62022CC0695
OPINION OF ADVOCATE GENERAL
PITRUZZELLA
delivered on 14 November 2023 (
1
)
Case C‑695/22
Fondee a.s.
v
Česká národní banka
(Request for a preliminary ruling from the Městský soud v Praze (Prague City Court, Czech Republic))
(Reference for a preliminary ruling – Markets in financial instruments – Directive 2014/65/EU – Articles 3 and 34 – Investment intermediaries – Article 56 TFEU – Freedom to provide services)
1.
By the reference for a preliminary ruling the subject of this Opinion, the Městský soud v Praze (Prague City Court, Czech Republic) asks the Court for a preliminary ruling on two questions concerning the interpretation of Article 3(1) and (3) and Article 34 of Directive 2014/65/EU, (
2
) the so-called MiFID II Directive, (
3
) and their connection with Article 56 TFEU.
2.
These questions arose in the context of an action brought before the referring court by the company Fondee a.s. (‘Fondee’ or ‘the applicant in the main proceedings’) in order to obtain the annulment of the decision by which the Board of the Czech National Bank upheld the fine imposed by the latter on the applicant for infringement of legal provisions regulating the capital market in the Czech Republic.
I. Legal framework
A.
European Union law
3.
Directive 2014/65 – which recast Directive 2004/39, partly merged into Regulation (EU) No 600/2014 (
4
) – constitutes, together with that regulation, ‘the legal framework governing the requirements applicable to investment firms, regulated markets, data reporting services providers and third country firms providing investment services or activities in the Union’ (recital 7 of Directive 2014/65). Its main objective is the development of a single market for financial services, in which the exercise of the freedom of establishment and the freedom to provide services is guaranteed and the transparency and protection of investors is ensured, through the harmonisation of national provisions relating, in particular, to the authorisation and operating conditions of investment firms, as well as to the powers of supervisory authorities and the regime for imposing sanctions.
4.
According to Article 1(1) of Directive 2014/65, the latter applies, inter alia, to ‘investment firms’. Point 1 of Article 4(1) of that directive defines an ‘investment firm’ as any legal person, and, under certain conditions, also entities which have no legal personality or natural persons, ‘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’ According to point 2 of Article 4(1) of that directive, the term ‘investment services and activities’ covers any service or activity listed in Section A of Annex I to that directive relating to one of the instruments listed in Section C of that annex. Point 4 of Article 4(1) defines ‘investment advice’ as 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, while point 5 of Article 4(1) defines the activity of ‘execution of orders on behalf of clients’ as ‘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’.
5.
Article 3 of Directive 2014/65, entitled ‘Optional exemptions’, provides in paragraph 1 thereof:
‘1.   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:
(a)
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;
(b)
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
(c)
in the course of providing that service, are allowed to transmit orders only to:
(i)
investment firms authorised in accordance with this Directive;
…
(iv)
collective investment undertakings authorised under the law of a Member State to market units to the public and to the managers of such undertakings’.
6.
Article 3(2) of Directive 2014/65 provides that the Member States’ regimes are to submit the persons referred to in paragraph 1 of that article to requirements which are at least analogous to those requirements under that directive as regards the conditions and procedures for authorisation and ongoing supervision, the conduct of business obligations and the organisational requirements as established in provisions of that directive expressly referred to. Lastly, Article 3(3) of the same directive provides that persons exempt from that directive pursuant to paragraph 1 ‘shall not benefit from the freedom to provide services or to perform activities or to establish branches as provided for in Articles 34 and 35 respectively’.
7.
Title II of Directive 2014/65 lays down the authorisation and operating conditions for investment firms. Articles 5 and 6 of that directive are included in Chapter I of that title concerning the conditions and procedures for authorisation (‘the single European passport’). More specifically, Article 5, entitled ‘Requirement for authorisation’, makes the provision of investment services and/or the performance of investment activities as a regular occupation or business on a professional basis subject to prior authorisation granted by the competent authority of the home Member State. (
5
) Pursuant to Article 6(1) of the same directive, the authorisation must specify the investment services or activities which the investment firm is authorised to provide, while Article 6(3) specifies that ‘the authorisation shall be valid for the entire Union and shall allow an investment firm to provide the services or perform the activities, for which it has been authorised, throughout the Union, either through the right of establishment, including through a branch, or through the freedom to provide services’.
8.
