where applicable any other obligation arising from participation in the scheme referred to in paragraph 2(b);
any incentives in terms of rebates or otherwise offered by the regulated market to an investment firm so as to provide liquidity to the market on a regular and predictable basis and, where applicable, any other rights accruing to the investment firm as a result of participation in the scheme referred to in paragraph 2(b).
The regulated market shall monitor and enforce compliance by investment firms with the requirements of such binding written agreements. The regulated market shall inform the competent authority about the content of the binding written agreement and shall, upon request, provide all further information to the competent authority necessary to enable the competent authority to satisfy itself of compliance by the regulated market with this paragraph.
Member States shall ensure that a regulated market reports the parameters for halting trading and any material changes to those parameters to the competent authority in a consistent and comparable manner, and that the competent authority shall in turn report them to ESMA. Member States shall require that where a regulated market which is material in terms of liquidity in that financial instrument halts trading, in any Member State, that trading venue has the necessary systems and procedures in place to ensure that it will notify competent authorities in order for them to coordinate a market-wide response and determine whether it is appropriate to halt trading on other venues on which the financial instrument is traded until trading resumes on the original market.
Member States shall require a regulated market to disclose publicly on its website information about the circumstances leading to the halting or constraining of trading and on the principles for establishing the main technical parameters used to do so.
Member States shall ensure that, where a regulated market does not halt or constrain trading as referred to in the first subparagraph, despite the fact that a significant price movement in a financial instrument or related financial instruments has led to disorderly trading conditions on one or several markets, competent authorities are able to take appropriate measures to re-establish the normal functioning of the markets, including using the supervisory powers referred to in Article 69(2), points (m) to (p).
Member States shall also require that the regulated market set appropriate standards regarding risk controls and thresholds on trading through such access and is able to distinguish and if necessary to stop orders or trading by a person using direct electronic access separately from other orders or trading by the member or participant.
The regulated market shall have arrangements in place to suspend or terminate the provision of direct electronic access by a member or participant to a client in the case of non-compliance with this paragraph.
Member States shall allow a regulated market to adjust its fees for cancelled orders according to the length of time for which the order was maintained and to calibrate the fees to each financial instrument to which they apply.
Member States may allow a regulated market to impose a higher fee for placing an order that is subsequently cancelled than an order which is executed and to impose a higher fee on participants placing a high ratio of cancelled orders to executed orders and on those operating a high-frequency algorithmic trading technique in order to reflect the additional burden on system capacity.
ESMA shall develop draft regulatory technical standards further specifying:
the requirements to ensure trading systems of regulated markets are resilient and have adequate capacity;
the ratio referred to in paragraph 6, taking into account factors such as the value of unexecuted orders in relation to the value of executed transactions;
the controls concerning direct electronic access in such a way as to ensure that the controls applied to sponsored access are at least equivalent to those applied to direct market access;
the requirements to ensure that co-location services and fee structures are fair and non-discriminatory and that fee structures do not create incentives for disorderly trading conditions or market abuse;
the determination of where a regulated market is material in terms of liquidity in that financial instrument;
the requirements to ensure that market making schemes are fair and non-discriminatory and to establish minimum market making obligations that regulated markets must provide for when designing a market making scheme and the conditions under which the requirement to have in place a market making scheme is not appropriate, taking into account the nature and scale of the trading on that regulated market, including whether the regulated market allows for or enables algorithmic trading to take place through its systems;
the requirements to ensure appropriate testing of algorithms so as to ensure that algorithmic trading systems including high-frequency algorithmic trading systems cannot create or contribute to disorderly trading conditions on the market;
the principles that regulated markets are to consider when establishing their mechanisms to halt or constrain trading in accordance with paragraph 5, taking into account the liquidity of different asset classes and sub-classes, the nature of the market model and the types of users, and without prejudice to the discretion of regulated markets in setting those mechanisms;
the information that regulated markets are to disclose, including the parameters for halting trading that regulated markets are to report to competent authorities, pursuant to paragraph 5.
ESMA shall submit those draft regulatory technical standards to the Commission by 29 March 2025.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
▼M11 —————
Article 49
Tick sizes
The tick size regimes referred to in paragraph 1 shall:
be calibrated to reflect the liquidity profile of the financial instrument in different markets and the average bid-ask spread, taking into account the desirability of enabling reasonably stable prices without unduly constraining further narrowing of spreads;
adapt the tick size for each financial instrument appropriately.
In respect of shares with an International Securities Identification Number (ISIN) issued outside the European Economic Area (EEA), or shares which have an EEA ISIN and which are traded on a third-country venue in the local currency or in a non-EEA currency, as referred to in Article 23(1), point (a), of Regulation (EU) No 600/2014 for which the venue that is the most relevant market in terms of liquidity is in a third country, regulated markets may provide for the same tick size that applies on that venue.
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
ESMA shall submit any such draft regulatory technical standards to the Commission by 3 January 2016.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
▼M11 —————
Article 51
Admission of financial instruments to trading
Those rules shall ensure that any financial instruments admitted to trading on a regulated market are capable of being traded in a fair, orderly and efficient manner and, in the case of transferable securities, are freely negotiable.
Member States shall ensure that the regulated market establishes arrangements which facilitate its members or participants in obtaining access to information which has been made public under Union law.
ESMA shall develop draft regulatory technical standards which:
specify the characteristics of different classes of financial instruments to be taken into account by the regulated market when assessing whether a financial instrument is issued in a manner consistent with the conditions laid down in the second subparagraph of paragraph 1 for admission to trading on the different market segments which it operates;
clarify the arrangements that the regulated market is required to implement so as to be considered to have fulfilled its obligation to verify that the issuer of a transferable security complies with its obligations under Union law in respect of initial, ongoing or ad hoc disclosure obligations;
clarify the arrangements that the regulated market has to establish pursuant to paragraph 3 in order to facilitate its members or participants in obtaining access to information which has been made public under the conditions established by Union law.
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
Article 52
Suspension and removal of financial instruments from trading on a regulated market
The competent authority, in whose jurisdiction the suspension or removal originated, shall require that other regulated markets, MTFs, OTFs and systematic internalisers, which fall under its jurisdiction and trade the same financial instrument or derivatives as referred to in points (4) to (10) of Section C of Annex I to this Directive that relate or are referenced to that financial instrument, also suspend or remove that financial instrument or derivatives from trading, where the suspension or removal is due to suspected market abuse, a take-over bid or the non-disclosure of inside information about the issuer or financial instrument infringing Articles 7 and 17 of Regulation (EU) No. 596/2014 except where such suspension or removal could cause significant damage to the investors’ interests or the orderly functioning of the market.
Each notified competent authority shall communicate its decision to ESMA and other competent authorities, including an explanation if the decision was not to suspend or remove from trading the financial instrument or derivatives as referred to in points (4) to (10) of Section C of Annex I that relate or are referenced to that financial instrument.
The competent authority shall immediately make public and communicate to ESMA and the competent authorities of the other Member States such a decision.
The notified competent authorities of the other Member States shall require that regulated markets, other MTFs, other OTFs and systematic internalisers, which fall under their jurisdiction and trade the same financial instrument or derivatives referred to in points (4) to (10) of Section C of Annex I to this Directive that relate or are referenced to that financial instrument, also suspend or remove that financial instrument or derivatives from trading, where the suspension or removal is due to suspected market abuse, a take-over bid or the non-disclosure of inside information about the issuer or financial instrument infringing Articles 7 and 17 of Regulation (EU) No 596/2014 except where such suspension or removal could cause significant damage to the investors’ interests or the orderly functioning of the market.
This paragraph applies also when the suspension from trading of a financial instrument or derivatives as referred to in points (4) to (10) of Section C of Annex I that relate or are referenced to that financial instrument is lifted.
The notification procedure referred to in this paragraph shall also apply in the case where the decision to suspend or remove from trading a financial instrument or derivatives as referred to in points (4) to (10) of Section C of Annex I that relate or are referenced to that financial instrument is taken by the competent authority pursuant to points (m) and (n) of Article 69(2).
In order to ensure that the obligation to suspend or remove from trading such derivatives is applied proportionately, ESMA shall develop draft regulatory technical standards to further specify the cases in which the connection between a derivative relating or referenced to a financial instrument suspended or removed from trading and the original financial instrument implies that the derivative are also to be suspended or removed from trading, in order to achieve the objective of the suspension or removal of the underlying financial instrument.
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 53
Access to a regulated market
The rules referred to in paragraph 1 shall specify any obligations for the members or participants arising from:
the constitution and administration of the regulated market;
rules relating to transactions on the market;
professional standards imposed on the staff of the investment firms or credit institutions that are operating on the market;
the conditions established, for members or participants other than investment firms and credit institutions, under paragraph 3;
the rules and procedures for the clearing and settlement of transactions concluded on the regulated market.
Regulated markets may admit as members or participants investment firms, credit institutions authorised under Directive 2013/36/EU and other persons who:
are of sufficient good repute;
have a sufficient level of trading ability, competence and experience;
have, where applicable, adequate organisational arrangements;
have sufficient resources for the role they are to perform, taking into account the different financial arrangements that the regulated market may have established in order to guarantee the adequate settlement of transactions.
The regulated market shall communicate to the competent authority of its home Member State the Member State in which it intends to provide such arrangements. The competent authority of the home Member State shall communicate that information to the Member State in which the regulated market intends to provide such arrangements within 1 month. ESMA may request access to that information in accordance with the procedure and under the conditions set out in Article 35 of Regulation (EU) No 1095/2010.
The competent authority of the home Member State of the regulated market shall, on the request of the competent authority of the host Member State and, without undue delay, communicate the identity of the members or participants of the regulated market established in that Member State.
Article 54
Monitoring of compliance with the rules of the regulated market and with other legal obligations
The competent authorities of the regulated markets shall communicate to ESMA and to the competent authorities of the other Member States the information referred to in the first subparagraph.
In relation to conduct that may indicate behaviour that is prohibited under Regulation (EU) No 596/2014, a competent authority shall be convinced that such behaviour is being or has been carried out before it notifies the competent authorities of the other Member States and ESMA.
Article 55
Provisions regarding CCP and clearing and settlement arrangements
In order to avoid undue duplication of control, the competent authority shall take into account the oversight/supervision of the clearing and settlement system already exercised by the central banks as overseers of clearing and settlement systems or by other supervisory authorities with competence in relation to such systems.
