Questions and Answers

[Pages:135]Questions and Answers

On MiFID II and MiFIR investor protection and intermediaries topics

19 November 2021 | ESMA35-43-349

Date: 19 November 2021 ESMA35-43-349

ESMA ? 201-203 rue de Bercy ? CS 80910 ? 75589 Paris Cedex 12 ? France ? Tel. +33 (0) 1 58 36 43 21 ? esma.europa.eu

2

Table of Contents

Table of questions ................................................................................................................. 5 Introduction ..........................................................................................................................17 1 Best execution [Last update: 3 October 2019] ...............................................................19 2 Suitability and appropriateness [Last update: 28 March 2019].......................................37 3 Recording of telephone conversations and electronic communications ...........................

[Last update: 3 October 2017] .......................................................................................46 4 Record keeping [Last update: 10 November 2017] ........................................................54 5 Investment advice on an independent basis [Last update: 3 October 2018] ..................55 6 Underwriting and placing [Last update: 16 December 2016]..........................................57 7 Inducements (research) [Last update: 12 July 2018] .....................................................60 8 Post-sale reporting [Last update: 23 March 2018] .........................................................74 9 Information on costs and charges [Last update: 21 December 2020] ............................80 10 Appropriateness / Complex Financial Instruments [Last update: 6 June 2017].........101 11 Client categorisation [Last update: 25 May 2018].....................................................102 12 Inducements [Last update: 28 May 2020] ................................................................106 13 Provision of investment services and activities by third country firms ...........................

[Last update: 28 March 2019] ..................................................................................116 14 Application of MiFID II after 3 January 2018, including issues of `late transposition

[Last update: 18 December 2017] ............................................................................121 15 Other issues [Last update: 3 October 2019].............................................................124 16 Product governance [Last update: 19 November 2021] ...........................................127 17 Product intervention [Last update: 4 December 2019]..............................................132 18 MiFID practices for firms selling financial instruments subject to the BRRD resolution regime [Last update: 18 February 2020].............................................................................133

3

Acronyms and definitions used

AIF

Alternative Investment Funds

BRRD 2

Directive 2019/879 of the European Parliament and of the Council

ESMA

The European Markets and Securities Authority

ITS

Implementing Technical Standards

KID

Key Information Document

MiFID I

Markets in Financial Instruments Directive ? Directive 2004/39/EC of the European Parliament and of the Council

MiFID II

Markets in Financial Instruments Directive (recast) ? Directive 2014/65/EU of the European Parliament and of the Council

MiFIR

Markets in Financial Instruments Regulation ? Regulation 600/2014 of the European Parliament and of the Council

MTF

Multilateral Trading Facility

OTC

Over The Counter

OTF

Organised Trading Facility

Q&A

Question and Answer

PRIIPs

Package Retail and Insurance-based Products

RPA

Research Payment Account

RTS

Regulatory Technical Standards

SFTs

Securities financing transactions

UCITS

Undertakings for Collective Investment in Transferable Securities

4

Table of questions

Topic of the Question

Level 1/Level 2

Best Execution

1 "Reasonable steps" Vs "sufficient Art. 27 of MiFID II steps"

Checking fairness of prices when 2 executing orders or decisions in

OTC products

3 Use of a single venue

4 Accessibility of reports

5

Latest date for publication of reports

6

MiFID II and timing of publication of reports

Reports for services of order 7 execution and reception and

transmission of orders

8 Disclosure of reports to public

Art. 27 of MiFID II Art. 64(4) of the MiFID II Delegated Regulation

RTS 271 Art. 24(1) of MiFID II Art. 27 of MiFID II

RTS 27, RTS 282 Art. 27 of MiFID II Art. 65(6) of the MiFID II Delegated Regulation

RTS 28 Art. 27 of MiFID II Art. 65(6) of the MiFID II Delegated Regulation

RTS 27, RTS 28 Art. 27 of MiFID II Art. 65(6) of the MiFID II Delegated Regulation

RTS 28 Art. 27 of MiFID II Art. 65(6) of the MiFID II Delegated Regulation

RTS 27, RTS 28 Art. 27 of MiFID II Art. 65(6) of the MiFID II Delegated Regulation

9 Venue disclosure of costs

RTS 27 Art. 27(3) of MiFID II

RTS 28

Summary of the analysis and

Art. 27 of MiFID II

10 conclusions from a firm's execution

monitoring

Art. 65(6) of the MiFID II

Delegated Regulation

Last Update

10/10/2016 10/10/2016 16/12/2016 16/12/2016 16/12/2016

4/4/2017 16/12/2016 3/10/2019 16/12/2016 16/12/2016

1 1 RTS 27 refers to the regulatory technical standards under Article 27(10)(a) of MiFID II adopted by the EC on 08/06/2016, Commission Delegated Regulation (EU) 2017/575 2 RTS 28 refers to the regulatory technical standards under Article 27(10)(b) of MiFID II adopted by the EC on 08/07/2016, Commission Delegated Regulation (EU) 2017/576

5

11

Information to be published on entities within a group

12

Transactions with eligible counterparties and RTS 27

Art. 27 of MiFID II Art. 65(6) of the MiFID II Delegated Regulation RTS 28

RTS 27 Art. 27 of MiFID II

Execution policies for investment 13 firms or market operators

operating OTFs

Information on passive and 14 aggressive orders in the context of

portfolio management and RTO

Art. 20 of MiFID II Art. 27 of MiFID II

Art. 27 of MiFID II Art. 65(6) of the MiFID II Delegated Regulation RTS 28

15

Securities Financing Transactions (SFTs)

