Article 1Subject matter
This Regulation lays down rules on the content and the format of information to be published by investment firms on an annual basis in relation to client orders executed on trading venues, systematic internalisers, market makers or other liquidity providers or entities that perform a similar function to those performed by any of the foregoing in a third country.
Article 2Definitions
For the purposes of this Regulation, the following definitions shall apply:
- (a)
‘passive order’ means an order entered into the order book that provided liquidity;
- (b)
‘aggressive order’ means an order entered into the order book that took liquidity;
- (c)
‘directed order’ means an order where a specific execution venue was specified by the client prior to the execution of the order.
Article 3Information on the top five execution venues and quality of execution obtained
1
Investment firms shall publish the top five execution venues in terms of trading volumes for all executed client orders per class of financial instruments referred to in Annex I. Information regarding retail clients shall be published in the format set out in Table 1 of Annex II and information regarding professional clients shall be published in the format set out in Table 2 of Annex II. The publication shall exclude orders in Securities Financing Transactions (SFTs) and shall contain the following information:
a
class of financial instruments;
b
venue name and identifier;
c
volume of client orders executed on that execution venue expressed as a percentage of total executed volume;
d
number of client orders executed on that execution venue expressed as a percentage of total executed orders;
e
percentage of the executed orders referred to in point (d) that were passive and aggressive orders;
f
percentage of orders referred to in point (d) that were directed orders;
g
confirmation of whether it has executed an average of less than one trade per business day in the previous year in that class of financial instruments.
2
Investment firms shall publish the top five execution venues in terms of trading volumes for all executed client orders in SFTs for class of financial instruments referred to in Annex I in the format set out in Table 3 of Annex II. The publication shall contain the following information:
a
volume of client orders executed on that execution venue expressed as a percentage of total executed volume;
b
number of client orders executed on that execution venue expressed as a percentage of total executed orders;
c
confirmation of whether the investment firm has executed an average of less than one trade per business day in the previous year in that class of financial instruments.
3
Investment firms shall publish for each class of financial instruments, a summary of the analysis and conclusions they draw from their detailed monitoring of the quality of execution obtained on the execution venues where they executed all client orders in the previous year. The information shall include:
a
an explanation of the relative importance the firm gave to the execution factors of price, costs, speed, likelihood of execution or any other consideration including qualitative factors when assessing the quality of execution;
b
a description of any close links, conflicts of interests, and common ownerships with respect to any execution venues used to execute orders;
c
a description of any specific arrangements with any execution venues regarding payments made or received, discounts, rebates or non-monetary benefits received;
d
an explanation of the factors that led to a change in the list of execution venues listed in the firm's execution policy, if such a change occurred;
e
an explanation of how order execution differs according to client categorisation, where the firm treats categories of clients differently and where it may affect the order execution arrangements;
f
an explanation of whether other criteria were given precedence over immediate price and cost when executing retail client orders and how these other criteria were instrumental in delivering the best possible result in terms of the total consideration to the client;
g
an explanation of how the investment firm has used any data or tools relating to the quality of execution, including any data published under Delegated Regulation (EU) 2017/575;
h
where applicable, an explanation of how the investment firm has used output of a consolidated tape provider established under Article 65 of Directive 2014/65/EU.
Article 4Format
Investment firms shall publish the information required in accordance with Article 3(1) and 3(2) on their websites, by filling in the templates set out in Annex II, in a machine-readable electronic format, available for downloading by the public and the information required in accordance with Article 3(3) shall be published on their websites in an electronic format available for downloading by the public.
Article 5Entry into force and application
This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
It shall apply from 3 January 2018.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 8 June 2016.
For the Commission
The President
Jean-Claude Juncker