Article 56
List of regulated markets
Each Member State shall draw up a list of the regulated markets for which it is the home Member State and shall forward that list to the other Member States and ESMA. A similar communication shall be effected in respect of each change to that list. ESMA shall publish and keep up-to-date a list of all regulated markets on its website. That list shall contain the unique code established by ESMA in accordance with Article 65(6) identifying the regulated markets for use in reports in accordance with point (g) of Article 65(1) and point (g) of Article 65(2) of this Directive and with Articles 6, 10 and 26 of Regulation (EU) No 600/2014.
TITLE IV
POSITION LIMITS AND POSITION MANAGEMENT CONTROLS IN COMMODITY DERIVATIVES AND REPORTING
Article 57
Position limits in commodity derivatives and position management controls in commodity derivatives and derivatives of emission allowances
Member States shall ensure that competent authorities, in line with the calculation methodology determined by ESMA in the regulatory technical standards adopted in accordance with paragraph 3, set and apply limits on the size of a net position which a person can hold at all times in agricultural commodity derivatives and critical or significant commodity derivatives that are traded on trading venues, and in economically equivalent OTC contracts. Commodity derivatives shall be considered to be critical or significant where the sum of all net positions of end position holders constitutes the size of their open interest and is at a minimum of 300 000 lots on average over a one-year period. The limits shall be set based on all positions held by a person and those held on his or her behalf at an aggregate group level in order to:
prevent market abuse;
support orderly pricing and settlement conditions, including preventing market distorting positions, and ensuring, in particular, convergence between prices of derivatives in the delivery month and spot prices for the underlying commodity, without prejudice to price discovery on the market for the underlying commodity.
The position limits referred to in paragraph 1 shall not apply to:
positions held by, or on behalf of, a non-financial entity, and which are objectively measurable as reducing risks directly relating to the commercial activity of that non-financial entity;
positions held by, or on behalf of, a financial entity that is part of a predominantly commercial group and is acting on behalf of a non-financial entity of the predominantly commercial group, where those positions are objectively measurable as reducing risks directly relating to the commercial activity of that non-financial entity;
positions held by financial and non-financial counterparties for positions that are objectively measurable as resulting from transactions entered into to fulfil obligations to provide liquidity on a trading venue as referred to in point (c) of the fourth subparagraph of Article 2(4);
any other securities as referred to in point (c) of point (44) of Article 4(1) which relate to a commodity or an underlying as referred to in Section C.10 of Annex I.
ESMA shall develop draft regulatory technical standards to determine a procedure by which a financial entity that is part of a predominantly commercial group may apply for a hedging exemption for positions held by that financial entity that are objectively measurable as reducing risks directly relating to the commercial activities of the non-financial entities of the group.
ESMA shall develop draft regulatory technical standards to determine a procedure setting out how persons may apply for an exemption for positions resulting from transactions entered into to fulfil obligations to provide liquidity on a trading venue.
ESMA shall submit the draft regulatory technical standards referred to in the third and fourth subparagraphs to the Commission by 28 November 2021.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the third and fourth subparagraphs of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
ESMA shall draw up a list of critical or significant commodity derivatives referred to in paragraph 1 and develop draft regulatory technical standards to determine the calculation methodology that competent authorities are to apply when establishing the spot month position limits and other months’ position limits for physically settled and cash settled commodity derivatives based on the characteristics of the relevant derivative concerned.
When drawing up the list of critical or significant commodity derivatives referred to in paragraph 1, ESMA shall take into account the following factors:
the number of market participants;
the commodity underlying the derivative concerned.
When determining the calculation methodology referred to in the first subparagraph, ESMA shall take into account the following factors:
the deliverable supply in the underlying commodity;
the overall open interest in that derivative and the overall open interest in other financial instruments with the same underlying commodity;
the number and size of the market participants;
the characteristics of the underlying commodity market, including patterns of production, consumption and transportation to market;
the development of new commodity derivatives;
the experience of investment firms or market operators operating a trading venue and of other jurisdictions regarding the position limits.
ESMA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by 28 November 2021.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
A competent authority shall review the position limits referred to in the first subparagraph where there is a significant change on the market, including a significant change in deliverable supply or open interest, based on its determination of deliverable supply and open interest, and reset those position limits in accordance with the calculation methodology laid down in the regulatory technical standards adopted by the Commission pursuant to paragraph 3.
Where ESMA determines that a position limit is not in line with the methodology for calculation in paragraph 3, it shall take action in accordance with its powers under Article 17 of Regulation (EU) No 1095/2010.
Competent authorities that do not agree with the setting of the single position limit by the central competent authority shall state in writing the full and detailed reasons why they consider that the requirements laid down in paragraph 1 have not been met. ESMA shall settle any dispute arising from a disagreement between competent authorities in accordance with its powers under Article 19 of Regulation (EU) No 1095/2010.
The competent authorities of the trading venues where agricultural commodity derivatives that are based on the same underlying and that share the same characteristics are traded in significant volumes or critical or significant commodity derivatives that are based on the same underlying and that share the same characteristics are traded, and the competent authorities of position holders in those derivatives, shall put in place cooperation arrangements, which shall include the exchange of relevant data, in order to enable the monitoring and enforcement of the single position limit.
►M11 Member States shall ensure that an investment firm or a market operator operating a trading venue which trades in commodity derivatives or derivatives of emission allowances applies position management controls, including powers for the trading venue to: ◄
monitor the open interest positions of persons;
obtain information, including all relevant documentation, from persons about the size and purpose of a position or exposure entered into, information about beneficial or underlying owners, any concert arrangements, and any related assets or liabilities in the underlying market, including, where appropriate, positions held in derivatives of emission allowances or positions held in commodity derivatives that are based on the same underlying and that share the same characteristics on other trading venues and in economically equivalent OTC contracts through members and participants;
request a person to terminate or reduce a position, on a temporary or permanent basis, and to unilaterally take action to ensure the termination or reduction of the position where the person does not comply with such request; and
require a person to provide, on a temporary basis, liquidity back into the market at an agreed price and volume with the express intent of mitigating the effects of a large or dominant position.
ESMA shall develop draft regulatory technical standards to specify the content of position management controls, thereby taking into account the characteristics of the trading venues concerned.
ESMA shall submit those draft regulatory technical standards to the Commission by 28 November 2021.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the second subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
The competent authority shall communicate the same information as well as the details of the position limits it has established to ESMA, which shall publish and maintain on its website a database with summaries of the position limits and position management controls.
ESMA shall develop draft regulatory technical standards to determine:
the criteria and methods for determining whether a position qualifies as reducing risks directly relating to commercial activities;
the methods to determine when positions of a person are to be aggregated within a group;
the criteria for determining whether a contract is an economically equivalent OTC contract to that traded on a trading venue, referred to in paragraph 1, in a way that facilitates the reporting of positions taken in equivalent OTC contracts to the relevant competent authority as determined in Article 58(2);
the definition of what constitutes significant volumes under paragraph 6 of this Article;
the methodology for aggregating and netting OTC and on-venue commodity derivatives positions to establish the net position for purposes of assessing compliance with the limits. Such methodologies shall establish criteria to determine which positions may be netted against one another and shall not facilitate the build-up of positions in a manner inconsistent with the objectives set out in paragraph 1 of this Article;
the procedure setting out how persons may apply for the exemption under the second subparagraph of paragraph 1 of this Article and how the relevant competent authority will approve such applications;
the method for calculation to determine the venue where the largest volume of trading in a commodity derivative takes place and significant volumes under paragraph 6 of this Article.
ESMA shall submit those draft regulatory technical standards referred to in the first subparagraph to the Commission by 3 July 2015.
Power shall be delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
Where competent authorities decide to impose more restrictive position limits, they shall notify ESMA. The notification shall include a justification for the more restrictive position limits. ESMA shall, within 24 hours, issue an opinion on whether it considers that the more restrictive position limits are necessary to address the exceptional case. The opinion shall be published on ESMA’s website.
Where a competent authority imposes limits contrary to an ESMA opinion, it shall immediately publish on its website a notice fully explaining its reasons for doing so.
Member States shall provide that competent authorities can apply their powers to impose sanctions under this Directive for the infringements of position limits set in accordance with this Article to:
positions held by persons situated or operating in its territory or abroad which exceed the limits on commodity derivative contracts the competent authority has set in relation to contracts on trading venues situated or operating in its territory or economically equivalent OTC contracts;
positions held by persons situated or operating in its territory which exceed the limits on commodity derivative contracts set by competent authorities in other Member States.
Article 58
Position reporting by categories of position holders
►M11 Member States shall ensure that an investment firm or a market operator operating a trading venue which trades in commodity derivatives or in derivatives of emission allowances: ◄
make public:
for trading venues where options are traded, two weekly reports, one of which is to exclude options, with the aggregate positions held by the different categories of persons for the different commodity derivatives or derivatives of emission allowances traded on their trading venue, specifying the number of long and short positions by such categories, changes thereto since the previous report, the percentage of the total open interest represented by each category, and the number of persons holding a position in each category in accordance with paragraph 4;
for trading venues where options are not traded, a weekly report on the elements set out in point (i);
provide the competent authority with a complete breakdown of the positions held by all persons, including the members or participants and the clients thereof, on that trading venue, at least on a daily basis.
The obligation laid down in point (a) shall only apply when both the number of persons and their open positions exceed minimum thresholds.
Position reporting shall not be applicable to any other securities as referred to in point (c) of point (44) of Article 4(1) that relate to a commodity or an underlying as referred to in Section C.10 of Annex I.
Member States shall ensure that an investment firm or a market operator operating a trading venue which trades in commodity derivatives or in derivatives of emission allowances communicates the reports referred to in point (a) of the first subparagraph to the competent authority and to ESMA. ESMA shall proceed with a centralised publication of the information included in those reports.
►M11 Persons holding positions in a commodity derivative or in a derivative of emission allowance shall be classified by the investment firm or market operator operating that trading venue according to the nature of their main business, taking account of any applicable authorisation, as either: ◄
investment firms or credit institutions;
investment funds, either an undertaking for collective investments in transferable securities (UCITS) as defined in Directive 2009/65/EC, or an alternative investment fund manager as defined in Directive 2011/61/EC;
other financial institutions, including insurance undertakings and reinsurance undertakings as defined in Directive 2009/138/EC, and institutions for occupational retirement provision as defined in Directive 2003/41/EC;
commercial undertakings;
in the case of derivatives of emission allowances, operators with compliance obligations under Directive 2003/87/EC.
