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Commission Delegated Regulation (EU) 2017/565Show full title

Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (Text with EEA relevance)

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  1. Introductory Text

  2. CHAPTER I SCOPE AND DEFINITIONS

    1. Article A1.Application

    2. Article 1.Subject-matter and scope

    3. Article 2.Definitions

    4. Article 3.Conditions applying to the provision of information

    5. Article 4.Provision of investment service in an incidental manner ...

    6. Article 5.Wholesale energy products that must be physically settled ...

    7. Article 6.Energy derivative contracts relating to oil and coal and wholesale energy products ...

    8. Article 7.Other derivative financial instruments ...

    9. Article 8.Derivatives under paragraph 10 of Part 1 of Schedule 2 to the Regulated Activities Order ...

    10. Article 9.Investment advice ...

    11. Article 10.Characteristics of other derivative contracts relating to currencies

    12. Article 11.Money-market instruments ...

    13. Article 12.Systematic internalisers for shares, depositary receipts, ETFs, certificates and other similar financial instruments ...

    14. Article 13.Systematic internalisers for bonds ...

    15. Article 14.Systematic internalisers for structured finance products ...

    16. Article 15.Systematic internalisers for derivatives ...

    17. Article 16.Systematic internalisers for emission allowances ...

    18. Article 16ZA.Transitional period: data for calculations

    19. Article 16a. Participation in matching arrangements

    20. Article 17.Relevant assessment periods ...

    21. Article 18.Algorithmic trading ...

    22. Article 19.High frequency algorithmic trading technique ...

    23. Article 20.Direct electronic access ...

  3. CHAPTER II ORGANISATIONAL REQUIREMENTS

    1. SECTION 1 Organisation

      1. Article 21.General organisational requirements ...

      2. Article 22.Compliance ...

      3. Article 23.Risk management ...

      4. Article 24.Internal audit ...

      5. Article 25.Responsibility of senior management ...

      6. Article 26.Complaints handling ...

      7. Article 27.Remuneration policies and practices ...

      8. Article 28.Scope of personal transactions ...

      9. Article 29.Personal transactions ...

    2. SECTION 2 Outsourcing

      1. Article 30.Scope of critical and important operational functions (Article 16(2) and first subparagraph of Article 16(5) of Directive 2014/65/EU)

      2. Article 31.Outsourcing critical or important operational functions (Article 16(2) and of Article 16(5) first subparagraph of Directive 2014/65/EU)

      3. Article 32.Service providers located in third countries ...

    3. SECTION 3 Conflicts of interest

      1. Article 33.Conflicts of interest potentially detrimental to a client (Articles 16(3) and 23 of Directive 2014/65/EU)

      2. Article 34.Conflicts of interest policy (Articles 16(3) and 23 of Directive 2014/65/EU)

      3. Article 35.Record of services or activities giving rise to detrimental conflict of interest (Article 16(6) of Directive 2014/65/EU)

      4. Article 36.Investment research and marketing communications (Article 24(3) of Directive 2014/65/EU)

      5. Article 37.Additional organisational requirements in relation to investment research or marketing communications (Article 16(3) of Directive 2014/65/EU)

      6. Article 38.Additional general requirements in relation to underwriting or placing (Articles 16(3), 23 and 24 of Directive 2014/65/EU)

      7. Article 39.Additional requirements in relation to pricing of offerings in relation to issuance of financial instruments (Articles 16(3), 23 and 24 of Directive 2014/65/EU)

      8. Article 40.Additional requirements in relation to placing ...

      9. Article 41.Additional requirements in relation to advice, distribution and self-placement ...

      10. Article 42.Additional requirements in relation to lending or provision of credit in the context of underwriting or placement (Articles 16(3), 23 and 24 of Directive 2014/65/EU)

      11. Article 43.Record keeping in relation to underwriting or placing (Articles 16(3), 23 and 24 of Directive 2014/65/EU)

  4. CHAPTER III OPERATING CONDITIONS FOR INVESTMENT FIRMS

    1. SECTION 1 Information to clients and potential clients

      1. Article 44.Fair, clear and not misleading information requirements (Article 24(3) of Directive 2014/65/EU)

      2. Article 45.Information concerning client categorisation (Article 24(4) of Directive 2014/65/EU)

      3. Article 46.General requirements for information to clients ...

      4. Article 47.Information about the investment firm and its services for clients and potential clients (Article 24(4) of Directive 2014/65/EU)

      5. Article 48.Information about financial instruments ...

      6. Article 49.Information concerning safeguarding of client financial instruments or client funds (Article 24(4) of Directive 2014/65/EU)

      7. Article 50.Information on costs and associated charges ...

      8. Article 51.Information provided in relation to units in collective investment undertakings or PRIIPs ...

    2. SECTION 2 Investment advice

      1. Article 52.Information about investment advice (Article 24(4) of Directive 2014/65/EU)

      2. Article 53.Investment advice on an independent basis (Article 24(4) and 24(7) of Directive 2014/65/EU)

    3. SECTION 3 Assessment of suitability and appropriateness

      1. Article 54.Assessment of suitability and suitability reports ...

      2. Article 55.Provisions common to the assessment of suitability or appropriateness (Article 25(2) and 25(3) of Directive 2014/65/EU)