Chapter III of Title II of Directive 2014/65 defines the rights of investment firms. The first subparagraph of Article 34(1), which appears in that chapter, states that ‘Member States shall ensure that any investment firm authorised and supervised by the competent authorities of another Member State in accordance with this Directive … may freely provide investment services and/or perform investment activities, as well as ancillary services within their territories, provided that such services and activities are covered by its authorisation. …’. The second subparagraph of Article 34(1) specifies that no ‘additional requirements’ are imposed on such firms. Pursuant to Article 34(2) and (3), an investment firm wishing to provide services or activities within the territory of another Member State for the first time, or wishing to change the range of services or activities so provided, shall communicate its intention to its home Member State, which will forward that information to the competent authority of the host Member State. (
6
) Following such notification, the investment firm may then start to provide the services and activities concerned in the host Member State. Article 35 of Directive 2014/65, inserted in the same Chapter III of Title II of that directive, provides, in the first subparagraph of paragraph 1, that ‘Member States shall ensure that investment services and/or activities as well as ancillary services may be provided within their territories in accordance with this directive … through the right of establishment, whether by the establishment of a branch or by the use of a tied agent established in a Member State outside its home Member State, provided that those services and activities are covered by the authorisation granted to the investment firm …’.
B.
Czech law
9.
The exercise of the activity of an investment broker in the Czech Republic is subject to authorisation from the Czech National Bank. Pursuant to Paragraph 29(1) of zákon č. 256/2004 Sb., o podnikání na kapitálovém trhu, (Law No 256/2004 on engaging in business on the capital market; ‘the Law on capital market’), as amended, an investment intermediary is entitled to provide only some of the main investment services, namely to receive and transmit orders pertaining to financial instruments (which include collective investment securities) and to provide investment advice in respect of those instruments. Paragraph 29(4) of that article provides that, when providing such services, investment intermediaries may only transmit orders to ‘a securities trader, bank or investment company …’. A ‘securities trader’ is, according to Paragraph 5(1) of the Law on capital market, a legal entity entitled to provide main investment services on the basis of a permit granted by the Czech National Bank and which has its registered office in the Czech Republic pursuant to Paragraph 6(1)(b) of that law.
10.
Paragraph 29(4) of the Law on capital market thus establishes a prohibition on the transmission, by investment intermediaries, of orders to investment firms established outside that Member State. That paragraph was inserted by legislative amendment No 204/2017, which replaced, with effect from 3 January 2018, the former Paragraph 29(1)(b) of the Law on capital market, which made it possible also to transmit orders to foreign operators. According to the explanatory memorandum contained in the legislative amendment, this range of entities was deliberately restricted by the legislature, with a view to simplifying supervision by the Czech National Bank. Pursuant to Paragraph 162(1)(a) of the Law on capital market, a person commits an offence by unlawfully carrying on an activity pursuant to that law.
II. The dispute in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court
11.
Fondee is an investment intermediary pursuant to Paragraph 29(1) of the Law on capital market operating on the basis of a permit granted by the Czech National Bank. According to the bank’s findings, over the period between 7 October 2019 and 27 December 2019, Fondee transmitted 407 orders to a foreign securities trader. Fondee enabled, in particular, its clients to invest in so-called ETFs (‘exchange-traded funds’ (
7
)), collective investment securities accepted for trading on foreign exchange and other regulated markets. The clients submitted an order through their user accounts on the www.fondee.cz website, which Fondee then transmitted to the company DeGiro B.V. (‘DeGiro’), established in the Netherlands, all on the basis of a trilateral agreement between that company, Fondee, and the clients. As a result of these findings, pursuant to Paragraph 162(1)(a) of the Law on capital market, the Czech National Bank imposed a fine of 150000 Czech koruny (CZK) on Fondee for breach of the prohibition laid down in Paragraph 29(4) of that law, as amended. This decision was confirmed by the Board of the Czech National Bank, which rejected the complaint lodged by Fondee. The company therefore challenged the decision of that Board before the referring court.
12.
Before that court, Fondee argued, in the first place, that the prohibition at issue, by preventing a securities trader established in another Member State from providing services to an investment intermediary in the Czech Republic, introduces a form of discrimination prohibited under Article 56 TFEU or, in any event, an inadmissible restriction on the freedom to provide services, which has the effect of limiting access to the Czech market to providers from other Member States. In the second place, Fondee submitted that the prohibition at issue also infringes Article 56 TFEU in so far as it restricts the right of a Czech investment intermediary to receive or otherwise benefit from a service provided by a service provider established in another Member State. The Czech National Bank first of all pleaded the inadmissibility of Fondee’s arguments claiming infringement of the right of foreign securities traders to freedom to provide services. It then argued, as regards the alleged infringement of the right of Czech investment intermediaries to benefit from services provided by securities traders established in other Member States, that the question of the relationship between Directive 2014/65 and Article 56 TFEU left no room for doubt. An investment intermediary excluded from the freedom to provide investment services under Article 3(3) of that directive could only in fact benefit from that freedom under Article 56 TFEU, where those services do not amount to investment services.