The reports referred to in point (a) of paragraph 1 shall specify the number of long and short positions by category of persons, any changes thereto since the previous report, percent of total open interest represented by each category, and the number of persons in each category.
The reports referred to in point (a) of paragraph 1 and the breakdowns referred to in paragraph 2 shall differentiate between:
positions identified as positions which in an objectively measurable way reduce risks directly relating to commercial activities; and
other positions.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
In the case of derivatives of emission allowances, the reporting shall not prejudice the compliance obligations under Directive 2003/87/EC.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
▼M6 —————
TITLE VI
COMPETENT AUTHORITIES
CHAPTER I
Designation, powers and redress procedures
Article 67
Designation of competent authorities
Any delegation of tasks to entities other than the authorities referred to in paragraph 1 may not involve either the exercise of public authority or the use of discretionary powers of judgement. Member States shall require that, prior to delegation, competent authorities take all reasonable steps to ensure that the entity to which tasks are to be delegated has the capacity and resources to effectively execute all tasks and that the delegation takes place only if a clearly defined and documented framework for the exercise of any delegated tasks has been established stating the tasks to be undertaken and the conditions under which they are to be carried out. Those conditions shall include a clause obliging the entity in question to act and be organised in such a manner as to avoid conflict of interest and so that information obtained from carrying out the delegated tasks is not used unfairly or to prevent competition. The final responsibility for supervising compliance with this Directive and with its implementing measures shall lie with the competent authority or authorities designated in accordance with paragraph 1.
Member States shall inform the Commission, ESMA and the competent authorities of other Member States of any arrangements entered into with regard to delegation of tasks, including the precise conditions regulating such delegation.
Article 68
Cooperation between authorities in the same Member State
If a Member State designates more than one competent authority to enforce a provision of this Directive or of Regulation (EU) No 600/2014, their respective roles shall be clearly defined and they shall cooperate closely.
Each Member State shall require that such cooperation also take place between the competent authorities for the purposes of this Directive or of Regulation (EU) No 600/2014 and the competent authorities responsible in that Member State for the supervision of credit and other financial institutions, pension funds, UCITS, insurance and reinsurance intermediaries and insurance undertakings.
Member States shall require that competent authorities exchange any information which is essential or relevant to the exercise of their functions and duties.
Article 69
Supervisory powers
The powers referred to in paragraph 1 shall include, at least, the following powers to:
have access to any document or other data in any form which the competent authority considers could be relevant for the performance of its duties and receive or take a copy of it;
require or demand the provision of information from any person and if necessary to summon and question a person with a view to obtaining information;
carry out on-site inspections or investigations;
require existing recordings of telephone conversations or electronic communications or other data traffic records held by an investment firm, a credit institution, or any other entity regulated by this Directive or by Regulation (EU) No 600/2014;
require the freezing or the sequestration of assets, or both;
require the temporary prohibition of professional activity;
require the auditors of authorised investment firms, regulated markets and data reporting services providers to provide information;
refer matters for criminal prosecution;
allow auditors or experts to carry out verifications or investigations;
require or demand the provision of information including all relevant documentation from any person regarding the size and purpose of a position or exposure entered into via a commodity derivative, and any assets or liabilities in the underlying market;
require the temporary or permanent cessation of any practice or conduct that the competent authority considers to be contrary to the provisions of Regulation (EU) No 600/2014 and the provisions adopted in the implementation of this Directive and prevent repetition of that practice or conduct;
adopt any type of measure to ensure that investment firms, regulated markets and other persons to whom this Directive or Regulation (EU) No 600/2014 applies, continue to comply with legal requirements;
require the suspension of trading in a financial instrument;
require the removal of a financial instrument from trading, whether on a regulated market or under other trading arrangements;
request any person to take steps to reduce the size of the position or exposure;
limit the ability of any person from entering into a commodity derivative, including by introducing limits on the size of a position any person can hold at all times in accordance with Article 57 of this Directive;
issue public notices;
require, in so far as permitted by national law, existing data traffic records held by a telecommunication operator, where there is a reasonable suspicion of an infringement and where such records may be relevant to an investigation into infringements of this Directive or of Regulation (EU) No 600/2014;
suspend the marketing or sale of financial instruments or structured deposits where the conditions of Articles 40, 41 or 42 of Regulation (EU) No 600/2014 are met;
suspend the marketing or sale of financial instruments or structured deposits where the investment firm has not developed or applied an effective product approval process or otherwise failed to comply with Article 16(3) of this Directive;
require the removal of a natural person from the management board of an investment firm or market operator.
By ►M3 3 July 2017 ◄ , the Member States shall notify the laws, regulations and administrative provisions transposing paragraphs 1 and 2 to the Commission and ESMA. They shall notify the Commission and ESMA without undue delay of any subsequent amendment thereto.
Member States shall ensure that mechanisms are in place to ensure that compensation may be paid or other remedial action be taken in accordance with national law for any financial loss or damage suffered as a result of an infringement of this Directive or of Regulation (EU) No 600/2014.
Article 70
Sanctions for infringements
Member States may decide not to lay down rules for administrative sanctions for infringements which are subject to criminal sanctions under their national law. In that case, Member States shall communicate to the Commission the relevant criminal law provisions.
By ►M3 3 July 2017 ◄ Member States shall notify the laws, regulations and administrative provisions transposing this Article, including any relevant criminal law provisions, to the Commission and ESMA. Member States shall notify the Commission and ESMA without undue delay of any subsequent amendments thereto.
Member States shall ensure that at least an infringement of the following provisions of this Directive or of Regulation (EU) No. 600/2014 shall be regarded as an infringement of this Directive or of Regulation (EU) No. 600/2014:
with regard to this Directive:
point (b) of Article 8;
Article 9(1) to (6);
Article 11(1) and (3);
Article 16(1) to (11);
Article 17(1) to (6);
Article 18(1) to (9) and the first sentence of Article 18(10);
Articles 19 and 20;
Article 21(1);
Article 23(1), (2) and (3);
Article 24(1) to (5) and (7) to (10) and the first and second subparagraphs of Article 24(11);
Article 25(1) to (6);
the second sentence of Article 26(1) and Article 26(2) and (3);
Article 27(1) to (8);
Article 28(1) and (2);
the first subparagraph of Article 29(2), the third subparagraph of Article 29(2), the first sentence of Article 29(3), the first subparagraph of Article 29(4), and Article 29(5);
the second subparagraph of Article 30(1), the first sentence of the second subparagraph of Article 30(3);
Article 31(1), the first subparagraph of Article 31(2) and Article 31(3);
Article 32(1), the first, second and fourth subparagraphs of Article 32(2);
Article 33(3);
Article 34(2), the first sentence of Article 34(4), the first sentence of Article 34(5), the first sentence of Article 34(7);
Article 35(2), the first subparagraph of Article 35(7), the first sentence of Article 35(10);
Article 36(1);
the first subparagraph and the first sentence of the second subparagraph of Article 37(1), and the first subparagraph of Article 37(2);
the fourth subparagraph of Article 44(1), the first sentence of Article 44(2), the first subparagraph of Article 44(3) and point (b) of Article 44(5);
Article 45(1) to (6) and (8);
Article 46(1), points (a) and (b) of Article 46(2);
Article 47;
Article 48(1) to (11);
Article 49(1);
▼M11 —————
Article 51(1) to (4) and the second sentence of Article 51(5);
Article 52(1), the first, second and fifth subparagraphs of Article 52(2);
Article 53(1), (2) and (3) and the first sentence of the second subparagraph of Article 53(6), Article 53(7);
Article 54(1), the first subparagraph of Article 54(2) and Article 54(3);
Article 57(1) and (2), Article 57(8) and the first subparagraph of Article 57(10);
Article 58(1) to (4); and
▼M6 —————
with regard to Regulation (EU) No 600/2014:
Articles 3(1) and (3);
the first subparagraph of Article 4(3);
Article 5;
Article 6;
the first sentence of third subparagraph of Article 7(1);
Article 8(1);
Article 8a(1) and (2);
Article 8b;
Article 10;
Article 11(1), second subparagraph, first sentence, Article 11(1a), second subparagraph, Article 11(1b) and Article 11(3), fourth subparagraph;
Article 11a(1), second subparagraph, first sentence, and Article 11a(1), fourth subparagraph;
Article 12(1);
Article 13(1) and (2);
Article 14(1), (2) and (3);
Article 15(1), first subparagraph, second subparagraph, the first and third sentences, and fourth subparagraph, Article 15(2) and Article 15(4), second sentence;
the second sentence of Article 17(1);
▼M11 —————
Article 20(1) and (1a) and Article 20(2), first sentence;
Article 21(1), (2) and (3);
Article 22(2);
Article 22a(1) and (5) to (8);
Article 22b(1);
Article 22c(1);
Article 23(1) and (2);
Article 25(1) and (2);
the first subparagraph of Article 26(1), Article 26(2) to (5), the first subparagraph of Article 26(6), the first to fifth and eighth subparagraph of Article 26(7);
Article 27(1);
Article 27f(1), (2) and (3), Article 27g(1) to (5) and Article 27i(1) to (4), where an APA or ARM has a derogation in accordance with Article 2(3);
Article 28(1);
Article 29(1) and (2);
Article 30(1);
Article 31(3);
Article 35(1), (2) and (3);
Article 36(1), (2) and (3);
Article 37(1) and (3);
Article 39a;
Articles 40, 41 and 42.
Providing investment services or performing investment activities without the required authorisation or approval in accordance with the following provisions of this Directive or of Regulation (EU) No 600/2014 shall also be considered to be an infringement of this Directive or of Regulation (EU) No 600/2014:
Article 5 or Article 6(2) or Article 34, 35, 39 or 44 of this Directive; or
the third sentence of Article 7(1) of Regulation (EU) No 600/2014 or Article 11(1) of that Regulation, and, where an APA or ARM has a derogation in accordance with Article 2(3) of that Regulation, Article 27b of that Regulation.