      3. Article 56.Assessment of appropriateness and related record-keeping obligations (Article 25(3) and 25(5) of Directive 2014/65/EU)

      4. Article 57.Provision of services in non-complex instruments ...

      5. Article 58.Retail and Professional Client agreements (Article 24(1) and 25(5) of Directive 2014/65/EU)

    4. SECTION 4 Reporting to clients

      1. Article 59.Reporting obligations in respect of execution of orders other than for portfolio management ...

      2. Article 60.Reporting obligations in respect of portfolio management ...

      3. Article 61.Reporting obligations in respect of eligible counterparties ...

      4. Article 62.Additional reporting obligations for portfolio management or contingent liability transactions ...

      5. Article 63.Statements of client financial instruments or client funds (Article 25(6) of Directive 2014/65/EU)

    5. SECTION 5 Best execution

      1. Article 64.Best execution criteria (Articles 27(1) and 24(1) of Directive 2014/65/EU)

      2. Article 65.Duty of investment firms carrying out portfolio management and reception and transmission of orders to act in the best interests of the client ...

      3. Article 66.Execution policy ...

    6. SECTION 6 Client order handling

      1. Article 67.General principles (Articles 28(1) and 24(1) of Directive 2014/65/EU)

      2. Article 68.Aggregation and allocation of orders (Articles 28(1) and 24(1) of Directive 2014/65/EU)

      3. Article 69.Aggregation and allocation of transactions for own account (Articles 28(1) and 24(1) of Directive 2014/65/EU)

      4. Article 70.Prompt fair and expeditious execution of client orders and publication of unexecuted client limit orders for shares traded on a trading venue ...

    7. SECTION 7 Eligible counterparties

      1. Article 71.Eligible counterparties ...

    8. SECTION 8 Record-keeping

      1. Article 72.Retention of records ...

      2. Article 73.Record keeping of rights and obligations of the investment firm and the client (Article 25(5) of Directive 2014/65/EU)

      3. Article 74.Record keeping of client orders and decision to deal (Article 16(6) of Directive 2014/65/EU)

      4. Article 75.Record keeping of transactions and order processing (Article 16(6) of Directive 2014/65/EU)

      5. Article 76.Recording of telephone conversations or electronic communications (Article 16(7) of Directive 2014/65/EU)

    9. SECTION 9 SME growth markets

      1. Article 77.Qualification as an SME ...

      2. Article 78.Registration as an SME growth market ...

      3. Article 79.Deregistration as an SME growth market ...

  5. CHAPTER IV OPERATING OBLIGATIONS FOR TRADING VENUES

    1. Article 80.Circumstances constituting significant damage to investors' interests and the orderly functioning of the market ...

    2. Article 81.Circumstances where significant infringements of the rules of a trading venue or disorderly trading conditions or system disruptions in relation to a financial instrument may be assumed (Articles 31(2) and 54(2) of Directive 2014/65/EU)

    3. Article 82.Circumstances where a conduct indicating behaviour that is prohibited under Regulation (EU) No 596/2014 may be assumed (Articles 31(2) and 54(2) of Directive 2014/65/EU)

  6. CHAPTER V POSITION REPORTING IN COMMODITY DERIVATIVES

    1. Article 83.Position reporting (Article 58(1) of Directive 2014/65/EU)

  7. CHAPTER VI DATA PROVISION OBLIGATIONS FOR DATA REPORTING SERVICE PROVIDERS

    1. Article 84.Obligation to provide market data on a reasonable commercial basis ...

    2. Article 85.Provision of market data on the basis of cost ...

    3. Article 86.Obligation to provide market data on a non-discriminatory basis ...

    4. Article 87.Per user fees ...

    5. Article 88.Unbundling and disaggregating market data ...

    6. Article 89.Transparency obligation ...

  8. CHAPTER VII COMPETENT AUTHORITIES AND FINAL PROVISIONS

    1. Article 90.Determination of the substantial importance of the operations of a trading venue in a host Member State(Article 79(2) of Directive 2014/65/EU)

  9. CHAPTER VIII FINAL PROVISIONS

    1. Article 91.Entry into force and application

  10. Signature

    1. ANNEX I

      Record-keeping

      1. Minimum list of records to be kept by investment firms...

    2. ANNEX II

      Costs and charges

      1. Identified costs that should form part of the costs to...

    3. ANNEX III

      Requirement for operators of trading venues to immediately inform their national competent authority

      1. SECTION A Signals that may indicate significant infringements of the rules of...

        1. Significant infringements of the rules of a trading venue

          1. 1. Market participants infringe rules of the trading venue which aim...

          2. 2. A trading venue considers that an infringement is of sufficient...

        2. Disorderly trading conditions

          1. 3. The price discovery process is interfered with over a significant...

          2. 4. The capacities of the trading systems are reached or exceeded;...

          3. 5. Market makers/liquidity providers repeatedly claim mis-trades; or

          4. 6. Breakdown or failure of critical mechanisms under paragraphs 3 to...

        3. System disruptions

          1. 7. Any major malfunction or breakdown of the system for market...

