European Union (Markets in Financial instruments) (Amendment) Regulations 2022.
Statutory Instruments
Source: Statutory Instruments

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paragraphs: (1) These Regulations may be cited as the European Union (Markets in Financial Instruments) (Amendment) Regulations 2022.
(2) These Regulations, other than paragraph (1) of Regulation 3, come into operation on 28 February 2022.
(3) Paragraph (1) of Regulation 3 comes into operation on the making of these Regulations.
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paragraphs: In these Regulations, “Principal Regulations” means the European Union (Markets in Financial Instruments) Regulations 2017 ( S.I. No. 375 of 2017 ).
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paragraphs: (1) Regulation 3(1) of the Principal Regulations is amended, in the definition of “Directive” –
(a) in subparagraph (d), by the deletion of “and” after “27 November 2019,”,
(b) in subparagraph (e), by the substitution of “27 November 2019,” for “27 November 2019;”, and
(c) by the insertion of the following subparagraphs after subparagraph (e):
“(f) Directive (EU) 2020/1504 of the European Parliament and of the Council of 7 October 20203 , and
(g) Directive (EU) 2019/2177 of the European Parliament and of the Council of 18 December 20194 ;”.
(2) Regulation 3(1) of the Principal Regulations is amended –
(a) in the definition of “agricultural commodity derivatives” by the insertion of “, as well as to products listed in Annex I to Regulation (EU) No 1379/2013 of the European Parliament and of the Council” after “and of the Council”,
(b) in the definition of “Directive” (as amended by paragraph (1)) –
(i) in subparagraph (f), by the deletion of “and” after “7 October 2020,”
(ii) in subparagraph (g), by the substitution of “18 December 2019, and” for “18 December 2019;”, and
(iii) by the insertion of the following subparagraph after subparagraph (g):
“(h) Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 20215 ;”,
and
(c) by the insertion of the following definitions:
“ ‘electronic format’ means any durable medium other than paper;
‘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;
‘predominantly commercial group’ means any group the main business of which is not the provision of investment services within the meaning of the Directive, 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;
‘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;”.
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paragraphs: Regulation 4 of the Principal Regulations is amended, in paragraph (1)(k), by the substitution of the following subclauses for subclauses (I), (II) and (III):
“(I) for each of those cases individually and on an aggregate basis, the activity is ancillary to their main business, when considered on a group basis,
(II) those persons are not part of a group the main business of which is the provision of investment services within the meaning of these Regulations or the performance of any activity listed in Annex I to Directive 2013/36/EU, or acting as a market-maker for commodity derivatives,
(III) those persons do not apply a high-frequency algorithmic trading technique, and
(IV) those persons report upon request to the Bank the basis on which they have assessed that their activity under clauses (i) and (ii) is ancillary to their main business;”.
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paragraphs: The Principal Regulations are amended by the insertion of the following Regulation after Regulation 23:
“23A. An investment firm shall be exempted from the requirements set out in subparagraphs (c) and (d) of Regulation 23(1), Regulation 23(2) and paragraphs (1) and (2) of Regulation 32, 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.”.
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paragraphs: Regulation 32 of the Principal Regulations is amended –
(a) by the insertion of the following paragraph after paragraph (9):
“(9A) For the purposes of paragraph (4), 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 –
(a) 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:
(i) the client has consented to receiving the information without undue delay after the conclusion of the transaction;
(ii) the investment firm has given the client the option of delaying the conclusion of the transaction until the client has received the information,
and
(b) the investment firm shall give the client the option of receiving the information on costs and charges by telephone prior to the conclusion of the transaction.”,
(b) in paragraphs (10) and (11), by the substitution of “(9A)” for “(8)” in each place where it occurs,
(c) by the insertion of the following paragraphs after paragraph (11):
“(11A) Investment firms shall provide all information required to be provided by these Regulations to clients or potential clients in electronic format, except where the client or potential client is a retail client or potential retail client who has requested receiving the information on paper, in which case that information shall be provided on paper, free of charge.
(11B) Investment firms shall inform retail clients or potential retail clients that they have the option of receiving the information required to be provided by these Regulations on paper.
(11C) Investment firms shall inform existing retail clients who receive the information required to be provided by these Regulations 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.
(11D) Investment firms shall inform existing retail clients who receive the information required to be provided by these Regulations on paper that –
(a) they have the choice either to continue receiving the information on paper or to receive the information in electronic format, and
(b) if they do not, within the eight week period referred to in paragraph (11C), request the continuation of the provision of the information on paper, the information will be provided in electronic format.
(11E) Existing retail clients who already receive the information required to be provided by these Regulations in electronic format are not required to be informed in accordance with paragraphs (11C) and (11D).”, and
(d) by the insertion of the following paragraphs after paragraph (16):
“(16A) Where research is provided by a third party to an investment firm providing portfolio management or management or other investment or ancillary services to clients, the investment firm shall be regarded as having fulfilled the obligations under Regulation 31 where –
(a) 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,
(b) the investment firm informs its clients about the joint payments for execution services and research made to the third party providers of research, and
(c) 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 €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.
(16B) For the purposes of paragraph (16A), ”research“ means research material or services –
(a) concerning one or several financial instruments or other assets, or the issuers or potential issuers of financial instruments,
(b) closely related to a specific industry or market such that the material or services inform views on financial instruments, assets or issuers within that industry or market,
(c) 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
(d) that 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.”.
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paragraphs: Regulation 33 of the Principal Regulations is amended by the insertion of the following paragraph after paragraph (4):
“(4A) An investment firm shall –
(a) when providing investment advice or portfolio management that involves the switching of financial instruments, obtain the necessary information on the client’s investment and analyse the costs and benefits of the switching of financial instruments, and
(b) when providing investment advice that involves the switching of financial instruments, inform the client whether or not the benefits of the switching of financial instruments are greater than the costs involved in such switching.”.
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paragraphs: Regulation 35 of the Principal Regulations is amended –
(a) in paragraph (5), by the substitution of “Subject to paragraph (5A), each trading venue” for “Each trading venue”, and
(b) by the insertion of the following paragraph after paragraph (5):
“(5A) The obligations under paragraph (5) shall not apply until 28 February 2023.”.
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paragraphs: The Principal Regulations are amended by the insertion of the following Regulation after Regulation 37:
“37A. (1) The requirements laid down in Regulation 32(7) shall not apply to services provided to professional clients except for investment advice and portfolio management.
(2) The requirements laid down in paragraphs (4A) and (13) to (16) of Regulation 33 shall not apply to services provided to professional clients, unless those clients inform the investment firm either in electronic format or on paper that they wish to benefit from the rights provided for in those provisions.
(3) Investment firms shall keep a record of the client communications referred to in paragraph (2).”.
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paragraphs: Regulation 38 of the Principal Regulations is amended, in paragraph (1), by the substitution of “Regulations 31, 32(1) to (11) and (12) to (20), 33, 35 and 36(1)” for “Regulations 31, 32(1) to (3) and (12) to (20), 33(1) to (12) and (17), 35 and 36(1)”.
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paragraphs: Regulation 81 of the Principal Regulations is amended –
(a) by the substitution of the following paragraphs for paragraphs (1) and (2):
“(1) The Bank shall, in line with the calculation methodology determined by ESMA in the regulatory technical standards adopted in accordance with Article 57(3) of the Directive, 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.
(2) 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.”,
(b) by the insertion of the following paragraph after paragraph (3):
“(3A) Position limits referred to in paragraph (1) shall not apply to the following:
(a) 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;
(b) 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;
(c) 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) of the Directive;