In the cases of infringements referred to in paragraphs 3, 4 and 5, Member States shall, in conformity with national law, provide that competent authorities have the power to take and impose at least the following administrative sanctions and measures:
a public statement, which indicates the natural or legal person and the nature of the infringement in accordance with Article 71;
an order requiring the natural or legal person to cease the conduct and to desist from a repetition of that conduct;
in the case of an investment firm, a market operator authorised to operate an MTF or OTF, or a regulated market, withdrawal or suspension of the authorisation of the institution in accordance with Articles 8 and 43 of this Directive and, where an APA or ARM has a derogation in accordance with Article 2(3) of Regulation (EU) No 600/2014, withdrawal or suspension of the authorisation in accordance with Article 27e of that Regulation;
a temporary or, for repeated serious infringements a permanent ban against any member of the investment firm’s management body or any other natural person, who is held responsible, to exercise management functions in investment firms;
a temporary ban on any investment firm being a member of or participant in regulated markets or MTFs or any client of OTFs;
in the case of a legal person, maximum administrative fines of at least EUR 5 000 000 , or in the Member States whose currency is not the euro, the corresponding value in the national currency on 2 July 2014, or of up to 10 % of the total annual turnover of the legal person according to the last available accounts approved by the management body; where the legal person is a parent undertaking or a subsidiary of the parent undertaking which has to prepare consolidated financial accounts in accordance with Directive 2013/34/EU, the relevant total annual turnover shall be the total annual turnover or the corresponding type of income in accordance with the relevant accounting legislative acts according to the last available consolidated accounts approved by the management body of the ultimate parent undertaking;
in the case of a natural person, maximum administrative fines of at least EUR 5 000 000 , or in the Member States whose currency is not the euro, the corresponding value in the national currency on 2 July 2014;
maximum administrative fines of at least twice the amount of the benefit derived from the infringement where that benefit can be determined, even if that exceeds the maximum amounts in points (f) and (g).
Article 71
Publication of decisions
However, where the publication of the identity of the legal persons or of the personal data of the natural persons is considered by the competent authority to be disproportionate following a case-by-case assessment conducted on the proportionality of the publication of such data, or where publication jeopardises the stability of financial markets or an on-going investigation, Member States shall ensure that competent authorities shall either:
defer the publication of the decision to impose the sanction or measure until the moment where the reasons for non-publication cease to exist;
publish the decision to impose the sanction or measure on an anonymous basis in a manner which complies with national law, if such anonymous publication ensures an effective protection of the personal data concerned;
not publish the decision to impose a sanction or measure at all in the event that the options set out in points (a) and (b) are considered to be insufficient to ensure:
that the stability of financial markets would not be put in jeopardy;
the proportionality of the publication of such decisions with regard to measures which are deemed to be of a minor nature.
In the case of a decision to publish a sanction or measure on an anonymous basis, the publication of the relevant data may be postponed for a reasonable period of time if it is envisaged that within that period the reasons for anonymous publication shall cease to exist.
Competent authorities shall inform ESMA of all administrative sanctions imposed but not published in accordance with point (c) of paragraph 1 including any appeal in relation thereto and the outcome thereof. Member States shall ensure that competent authorities receive information and the final judgement in relation to any criminal sanction imposed and submit it to ESMA. ESMA shall maintain a central database of sanctions communicated to it solely for the purposes of exchanging information between competent authorities. That database shall be accessible to competent authorities only and it shall be updated on the basis of the information provided by the competent authorities.
Where Member States have chosen, in accordance with Article 70, to lay down criminal sanctions for infringements of the provisions referred to in that Article, their competent authorities shall provide ESMA annually with anonymised and aggregated data regarding all criminal investigations undertaken and criminal sanctions imposed. ESMA shall publish data on criminal sanctions imposed in an annual report.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 72
Exercise of supervisory powers and powers to impose sanctions
Competent authorities shall exercise the supervisory powers including, investigatory powers and powers to impose remedies, referred to in Article 69 and the powers to impose sanctions referred to in Article 70 in accordance with their national legal frameworks:
directly;
in collaboration with other authorities;
under their responsibility by delegation to entities to which tasks have been delegated pursuant to Article 67(2); or
by application to the competent judicial authorities.
Member States shall ensure that competent authorities, when determining the type and level of an administrative sanction or measure imposed under the exercise of powers to impose sanctions in Article 70, take into account all relevant circumstances, including, where appropriate:
the gravity and the duration of the infringement;
the degree of responsibility of the natural or legal person responsible for the infringement;
the financial strength of the responsible natural or legal person, as indicated in particular by the total turnover of the responsible legal person or the annual income and net assets of the responsible natural person;
the importance of profits gained or losses avoided by the responsible natural or legal person, insofar as they can be determined;
the losses for third parties caused by the infringement, insofar as they can be determined;
the level of cooperation of the responsible natural or legal person with the competent authority, without prejudice to the need to ensure disgorgement of profits gained or losses avoided by that person;
previous infringements by the responsible natural or legal person.
Competent authorities may take into account additional factors to those referred to in the first subparagraph when determining the type and level of administrative sanctions and measures.
Article 73
Reporting of infringements
The mechanisms referred to in the first subparagraph shall include at least:
specific procedures for the receipt of reports on potential or actual infringements and their follow-up, including the establishment of secure communication channels for such reports;
appropriate protection for employees of financial institutions who report infringements committed within the financial institution at least against retaliation, discrimination or other types of unfair treatment;
protection of the identity of both the person who reports the infringements and the natural person who is allegedly responsible for an infringement, at all stages of the procedures unless such disclosure is required by national law in the context of further investigation or subsequent administrative or judicial proceedings.
Article 74
Right of appeal
Member States shall provide that one or more of the following bodies, as determined by national law, also may, in the interests of consumers and in accordance with national law, take action before the courts or competent administrative bodies to ensure that Regulation (EU) No 600/2014 and the national provisions adopted in the implementation of this Directive are applied:
public bodies or their representatives;
consumer organisations having a legitimate interest in protecting consumers;
professional organisations having a legitimate interest in acting to protect their members.
Article 75
Extra-judicial mechanism for consumers complaints
ESMA shall publish and keep up-to-date a list of all extra-judicial mechanisms on its website.
Article 76
Professional secrecy
Article 77
Relations with auditors
►M6 Member States shall provide, at least, that any person authorised within the meaning of Directive 2006/43/EC of the European Parliament and of the Council ( 13 ), performing in an investment firm, in a regulated market, or in an APA or ARM authorised in accordance with Regulation (EU) No 600/2014 which has a derogation in accordance with Article 2(3) of that Regulation, the task described in Article 34 of Directive 2013/34/EU or Article 73 of Directive 2009/65/EC or any other task prescribed by law, shall have a duty to report promptly to the competent authorities any fact or decision concerning that undertaking of which that person has become aware while carrying out that task and which is liable to: ◄
constitute a material infringement of the laws, regulations or administrative provisions which lay down the conditions governing authorisation or which specifically govern pursuit of the activities of investment firms;
affect the continuous functioning of the investment firm;
lead to refusal to certify the accounts or to the expression of reservations.
That person shall also have a duty to report any facts and decisions of which the person becomes aware in the course of carrying out one of the tasks referred to in the first subparagraph in an undertaking having close links with the investment firm within which he is carrying out that task.
Article 78
Data protection
The processing of personal data collected in or for the exercise of the supervisory powers including investigatory powers in accordance with this Directive shall be carried out in accordance with national law implementing Directive 95/46/EC and with Regulation (EC) No 45/2001 where applicable.
CHAPTER II
Cooperation between the competent authorities of the Member States and with ESMA
Article 79
Obligation to cooperate
Where Member States have chosen, in accordance with Article 70, to lay down criminal sanctions for infringements of the provisions referred to in that Article, they shall ensure that appropriate measures are in place so that competent authorities have all the necessary powers to liaise with judicial authorities within their jurisdiction to receive specific information relating to criminal investigations or proceedings commenced for possible infringements of this Directive and of Regulation (EU) No 600/2014 and provide the same to other competent authorities and ESMA to fulfil their obligation to cooperate with each other and ESMA for the purposes of this Directive and of Regulation (EU) No 600/2014.
Competent authorities shall render assistance to competent authorities of the other Member States. In particular, they shall exchange information and cooperate in any investigation or supervisory activities.
Competent authorities may also cooperate with competent authorities of other Member States with respect to facilitating the recovery of fines.
In order to facilitate and accelerate cooperation, and more particularly exchange of information, Member States shall designate a single competent authority as a contact point for the purposes of this Directive and of Regulation (EU) No 600/2014. Member States shall communicate to the Commission, ESMA and to the other Member States the names of the authorities which are designated to receive requests for exchange of information or cooperation pursuant to this paragraph. ESMA shall publish and keep up-to-date a list of those authorities on its website.
Competent authorities may use their powers for the purpose of cooperation, even where the conduct under investigation does not constitute an infringement of any regulation in force in that Member State.
Without prejudice to paragraphs 1 and 4, competent authorities shall notify ESMA and other competent authorities of the details of:
any requests to reduce the size of a position or exposure pursuant to point (o) of Article 69(2);
any limits on the ability of persons to enter into a commodity derivative pursuant to point (p) of Article 69(2).
The notification shall include, where relevant, the details of the request or the demand pursuant to point (j) of Article 69(2) including the identity of the person or persons to whom it was addressed and the reasons therefor, as well as the scope of the limits introduced pursuant to point (p) of Article 69(2) including the person concerned, the applicable financial instruments, any limits on the size of positions the person can hold at all times, any exemptions thereto granted in accordance with Article 57, and the reasons therefor.
The notifications shall be made not less than 24 hours before the actions or measures are intended to take effect. In exceptional circumstances, a competent authority may make the notification less than 24 hours before the measure is intended to take effect where it is not possible to give 24 hours’ notice.
A competent authority of a Member State that receives notification under this paragraph may take measures in accordance with point (o) or (p) of Article 69(2) where it is satisfied that the measure is necessary to achieve the objective of the other competent authority. The competent authority shall also give notice in accordance with this paragraph where it proposes to take measures.
When an action under points (a) or (b) of the first subparagraph of this paragraph relates to wholesale energy products, the competent authority shall also notify the Agency for the Cooperation of Energy Regulators (ACER) established under Regulation (EC) No 713/2009.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 80
Cooperation between competent authorities in supervisory activities, for on-site verifications or investigations
Where a competent authority receives a request with respect to an on-the-spot verification or an investigation, it shall, within the framework of its powers:
carry out the verifications or investigations itself;
allow the requesting authority to carry out the verification or investigation;
allow auditors or experts to carry out the verification or investigation.
ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation. (EU) No 1095/2010.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 81
Exchange of information
Competent authorities exchanging information with other competent authorities under this Directive or Regulation (EU) No 600/2014 may indicate at the time of communication that such information must not be disclosed without their express agreement, in which case such information may be exchanged solely for the purposes for which those authorities gave their agreement.
Authorities as referred to in Article 71 as well as other bodies or natural and legal persons receiving confidential information under paragraph 1 of this Article or under Articles 77 and 88 may use it only in the course of their duties, in particular:
to check that the conditions governing the taking‐up of the business of investment firms are met and to facilitate the monitoring of the conduct of that business, administrative and accounting procedures and internal‐control mechanisms;
to monitor the proper functioning of trading venues;
to impose sanctions;
in administrative appeals against decisions by the competent authorities;
in court proceedings initiated under Article 74;
in the extra-judicial mechanism for investors’ complaints provided for in Article 75.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 82
Binding mediation
The competent authorities may refer to ESMA situations where a request relating to one of the following has been rejected or has not been acted upon within a reasonable time:
to carry out a supervisory activity, an on-the-spot verification, or an investigation, as provided for in Article 80; or
to exchange information as provided for in Article 81.
Article 83
Refusal to cooperate
A competent authority may refuse to act on a request for cooperation in carrying out an investigation, on-the-spot verification or supervisory activity as provided for in Article 84 or to exchange information as provided for in Article 81 only where:
judicial proceedings have already been initiated in respect of the same actions and the same persons before the authorities of the Member State addressed;
final judgment has already been delivered in the Member State addressed in respect of the same persons and the same actions.
In the case of such a refusal, the competent authority shall notify the requesting competent authority and ESMA accordingly, providing as detailed information as possible.
Article 84
Consultation prior to authorisation
The competent authorities of the other Member State involved shall be consulted prior to granting authorisation to an investment firm which is any of the following:
a subsidiary of an investment firm or market operator or credit institution authorised in another Member State;
a subsidiary of the parent undertaking of an investment firm or credit institution authorised in another Member State;
controlled by the same natural or legal persons who control an investment firm or credit institution authorised in another Member State.
The competent authority of the Member State responsible for the supervision of credit institutions or insurance undertakings shall be consulted prior to granting an authorisation to an investment firm or market operator which is any of the following:
a subsidiary of a credit institution or insurance undertaking authorised in the Union;
a subsidiary of the parent undertaking of a credit institution or insurance undertaking authorised in the Union;
controlled by the same person, whether natural or legal, who controls a credit institution or insurance undertaking authorised in the Union.
ESMA shall submit those draft implementing technical standards to the Commission by 3 January 2016.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 85
Powers for host Member States
Article 86
Precautionary measures to be taken by host Member States
If, despite the measures taken by the competent authority of the home Member State or because such measures prove inadequate, the investment firm persists in acting in a manner that is clearly prejudicial to the interests of host Member State investors or the orderly functioning of markets, the following shall apply:
after informing the competent authority of the home Member State, the competent authority of the host Member State shall take all the appropriate measures needed in order to protect investors and the proper functioning of the markets, which shall include the possibility of preventing offending investment firms from initiating any further transactions within their territories. The Commission and ESMA shall be informed of such measures without undue delay; and
the competent authority of the host Member State may refer the matter to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
If the investment firm concerned fails to take the necessary steps, the competent authorities of the host Member State shall take all appropriate measures to ensure that the investment firm concerned puts an end to its irregular situation. The nature of those measures shall be communicated to the competent authorities of the home Member State.
Where, despite the measures taken by the host Member State, the investment firm persists in infringing the legal or regulatory provisions referred to in the first subparagraph in force in the host Member State, the competent authority of the host Member State shall, after informing the competent authority of the home Member State, take all the appropriate measures needed in order to protect investors and the proper functioning of the markets. The Commission and ESMA shall be informed of such measures without undue delay.
In addition, the competent authority of the host Member State may refer the matter to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
Where, despite the measures taken by the competent authority of the home Member State or because such measures prove inadequate, that regulated market or the MTF or OTF persists in acting in a manner that is clearly prejudicial to the interests of host Member State investors or the orderly functioning of markets, the competent authority of the host Member State shall, after informing the competent authority of the home Member State, take all the appropriate measures needed in order to protect investors and the proper functioning of the markets, which shall include the possibility of preventing that regulated market or the MTF or OTF from making their arrangements available to remote members or participants established in the host Member State. The Commission and ESMA shall be informed of such measures without undue delay.
In addition, the competent authority of the host Member State may refer the matter to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
Article 87
Cooperation and exchange of information with ESMA
Article 87a
Accessibility of information on the European single access point
Member States shall ensure that the information complies with the following requirements:
be submitted in a data extractable format as defined in Article 2, point (3), of Regulation (EU) 2023/2859 or, where required by Union law, in a machine-readable format, as defined in Article 2, point (4), of that Regulation;
be accompanied by the following metadata:
all the names of the investment firm, market operator or issuer to which the information relates;
the legal entity identifier of the investment firm, market operator or issuer, as specified pursuant to Article 7(4), point (b), of Regulation (EU) 2023/2859;
the size of the investment firm, market operator or issuer by category, as specified pursuant to Article 7(4), point (d), of that Regulation;
the type of information, as classified pursuant to Article 7(4), point (c), of that Regulation;
an indication of whether the information contains personal data.
For the purpose of making the information referred to in Article 46(2) of this Directive accessible on ESAP, the collection body as defined in Article 2, point (2), of Regulation (EU) 2023/2859 shall be the competent authority.
Member States shall ensure that the information complies with the following requirements:
be submitted in a data extractable format, as defined in Article 2, point (3), of Regulation (EU) 2023/2859;
be accompanied by the following metadata:
all the names of the investment firm or market operator to which the information relates;
where available, the legal entity identifier of the investment firm or market operator, as specified pursuant to Article 7(4), point (b), of Regulation (EU) 2023/2859;
the type of information, as classified pursuant to Article 7(4), point (c), of that Regulation;
an indication of whether the information contains personal data.
That information shall comply with the following requirements:
be submitted in a data extractable format as defined in Article 2, point (3), of Regulation (EU) 2023/2859;
be accompanied by the following metadata:
all the names of the investment firm or market operator to which the information relates;
where available, the legal entity identifier of the investment firm or market operator, as specified pursuant to Article 7(4), point (b), of Regulation (EU) 2023/2859;
the type of information, as classified pursuant to Article 7(4), point (c), of that Regulation;
an indication of whether the information contains personal data.
Member States shall ensure that the information complies with the following requirements:
be submitted in a data extractable format as defined in Article 2, point (3), of Regulation (EU) 2023/2859;
be accompanied by the following metadata:
all the names of the tied agent to which the information relates;
where available, the legal entity identifier of the tied agent, as specified pursuant to Article 7(4), point (b), of Regulation (EU) 2023/2859;
the type of information, as classified pursuant to Article 7(4), point (c), of that Regulation;
an indication of whether the information contains personal data.
For the purpose of ensuring the efficient collection and management of information submitted in accordance with paragraph 1, ESMA shall develop draft implementing technical standards to specify the following:
any other metadata to accompany the information;
the structuring of data in the information;
for which information a machine-readable format is required and, in such cases, which machine-readable format is to be used.
For the purposes of point (c), ESMA shall assess the advantages and disadvantages of different machine-readable formats and conduct appropriate field tests for that purpose.
ESMA shall submit those draft implementing technical standards to the Commission.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph of this paragraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
CHAPTER III
Cooperation with third countries
Article 88
Exchange of information with third countries
Transfer of personal data to a third country by a Member State shall be in accordance with Chapter IV of Directive 95/46/EC.
Transfers of personal data to a third country by ESMA shall be in accordance with Article 9 of Regulation (EU) No 45/2001.
Member States and ESMA may also conclude cooperation agreements providing for the exchange of information with third country authorities, bodies and natural or legal persons responsible for one or more of the following:
the supervision of credit institutions, other financial institutions, insurance undertakings and the supervision of financial markets;
the liquidation and bankruptcy of investment firms and other similar procedures;
the carrying out of statutory audits of the accounts of investment firms and other financial institutions, credit institutions and insurance undertakings, in the performance of their supervisory functions, or which administer compensation schemes, in the performance of their functions;
oversight of the bodies involved in the liquidation and bankruptcy of investment firms and other similar procedures;
oversight of persons charged with carrying out statutory audits of the accounts of insurance undertakings, credit institutions, investment firms and other financial institutions;
oversight of persons active on emission allowance markets for the purpose of ensuring a consolidated overview of financial and spot markets;
oversight of persons active on agricultural commodity derivatives markets for the purpose of ensuring a consolidated overview of financial and spot markets.
The cooperation agreements referred to in the third subparagraph may be concluded only where the information disclosed is subject to guarantees of professional secrecy at least equivalent to those required under Article 76. Such exchange of information shall be intended for the performance of the tasks of those authorities or bodies or natural or legal persons. Where a cooperation agreement involves the transfer of personal data by a Member State, it shall comply with Chapter IV of Directive 95/46/EC and with Regulation (EC) No 45/2001 in the case ESMA is involved in the transfer.
TITLE VII
DELEGATED ACTS
Article 89
Exercise of the delegation
Article 89a
Committee procedure
FINAL PROVISIONS
Article 90
Reports and review
Before ►M3 3 March 2020 ◄ the Commission shall, after consulting ESMA, present a report to the European Parliament and the Council on:
the functioning of OTFs, including their specific use of matched principal trading, taking into account supervisory experience acquired by competent authorities, the number of OTFs authorised in the Union and their market share and in particular examining whether any adjustments are needed to the definition of an OTF and whether the range of financial instruments covered by the OTF category remains appropriate;
the functioning of the regime for SME growth markets, taking into account the number of MTFs registered as SME growth markets, numbers of issuers present thereon, and relevant trading volumes;
In particular, the report shall assess whether the threshold in point (a) of Article 33(3) remains an appropriate minimum to pursue the objectives for SME growth markets as stated in this Directive;
the impact of requirements regarding algorithmic trading including high-frequency algorithmic trading;
the experience with the mechanism for banning certain products or practices, taking into account the number of times the mechanisms have been triggered and their effects;
the application of the administrative and criminal sanctions and in particular the need to further harmonise the administrative sanctions set out for the infringement of the requirements set out in this Directive and in Regulation (EU) No 600/2014;
the impact of the application of position limits and position management on liquidity, market abuse and orderly pricing and settlement conditions in commodity derivatives markets;
the development in prices for pre and post trade transparency data from regulated markets, MTFs, OTFs and APAs;
the impact of the requirement to disclose any fees, commissions and non-monetary benefits in connection with the provision of an investment service or an ancillary service to the client in accordance with Article 24(9), including its impact on the proper functioning of the internal market on cross-border investment advice.