          2. 8. Any major malfunction or breakdown of the system for the...

          3. 9. Any major malfunction or breakdown of the systems for the...

          4. 10. Any major malfunction or breakdown of the systems of the...

      2. SECTION B Signals that may indicate abusive behaviour under Regulation (EU) No...

        1. Signals of possible insider dealing or market manipulation

          1. 1. Unusual concentration of transactions and/or orders to trade in a...

          2. 2. Unusual repetition of a transaction among a small number of...

        2. Signals of possible insider dealing

          1. 3. Unusual and significant trading or submission of orders to trade...

          2. 4. Whether orders to trade are given or transactions are undertaken...

        3. Signals of possible market manipulation

          1. 5. Orders to trade given or transactions undertaken which represent a...

          2. 6. Orders to trade given or transactions undertaken by a member/participant...

          3. 7. Orders to trade given or transactions undertaken which are concentrated...

          4. 8. Orders to trade given which change the representation of the...

          5. 9. Transactions or orders to trade by a market/participant with no...

          6. 10. Buying or selling of a financial instrument at the reference...

          7. 11. Transactions or orders to trade which have the effect of,...

          8. 12. Transactions or orders to trade which have the effect of,...

          9. 13. Execution of a transaction, changing the bid-offer prices when this...

          10. 14. Entering orders representing significant volumes in the central order book...

          11. 15. Engaging in a transaction or series of transactions which are...

          12. 16. Transactions carried out as a result of the entering of...

          13. 17. Transactions or orders to trade which have the effect of,...

          14. 18. Entering of orders to trade or a series of orders...

          15. 19. Submitting multiple or large orders to trade often away from...

          16. 20. Entry of small orders to trade in order to ascertain...

          17. 21. Entry of large numbers of orders to trade and/or cancellations...

          18. 22. Posting of orders to trade, to attract other market members/participants...

          19. 23. Executing orders to trade or a series of orders to...

          20. 24. The extent to which, to the best knowledge of the...

        4. Signals for cross-product market manipulation, including across different trading venues...

          1. 25. Transactions or orders to trade which have the effect of,...

          2. 26. Transactions or orders to trade which have the effect of,...

          3. 27. Transactions which have the effect of, or are likely to...

          4. 28. Transactions which have the effect of, or are likely to...

          5. 29. Orders to trade given or transactions undertaken by a member/participant...

          6. 30. Undertaking trading or entering orders to trade in one trading...

          7. 31. Creating or enhancing arbitrage possibilities between a financial instrument and...

    4. ANNEX IV

      1. SECTION 1 Record keeping of client orders and decision to deal

        1. 1. Name and designation of the client

        2. 2. Name and designation of any relevant person acting on behalf...

        3. 3. A designation to identify the trader (Trader ID) responsible within...

        4. 4. A designation to identify the algorithm (Algo ID) responsible within...

        5. 5. B/S indicator;

        6. 6. Instrument identification

        7. 7. Unit price and price notation;

        8. 8. Price

        9. 9. Price multiplier

        10. 10. Currency 1

        11. 11. Currency 2

        12. 12. Initial quantity and quantity notation;

        13. 13. Validity period

        14. 14. Type of the order;

        15. 15. Any other details, conditions and particular instructions from the client;...

        16. 16. The date and exact time of the receipt of the...

      2. SECTION 2 Record keeping of transactions and order processing

        1. 1. name and designation of the client;

        2. 2. name and designation of any relevant person acting on behalf...

        3. 3. a designation to identify the trader (Trader ID) responsible within...

        4. 4. a designation to identify the Algo (Ago ID) responsible within...

        5. 5. Transaction reference number

        6. 6. a designation to identify the order (Order ID)

        7. 7. the identification code of the order assigned by the trading...

        8. 8. a unique identification for each group of aggregated clients' orders...

        9. 9. the segment MIC code of the trading venue to which...

        10. 10. the name and other designation of the person to whom...

        11. 11. designation to identify the Seller & the Buyer

        12. 12. the trading capacity

        13. 13. a designation to identify the Trader (Trader ID) responsible for...

        14. 14. a designation to identify the Algo (Algo ID) responsible for...

        15. 15. B/S indicator;

        16. 16. instrument identification

        17. 17. ultimate underlying

        18. 18. Put/Call identifier

        19. 19. Strike price

        20. 20. Up-front payment

        21. 21. Delivery type

        22. 22. Option style

        23. 23. Maturity date

        24. 24. unit price and price notation;

        25. 25. price

        26. 26. price multiplier

        27. 27. Currency 1

        28. 28. Currency 2

        29. 29. remaining quantity

        30. 30. modified quantity

        31. 31. executed quantity

        32. 32. the date and exact time of submission of the order...

        33. 33. the date and exact time of any message that is...

        34. 34. the date and exact time any message that is transmitted...

        35. 35. Any message that is transmitted to and received from the...

        36. 36. Any other details and conditions that was submitted to and...

        37. 37. Each placed order's sequences in order to reflect the chronology...

        38. 38. Short selling flag

        39. 39. SSR exemption flag;

        40. 40. Waiver flag

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