RTS 27 Art. 1(5)(a) of MiFIR

16

Application of best execution to OTF operators

Disclosure of quality of execution 17 when using direct electronic

access

18

Definition of `other liquidity provider'

Art. 27 of MiFID II

Art. 27 of MiFID II RTS 28

RTS 27

19

Reporting for firms using a venue's RFQ system to agree a trade

RTS 28

RTS 27 reporting requirements for 20 market makers and other liquidity

providers

RTS 27

Reporting for venues on the 21 `trading mode' according to RTS

27

RTS 27

Reporting for venues and firms on

22

template fields of RTS 27 and 28 if the required content is not

RTS 27 and 28

applicable to their activities

Reporting on `passive' and

23

`aggressive' orders for firms using quote-driven systems to have

RTS 28

client orders executed

24

RTS 28 reporting and third-country execution venues

RTS 28

Classification of financial

25

instruments under RTS 27 if ESMA has not published any calibrated

RTS 27

market sizes

4/4/2017

4/4/2017 4/4/2017 4/4/2017 10/07/2017 3/10/2017 3/10/2017 25/05/2018 3/10/2018 28/03/2019 29/05/2019 29/05/2019 29/05/2019 29/05/2019 11/07/2019

6

Suitability and Appropriateness

Recording of telephone

conversations and electronic communications

Art. 25(6) of MiFID II

Suitability report: advice leading or

1 not to a transaction

Article 54(12) of the MiFID

II Delegated Regulation

Suitability report: record of when 2 the advice is given

Art. 25(6) of MiFID II

Suitability report: availability on 3 firm's website

Art. 25(6) of MiFID II Art. 3 of the MiFID II Delegated Regulation

Suitability report: provision to the client together with the report due Art. 25(6) of MiFID II 4 when carrying out an order on behalf of a client other than for portfolio management

5

Suitability report: advice not to buy or sell a financial instrument

Art. 25(6) of MiFID II

6

Transactions on unsuitable products

Art. 25(2) of MiFID II

Art. 25(2) of MiFID II

7

Disclosure of information by the client on his/her financial situation

Art. 54 of the MiFID II

Delegated Regulation

Art. 16(6) of MiFID II

8

Record keeping obligations related to investment advice

Art. 16(7) of MiFID II

Art. 25(6) of MiFID II

Periodic reporting of how the

Art. 25(6) of MiFID II

investment meets the client's

9 preferences, objectives and other Art. 60 of the MiFID II

characteristics of the retail client

Delegated Regulation

10

Suitability report: Use of generic statements

Art. 25(6) of MiFID II Art. 54(12) of the MiFID II Delegated Regulation

Recording of internal telephone 1 conversations and electronic

communications

Art. 16(7) of MiFID II

2

Charging clients for access to recordings

Art.16(7) of MiFID II

3 Monitoring of records

Art.16(7) of MiFID II Art. 76(6) of the MiFID II Delegated Regulation

4 Period of record keeping

Art.16(7) of MiFID II

Types of electronic 5 communications in scope of the

requirements

Art.16(7) of MiFID II

10/10/2016 10/10/2016 28/3/2019

10/10/2016 10/10/2016 10/10/2016 10/10/2016 16/12/2016

18/12/2017

28/3/2019 10/10/2016 10/10/2016 10/10/2016 10/10/2016 10/10/2016

7

Monitoring of records: control 6 function

Recording of telephone conversations and electronic 7 communications: critical or important operational function

Recording of telephone 8 conversations and electronic

communications from start to end

9

Client access to relevant internal conversations

10 Use of mobile devices

Telephone conversations and 11 electronic communications that

should be recorded

Scope of activities covered by the 12 requirements in Article 16(7) of

MiFID II (1)

Scope of activities covered by the 13 requirements in Article 16(7) of

MiFID II (2)

1 Encryption Record keeping

2

Securities financing transactions (SFTs)

Investment advice

on an

1

independent

basis

2

Assessment and comparison of a sufficient range of financial instruments

`Look-through' approach

16(7) of MiFID II Art. 76 of the MiFID II Delegated Regulation

Art.16(7) of MiFID II

Art.16(7) of MiFID II

Art.16(7) of MiFID II

Art.16(7) of MiFID II Art. 76 of the MiFID II Delegated Regulation Art.16(7) of MiFID II Art. 76 of the MiFID II Delegated Regulation

Art.16(7) of MiFID II

Art.16(7) of MiFID II

Arts. 16(6), 16(7) of MiFID II Art. 72 of the MiFID II Delegated Regulation Art. 16(6) of MiFID II Arts. 24(4), 24(7)) of MiFID II Arts. 52, 53 of the MiFID II Delegated Regulation Art. 24(7) of MiFID II

10/10/2016 10/10/2016 10/10/2016 10/10/2016 10/10/2016 10/10/2016 10/07/2017 3/10/2017 10/10/2016 10/11/2017 10/10/2016 3/10/2018

1

Underwriting and

placing

2

Various funding alternatives

Information on investor clients to be provided to issuer clients

3 Record Keeping

Art. 38(1) of the MiFID II Delegated Regulation

Art. 38(1) of the MiFID II Delegated Regulation

Art. 43 of the MiFID II Delegated Regulation

10/10/2016 16/12/2016 16/12/2016

8

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download