▼M6 —————
If the Commission considers that it would not be feasible and beneficial to include those contracts, it shall submit, if appropriate, a legislative proposal to the European Parliament and the Council. The Commission shall be empowered to adopt delegated acts in accordance with Article 89 of this Directive to extend the 42-month period referred to in Article 95(1) of this Directive once by two years and a further time by one year.
The Commission shall, after consulting ESMA, the EBA and ACER, submit reports to the European Parliament and to the Council containing a comprehensive assessment of the markets for commodity derivatives, for emission allowances and for derivatives of emission allowances. Those reports shall assess at least for each of the following elements their contribution to the liquidity and proper functioning of Union markets for commodity derivatives, for emission allowances or for derivatives of emission allowances:
the regimes for the position limits and the position management controls, on the basis of data provided by competent authorities to ESMA in accordance with Article 57(5) and (10);
the elements referred to in Article 2(4), second and third subparagraphs, of this Directive and the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level pursuant to Commission Delegated Regulation (EU) 2021/1833 ( 17 ), taking into account the ability of persons as referred to in Article 2(1), point (j), of this Directive to enter into transactions for effectively reducing risks directly relating to the commercial activity or treasury financing activity, the application of requirements from 26 June 2026 for investment firms specialised in commodity derivatives or emission allowances or derivatives thereof as set out in Regulation (EU) 2019/2033 and requirements for financial counterparties laid down in Regulation (EU) No 648/2012;
for transactions in markets for commodity derivatives or for derivatives of emission allowances, the key elements to obtain harmonised data, the collection of transaction data by a single collecting entity, and the relevant information on and most appropriate format for transaction data to be made public.
The Commission shall submit:
Those reports shall, where appropriate, be accompanied by a legislative proposal concerning targeted changes to the market rules for commodity derivatives, emission allowances or derivatives of emission allowances framework.
▼M2 —————
Article 92
Amendments to Directive 2011/61/EU
Directive 2011/61/EU is amended as follows:
in point (r) of Article 4(1), the following point is added:
a Member State, other than the home Member State, in which an EU AIFM provides the services referred to in Article 6(4);’;
Article 33 is amended as follows:
the title is replaced by the following:
‘Conditions for managing EU AIFs established in other Member States and for providing services in other Member States’;
paragraphs 1 and 2 are replaced by the following:
Member States shall ensure that an authorised EU AIFM may, directly or by establishing a branch:
manage EU AIFs established in another Member State, provided that the AIFM is authorised to manage that type of AIF;
provide in another Member State the services referred to in Article 6(4) for which it has been authorised.
An AIFM intending to provide the activities and services referred to in paragraph 1 for the first time shall communicate the following information to the competent authorities of its home Member State:
the Member State in which it intends to manage AIFs directly or to establish a branch, and/or to provide the services referred to in Article 6(4);
a programme of operations stating in particular the services which it intends to perform and/or identifying the AIFs that it intends to manage.’.
Article 93
Transposition
Member States shall apply those measures from 3 January 2018.
When Member States adopt those measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made. They shall also include a statement that references in existing laws, regulations and administrative provisions to the directives repealed by this Directive shall be construed as references to this Directive. Member States shall determine how such reference is to be made and how that statement is to be formulated.
By way of derogation from the first subparagraph, Member States that cannot adopt provisions necessary to comply with point (15) of Article 4(1) by 23 March 2023, because their legislative procedures take more than nine months, shall benefit from an extension of a maximum of six months from 23 March 2023, provided that they notify the Commission of their need to make use of that extension by 23 March 2023.
Article 94
Repeal
Directive 2004/39/EC, as amended by the acts listed in Annex III, Part A of this Directive, is repealed with effect from ►M3 3 January 2018 ◄ , without prejudice to the obligations of the Member States relating to the time-limits for transposition into national law of the Directives set out in Annex III, Part B of this Directive.
References to Directive 2004/39/EC or to Directive 93/22/EEC shall be construed as references to this Directive or to Regulation (EU) No 600/2014 and shall be read in accordance with the correlation table set out in Annex IV of this Directive.
References to terms defined in, or Articles of, Directive 2004/39/EC or Directive 93/22/EEC shall be construed as references to the equivalent term defined in, or Article of, this Directive.
Article 95
Transitional provisions
Until ►M3 3 January 2021 ◄ :
the clearing obligation set out in Article 4 of Regulation (EU) No 648/2012 and the risk mitigation techniques set out in Article 11(3) thereof shall not apply to C6 energy derivative contracts entered into by non-financial counterparties that meet the conditions in Article 10(1) of Regulation (EU) No 648/2012 or by non-financial counterparties that shall be authorised for the first time as investment firms as from ►M3 3 January 2018 ◄ ; and
such C6 energy derivative contracts shall not be considered to be OTC derivative contracts for the purposes of the clearing threshold set out in Article 10 of Regulation (EU) No 648/2012.
C6 energy derivative contracts benefiting from the transitional regime set out in the first subparagraph shall be subject to all other requirements laid down in Regulation (EU) No 648/2012.
Article 95a
Transitional provision on the authorisation of credit institution referred to in point (1)(b) of Article 4(1) of Regulation (EU) No 575/2013
Competent authorities shall inform the competent authority referred to in Article 8 of Directive 2013/36/EU where the envisaged total assets of an undertaking which has applied for authorisation pursuant to Title II of this Directive before 25 December 2019 in order to carry out the activities referred to in points (3) and (6) of Section A of Annex I are equal to or exceed EUR 30 billion, and notify the applicant thereof.
Article 96
Entry into force
This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
Article 97
Addressees
This Directive is addressed to the Member States.
ANNEX I
LISTS OF SERVICES AND ACTIVITIES AND FINANCIAL INSTRUMENTS
SECTION A
Investment services and activities
Reception and transmission of orders in relation to one or more financial instruments;
Execution of orders on behalf of clients;
Dealing on own account;
Portfolio management;
Investment advice;
Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
Placing of financial instruments without a firm commitment basis;
Operation of an MTF;
Operation of an OTF.
SECTION B
Ancillary services
Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management and excluding providing and maintaining securities accounts at the top tier level (‘central maintenance service’) referred to in point (2) of Section A of the Annex to the Regulation (EU) No 909/2014;
Granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction;
Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings;
Foreign exchange services where these are connected to the provision of investment services;
Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments;
Services related to underwriting.
Investment services and activities as well as ancillary services of the type included under Section A or B of Annex 1 related to the underlying of the derivatives included under points (5), (6), (7) and (10) of Section C where these are connected to the provision of investment or ancillary services.
SECTION C
Financial instruments
Transferable securities;
Money-market instruments;
Units in collective investment undertakings;
Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, emission allowances or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash;
Options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;
Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, a MTF, or an OTF, except for wholesale energy products traded on an OTF that must be physically settled;
Options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in point 6 of this Section and not being for commercial purposes, which have the characteristics of other derivative financial instruments;
Derivative instruments for the transfer of credit risk;
Financial contracts for differences;
Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, OTF, or an MTF;
Emission allowances consisting of any units recognised for compliance with the requirements of Directive 2003/87/EC (Emissions Trading Scheme).
▼M6 —————
ANNEX II
PROFESSIONAL CLIENTS FOR THE PURPOSE OF THIS DIRECTIVE
Professional client is a client who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs. In order to be considered to be professional client, the client must comply with the following criteria:
I. CATEGORIES OF CLIENT WHO ARE CONSIDERED TO BE PROFESSIONALS
The following shall all be regarded as professionals in all investment services and activities and financial instruments for the purposes of the Directive.
Entities which are required to be authorised or regulated to operate in the financial markets. The list below shall be understood as including all authorised entities carrying out the characteristic activities of the entities mentioned: entities authorised by a Member State under a Directive, entities authorised or regulated by a Member State without reference to a Directive, and entities authorised or regulated by a third country:
Credit institutions;
Investment firms;
Other authorised or regulated financial institutions;
Insurance companies;
Collective investment schemes and management companies of such schemes;
Pension funds and management companies of such funds;
Commodity and commodity derivatives dealers;
Locals;
Other institutional investors;
Large undertakings meeting two of the following size requirements on a company basis:
|
— |
balance sheet total : EUR 20 000 000 |
|
— |
net turnover : EUR 40 000 000 |
|
— |
own funds : EUR 2 000 000 |
National and regional governments, including public bodies that manage public debt at national or regional level, Central Banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the EIB and other similar international organisations.
Other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to the securitisation of assets or other financing transactions.
The entities referred to above are considered to be professionals. They must however be allowed to request non-professional treatment and investment firms may agree to provide a higher level of protection. Where the client of an investment firm is an undertaking referred to above, the investment firm must inform it prior to any provision of services that, on the basis of the information available to the investment firm, the client is deemed to be a professional client, and will be treated as such unless the investment firm and the client agree otherwise. The investment firm must also inform the customer that he can request a variation of the terms of the agreement in order to secure a higher degree of protection.
It is the responsibility of the client, considered to be a professional client, to ask for a higher level of protection when it deems it is unable to properly assess or manage the risks involved.
This higher level of protection will be provided when a client who is considered to be a professional enters into a written agreement with the investment firm to the effect that it shall not be treated as a professional for the purposes of the applicable conduct of business regime. Such agreement shall specify whether this applies to one or more particular services or transactions, or to one or more types of product or transaction.
II. CLIENTS WHO MAY BE TREATED AS PROFESSIONALS ON REQUEST
II.1. Identification criteria
Clients other than those mentioned in section I, including public sector bodies, local public authorities, municipalities and private individual investors, may also be allowed to waive some of the protections afforded by the conduct of business rules.
Investment firms shall therefore be allowed to treat any of those clients as professionals provided the relevant criteria and procedure mentioned below are fulfilled. Those clients shall not, however, be presumed to possess market knowledge and experience comparable to that of the categories listed in Section I.
Any such waiver of the protection afforded by the standard conduct of business regime shall be considered to be valid only if an adequate assessment of the expertise, experience and knowledge of the client, undertaken by the investment firm, gives reasonable assurance, in light of the nature of the transactions or services envisaged, that the client is capable of making investment decisions and understanding the risks involved.
The fitness test applied to managers and directors of entities licensed under Directives in the financial field could be regarded as an example of the assessment of expertise and knowledge. In the case of small entities, the person subject to that assessment shall be the person authorised to carry out transactions on behalf of the entity.
In the course of that assessment, as a minimum, two of the following criteria shall be satisfied:
Member States may adopt specific criteria for the assessment of the expertise and knowledge of municipalities and local public authorities requesting to be treated as professional clients. Those criteria can be alternative or additional to those listed in the fifth paragraph.
II.2. Procedure
Those clients may waive the benefit of the detailed rules of conduct only where the following procedure is followed:
Before deciding to accept any request for waiver, investment firms must be required to take all reasonable steps to ensure that the client requesting to be treated as a professional client meets the relevant requirements stated in Section II.1.
However, if clients have already been categorised as professionals under parameters and procedures similar to those referred to above, it is not intended that their relationships with investment firms shall be affected by any new rules adopted pursuant to this Annex.
Firms must implement appropriate written internal policies and procedures to categorise clients. Professional clients are responsible for keeping the investment firm informed about any change, which could affect their current categorisation. Should the investment firm become aware however that the client no longer fulfils the initial conditions, which made him eligible for a professional treatment, the investment firm shall take appropriate action.
ANNEX III
PART A
Repealed Directive with list of its successive amendments
(referred to in Article 94)
Directive 2004/39/EC of the European Parliament and of the Council (OJ L 145, 30.4.2004, p. 1).
Directive 2006/31/EC of the European Parliament and of the Council (OJ L 114, 27.4.2006, p. 60).
Directive 2007/44/EC of the European Parliament and of the Council (OJ L 247, 21.9.2007, p. 1).
Directive 2008/10/EC of the European Parliament and of the Council (OJ L 76, 19.3.2008, p. 33).
Directive 2010/78/EC of the European Parliament and of the Council (OJ L 331, 15.12.2010, p. 120).
PART B
List of time-limits for transposition into national law
(referred to in Article 94)
Directive 2004/39/EC
|
Transposition period |
31 January 2007 |
|
Implementation period |
1 November 2007 |
Directive 2006/31/EC
|
Transposition period |
31 January 2007 |
|
Implementation period |
1 November 2007 |
Directive 2007/44/EC
|
Transposition period |
21 March 2009 |
Directive 2010/78/EC
|
Transposition period |
31 December 2011 |
ANNEX IV
Correlation table referred in Article 94
|
Directive 2004/39/EC |
Directive 2014/65/EU |
Regulation (EU) No 600/2014 |
|
Article 1(1) |
Article 1(1) |
|
|
Article 1(2) |
Article 1(3) |
|
|
Article 2(1)(a) |
Article 2(1)(a) |
|
|
Article 2(1)(b) |
Article 2(1)(b) |
|
|
Article 2(1)(c) |
Article 2(1)(c) |
|
|
Article 2(1)(d) |
Article 2(1)(d) |
|
|
Article 2(1)(e) |
Article 2(1)(f) |
|
|
Article 2(1)(f) |
Article 2(1)(g) |
|
|
Article 2(1)(g) |
Article 2(1)(h) |
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|
Article 2(1)(h) |
Article 2(1)(i) |
|
|
Article 2(1)(i) |
Article 2(1)(j) |
|
|
Article 2(1)(j) |
Article 2(1)(k) |
|
|
Article 2(1)(k) |
Article 2(1)(i) |
|
|
Article 2(1)(l) |
— |
|
|
Article 2(1)(m) |
Article 2(1)(l) |
|
|
Article 2(1)(n) |
Article 2(1)(m) |
|
|
Article 2(2) |
Article 2(2) |
|
|
Article 2(3) |
Article 2(4) |
|
|
Article 3(1) |
Article 3(1) |
|
|
Article 3(2) |
Article 3(3) |
|
|
Article 4(1)(1) |
Article 4(1)(1) |
|
|
Article 4(1)(2) |
Article 4(1)(2) |
|
|
Article 4(1)(3) |
Article 4(1)(3) |
|
|
Article 4(1)(4) |
Article 4(1)(4) |
|
|
Article 4(1)(5) |
Article 4(1)(5) |
|
|
Article 4(1)(6) |
Article 4(1)(6) |
|
|
Article 4(1)(7) |
Article 4(1)(20) |
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|
Article 4(1)(8) |
Article 4(1)(7) |
|
|
Article 4(1)(9) |
Article 4(1)(8) |
|
|
Article 4(1)(10) |
Article 4(1)(9) |
|
|
Article 4(1)(11) |
Article 4(1)(10) |
|
|
Article 4(1)(12) |
Article 4(1)(11) |
|
|
Article 4(1)(13) |
Article 4(1)(18) |
|
|
Article 4(1)(14) |
Article 4(1)(21) |
|
|
Article 4(1)(15) |
Article 4(1)(22) |
|
|
Article 4(1)(16) |
Article 4(1)(14) |
|
|
Article 4(1)(17) |
Article 4(1)(15) |
|
|
Article 4(1)(18) |
Article 4(1)(44) |
|
|
Article 4(1)(19) |
Article 4(1)(17) |
|
|
Article 4(1)(20) |
Article 4(1)(55) |
|
|
Article 4(1)(21) |
Article 4(1)(56) |
|
|
Article 4(1)(22) |
Article 4(1)(26) |
|
|
Article 4(1)(23) |
Article 4(1)(27) |
|
|
Article 4(1)(24) |
Article 4(1)(28) |
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|
Article 4(1)(25) |
Article 4(1)(29) |
|
|
Article 4(1)(26) |
Article 4(1)(30) |
|
|
Article 4(1)(27) |
Article 4(1)(31) |
|
|
Article 4(1)(28) |
Article 4(1)(32) |
|
|
Article 4(1)(29) |
Article 4(1)(33) |
|
|
Article 4(1)(30) |
Article 4(1)(35)(b) |
|
|
Article 4(1)(31) |
Article 4(1)(35) |
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|
Article 4(2) |
Article 4(2) |
|
|
Article 5(1) |
Article 5(1) |
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|
Article 5(2) |
Article 5(2) |
|
|
Article 5(3) |
Article 5(3) |
|
|
Article 5(4) |
Article 5(4) |
|
|
Article 5(5) |
— |
|
|
Article 6(1) |
Article 6(1) |
|
|
Article 6(2) |
Article 6(2) |
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|
Article 6(3) |
Article 6(3) |
|
|
Article 7(1) |
Article 7(1) |
|
|
Article 7(2) |
Article 7(2) |
|
|
Article 7(3) |
Article 7(3) |
|
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Article 7(4) |
Article 7(4) and (5) |
|
|
Article 8(a) |
Article 8(a) |
|
|
Article 8(b) |
Article 8(b) |
|
|
Article 8(c) |
Article 8(c) |
|
|
Article 8(d) |
Article 8(d) |
|
|
Article 8(e) |
Article 8(e) |
|
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Article 9(1) |
Article 9(1) and (3) |
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|
Article 9(2) |
Article 9(5) |
|
|
Article 9(3) |
Article 9(4) |
|
|
Article 9(4) |
Article 9(6) |
|
|
Article 10(1) |
Article 10(1) |
|
|
Article 10(2) |
Article 10(2) |
|
|
Article 10(3) |
Article 11(1) |
|
|
Article 10(4) |
Article 11(2) |
|
|
Article 10(5) |
Article 11(3) |
|
|
Article 10(6) |
Article 10(3), 11(4) |
|
|
Article 10a(1) |
Article 12(1) |
|
|
Article 10a(2) |
Article 12(2) |
|
|
Article 10a(3) |
Article 12(3) |
|
|
Article 10a(4) |
Article 12(4) |
|
|
Article 10a(5) |
Article 12(5) |
|
|
Article 10a(6) |
Article 12(6) |
|
|
Article 10a(7) |
Article 12(7) |
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|
Article 10a(8) |
Article 12(8) and (9) |
|
|
Article 10b(1) |
Article 13(1) |
|
|
Article 10b(2) |
Article 13(2) |
|
|
Article 10b(3) |
Article 13(3) |
|
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Article 10b(4) |
Article 13(4) |
|
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Article 10b(5) |
Article 13(5) |
|
|
Article 11 |
Article 14 |
|
|
Article 12 |
Article 15 |
|
|
Article 13(1) |
Article 16(1) |
|
|
Article 13(2) |
Article 16(2) |
|
|
Article 13(3) |
Article 16(3) |
|
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Article 13(4) |
Article 16(4) |
|
|
Article 13(5) |
Article 16(5) |
|
|
Article 13(6) |
Article 16(6) |
|
|
Article 13(7) |
Article 16(8) |
|
|
Article 13(8) |
Article 16(9) |
|
|
Article 13(9) |
Article 16(11) |
|
|
Article 13(10) |
Article 16(12) |
|
|
Article 14(1) |
Article 18(1), Article 19(1) |
|
|
Article 14(2) |
Article 18(2) |
|
|
Article 14(3) |
Article 19(4) |
|
|
Article 14(4) |
Article 18(3), Article 19(2) |
|
|
Article 14(5) |
Article 18(6), Article 19(3) |
|
|
Article 14(6) |
Article 18(8) |
|
|
Article 14(7) |
Article 18(9) |
|
|
Article 15 |
— |
|
|
Article 16(1) |
Article 21(1) |
|
|
Article 16(2) |
Article 21(2) |
|
|
Article 16(3) |
— |
|
|
Article 17(1) |
Article 22 |
|
|
Article 17(2) |
— |
|
|
Article 18(1) |
Article 23(1) |
|
|
Article 18(2) |
Article 23(2) |
|
|
Article 18(3) |
Article 23(4) |
|
|
Article 19(1) |
Article 24(1) |
|
|
Article 19(2) |
Article 24(3) |
|
|
Article 19(3) |
Article 24(4) |
|
|
Article 19(4) |
Article 25(2) |
|
|
Article 19(5) |
Article 25(3) |
|
|
Article 19(6) |
Article 25(4) |
|
|
Article 19(7) |
Article 25(5) |
|
|
Article 19(8) |
Article 25(6) |
|
|
Article 19(9) |
Article 24(6), Article 25(7) |
|
|
Article 19(10) |
Article 24(13), Article 24(14), Article 25(8) |
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Article 20 |
Article 26 |
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Article 21(1) |
Article 27(1) |
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Article 21(2) |
Article 27(4) |
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Article 21(3) |
Article 27(5) |
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Article 21(4) |
Article 27(7) |
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Article 21(5) |
Article 27(8) |
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Article 21(6) |
Article 27(9) |
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Article 22(1) |
Article 28(1) |
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Article 22(2) |
Article 28(2) |
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Article 22(3) |
Article 28(3) |
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Article 23(1) |
Article 29(1) |
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Article 23(2) |
Article 29(2) |
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Article 23(3) |
Article 29(3) |
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Article 23(4) |
Article 29(4) |
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Article 23(5) |
Article 29(5) |
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Article 23(6) |
Article 29(6) |
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Article 24(1) |
Article 30(1) |
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Article 24(2) |
Article 30(2) |
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Article 24(3) |
Article 30(3) |
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Article 24(4) |
Article 30(4) |
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Article 24(5) |
Article 30(5) |
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Article 25(1) |
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Article 24 |
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Article 25(2) |
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Article 25(1) |
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Article 25(3) |
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Article 26(1) and (2) |
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Article 25(4) |
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Article 26(3) |
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Article 25(5) |
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Article 26(7) |
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Article 25(6) |
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Article 26(8) |
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Article 25(7) |
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Article 26(9) |
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Article 26(1) |
Article 31(1) |
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Article 26(2) |
Article 31(2) and (3) |
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Article 27(1) |
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Article 14(1) to (5) |
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Article 27(2) |
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Article 14(6) |
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Article 27(3) |
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Article 15(1) to (4) |
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Article 27(4) |
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Article 16 |
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Article 27(5) |
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Article 17(1) |
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Article 27(6) |
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Article 17(2) |
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Article 27(7) |
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Article 17(3) |
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Article 28(1) |
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Article 20(1) |
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Article 28(2) |
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Article 20(2) |
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Article 28(3) |
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Article 20(3) |
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Article 29(1) |
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Article 3(1), (2) and (3) |
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Article 29(2) |
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Article 4(1), (2) and (3) |
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Article 29(3) |
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Article 4(6) |
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Article 30(1) |
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Article 6(1) and (2) |
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Article 30(2) |
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Article 7(1) |
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Article 30(3) |
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Article 7(2) |
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Article 31(1) |
Article 34(1) |
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Article 31(2) |
Article 34(2) |
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Article 31(3) |
Article 34(3) |
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Article 31(4) |
Article 34(4) |
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Article 31(5) |
Article 34(6) |
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Article 31(6) |
Article 34(7) |
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Article 31(7) |
Article 34(8) and (9) |
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Article 32(1) |
Article 35(1) |
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Article 32(2) |
Article 35(2) |
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Article 32(3) |
Article 35(3) |
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Article 32(4) |
Article 35(4) |
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Article 32(5) |
Article 35(5) |
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Article 32(6) |
Article 35(6) |
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Article 32(7) |
Article 35(8) |
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Article 32(8) |
Article 35(9) |
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Article 32(9) |
Article 35(10) |
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Article 32(10) |
Article 35(11) and (12) |
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Article 33(1) |
Article 36(1) |
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Article 33(2) |
Article 36(2) |
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Article 34(1) |
Article 37(1) |
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Article 34(2) |
Article 37(2) |
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Article 34(3) |
— |
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Article 35(1) |
Article 38(1) |
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Article 35(2) |
Article 38(2) |
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Article 36(1) |
Article 44(1) |
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Article 36(2) |
Article 44(2) |
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Article 36(3) |
Article 44(3) |
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Article 36(4) |
Article 44(4) |
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Article 36(5) |
Article 44(5) |
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Article 36(6) |
Article 44(6) |
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Article 37(1) |
Article 45(1) and (8) |
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Article 37(2) |
Article 45(7) second subparagraph |
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Article 38(1) |
Article 46(1) |
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Article 38(2) |
Article 46(2) |
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Article 38(3) |
Article 46(3) |
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Article 39 |
Article 47(1) |
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Article 40(1) |
Article 51(1) |
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Article 40(2) |
Article 51(2) |
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Article 40(3) |
Article 51(3) |
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Article 40(4) |
Article 51(4) |
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Article 40(5) |
Article 51(5) |
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Article 40(6) |
Article 51(6) |
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Article 41(1) |
Article 52(1) |
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Article 41(2) |
Article 52(2) |
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Article 42(1) |
Article 53(1) |
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Article 42(2) |
Article 53(2) |
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Article 42(3) |
Article 53(3) |
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Article 42(4) |
Article 53(4) |
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Article 42(5) |
Article 53(5) |
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Article 42(6) |
Article 53(6) |
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Article 42(7) |
Article 53(7) |
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Article 43(1) |
Article 54(1) |
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Article 43(2) |
Article 54(2) and (3) |
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Article 44(1) |
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Article 3(1), (2) and (3) |
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Article 44(2) |
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Article 4(1), (2) and (3) |
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Article 44(3) |
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Article 4(6) |
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Article 45(1) |
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Article 6(1) and (2) |
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Article 45(2) |
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Article 7(1) |
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Article 45(3) |
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Article 7(2) |
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Article 46(1) |
Article 55(1) |
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Article 46(2) |
Article 55(2) |
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Article 47 |
Article 56 |
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Article 48(1) |
Article 67(1) |
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Article 48(2) |
Article 67(2) |
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Article 48(3) |
Article 67(3) |
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Article 49 |
Article 68 |
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Article 50(1) |
Article 69(1), 72(1) |
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Article 50(2) |
Article 69(2) |
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Article 51(1) |
Article 70(1) and (2) |
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Article 51(2) |
Article 70(5) |
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Article 51(3) |
Article 71(1) |
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Article 51(4) |
Article 71(4) |
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Article 51(5) |
Article 71(5) |
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Article 51(6) |
Article 71(6) |
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Article 52(1) |
Article 74(1) |
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Article 52(2) |
Article 74(2) |
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Article 53(1) |
Article 75(1) |
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Article 53(2) |
Article 75(2) |
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Article 53(3) |
Article 75(3) |
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Article 54(1) |
Article 76(1) |
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Article 54(2) |
Article 76(2) |
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Article 54(3) |
Article 76(3) |
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Article 54(4) |
Article 76(4) |
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Article 54(5) |
Article 76(5) |
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Article 55(1) |
Article 77(1) |
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Article 55(2) |
Article 77(2) |
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Article 56(1) |
Article 79(1) |
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Article 56(2) |
Article 79(2) |
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Article 56(3) |
Article 79(3) |
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Article 56(4) |
Article 79(4) |
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Article 56(5) |
Article 79(8) |
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Article 56(6) |
Article 79(9) |
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Article 57(1) |
Article 80(1) |
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Article 57(2) |
Article 80(2) |
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Article 57(3) |
Article 80(3) and (4) |
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Article 58(1) |
Article 81(1) |
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Article 58(2) |
Article 81(2) |
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Article 58(3) |
Article 81(3) |
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Article 58(4) |
Article 81(4) |
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Article 58(5) |
Article 81(5) |
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Article 58a |
Article 82 |
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Article 59 |
Article 83 |
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Article 60(1) |
Article 84(1) |
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Article 60(2) |
Article 84(2) |
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Article 60(3) |
Article 84(3) |
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Article 60(4) |
Article 84(4) |
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Article 61(1) |
Article 85(1) |
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Article 61(2) |
Article 85(2) |
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Article 62(1) |
Article 86(1) |
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Article 62(2) |
Article 86(2) |
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Article 62(3) |
Article 86(3) |
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Article 62(4) |
Article 86(4) |
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Article 62a(1) |
Article 87(1) |
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Article 62a(2) |
Article 87(2) |
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Article 63(1) |
Article 88(1) |
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Article 63(2) |
Article 88(2) |
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Article 64 |
— |
— |
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Article 64a |
— |
— |
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Article 65 |
— |
— |
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Article 66 |
— |
— |
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Article 67 |
— |
— |
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Article 68 |
— |
— |
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Article 69 |
— |
— |
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Article 70 |
— |
— |
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Article 71 |
— |
— |
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Article 72 |
— |
— |
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Article 73 |
— |
— |
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Annex I |
Annex I |
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Annex II |
Annex II |
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( 1 ) Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (OJ L 257, 28.8.2014, p. 1).
( 2 ) Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 (OJ L 347, 20.10.2020, p. 1).
( 3 ) Directive 2012/30/EU of the European Parliament and of the Council of 25 October 2012 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 54 of the Treaty on the Functioning of the European Union, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (OJ L 315, 14.11.2012, p. 74).
( 4 ) Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32).
( 5 ) Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004, p. 38).
( 6 ) Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).
( 7 ) Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (see page 149 of this Official Journal).
( 8 ) Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ L 347, 20.12.2013, p. 671).
( 9 ) Regulation (EU) No 1379/2013 of the European Parliament and of the Council of 11 December 2013 on the common organisation of the markets in fishery and aquaculture products, amending Council Regulations (EC) No 1184/2006 and (EC) No 1224/2009 and repealing Council Regulation (EC) No 104/2000 (OJ L 354, 28.12.2013, p. 1).
( 10 ) Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ L 314, 5.12.2019, p. 1).
( 11 ) Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (OJ L 314, 5.12.2019, p. 64).
( 12 ) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 (OJ L 60, 28.2.2014, p. 34).
►M6 ( 13 ) Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (OJ L 157, 9.6.2006, p. 87). ◄
( 14 ) Regulation (EU) 2023/2859 of the European Parliament and of the Council of 13 December 2023 establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability (OL L, 2023/2859, 20.12.2023, ELI: http://data.europa.eu/eli/reg/2023/2859/oj).
( 15 ) Commission Decision 2001/528/EC of 6 June 2001 establishing the European Securities Committee (OJ L 191, 13.7.2001, p. 45).
( 16 ) Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).
( 17 ) Commission Delegated Regulation (EU) 2021/1833 of 14 July 2021 supplementing Directive 2014/65/EU of the European Parliament and of the Council by specifying the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level (OJ L 372, 20.10.2021, p. 1).