13.
In those circumstances, the referring court decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)
Does a person who is, pursuant to Article 3(1) [of Directive 2014/65], … excluded from the scope of the directive, and who does not, pursuant to Article 3(3) of the directive, enjoy the freedom to provide services as defined in Article 34 thereof, enjoy the right to freedom to provide services embodied in Article 56 [TFEU], if it itself does not provide investment services on the basis of a single European passport to a client established in another Member State, but rather receives an investment service from a foreign operator using a single European passport or otherwise takes part in its provision to the end client (acts as an intermediary)?
(2)
If the answer to the previous question is affirmative, does EU law, namely Article 56 [TFEU], preclude legislation prohibiting an investment [intermediary] from transmitting a client’s order to a foreign securities trader?’
14.
In addition to the parties to the main proceedings, the Czech Republic, the Republic of Finland and the European Commission submitted written observations in the present proceedings, pursuant to the second paragraph of Article 23 of the Statute of the Court of Justice of the European Union.
III. Analysis
1.
The questions referred for a preliminary ruling
15.
By the first question referred for a preliminary ruling, the referring court asks, in essence, whether a person covered by an optional exemption under Article 3(1) of Directive 2014/65 may rely on Article 56 TFEU as beneficiary of an investment service provided by a ‘foreign operator’ using a single European passport or as an intermediary in the provision of that service to the final client. If the answer to the first question is affirmative, by its second question, that court asks, in essence, whether European Union law and, in particular, Article 56 TFEU, precludes legislation such as that at issue in the main proceedings, which prohibits an investment intermediary from transmitting its clients’ orders to a ‘foreign securities trader’.
16.
Before proceeding with the examination of those questions, which I consider it appropriate to examine together, there is need for some clarification.
17.
In the first place, it is apparent from the order for reference that the Netherlands company DeGiro, to which Fondee transmitted the orders at issue in the main proceedings (‘the foreign operator’ or ‘foreign securities trader’, to which the questions referred for a preliminary ruling refer), is an investment firm within the meaning of Article 4(1) of Directive 2014/65, which operates under the regime of the freedom to provide services in accordance with Article 34(1) of that directive, by means of a permit granted pursuant to that directive. Moreover, it does not appear to be disputed that it is authorised to operate in the Czech Republic under paragraph 2 of that article.
18.
In the second place, both the reception and transmission of orders such as those at issue in the main proceedings, and their execution, constitute ‘investment services’ within the meaning of Article 4(1)(2) of Directive 2014/65. (
8
)
19.
In the third place, it is agreed by the parties to the main proceedings that Fondee did not participate in the cross-border provision of investment services. In receiving and transmitting the orders at issue in the main proceedings to DeGiro, it in fact provided investment services solely to its clients resident or established in the Czech Republic. Fondee was nevertheless ‘implicated’ in the provision of a cross-border investment service between two Member States. The actual extent of this implication depends on the terms of the trilateral agreement between Fondee itself, the Czech investors and the company DeGiro. It is on the basis of the agreements between those parties that it must be assessed whether, as Fondee contends, Fondee was the (indirect) recipient of the services provided by DeGiro in the execution of the orders at issue in the main proceedings, or whether the Czech investors, who were bound by contractual ties not only with Fondee but also with that company, were to be regarded as the sole recipients of those services while Fondee acted only as intermediary. The first question referred for a preliminary ruling is formulated in such a way as to cover both hypotheses, namely, Fondee’s participation in the provision of cross-border investment services either as the recipient of the service provided by DeGiro or as a mere intermediary required to receive and transmit orders, which were then executed directly on behalf of Czech investors.
20.
That said, I would point out that, as is apparent from settled case-law, any national measure adopted in an area which has been the subject of exhaustive or full harmonisation at EU level must be assessed in the light of the provisions of the harmonising measure and not those of primary law. (
9
)
21.
The issue at the heart of the dispute concerns, in essence, the compatibility with EU law on the freedom to provide services of the prohibition imposed by a Member State on investment intermediaries operating under a national authorisation to transmit orders, with a view to their execution, to investment firms authorised under Directive 2014/65 which are not established in that Member State. Therefore, despite the fact that the questions referred for a preliminary ruling in the present case are essentially raised on the basis of Article 56 TFEU, it is necessary to assess whether the above prohibition falls within the scope of the provisions of Directive 2014/65, which are subject to exhaustive harmonisation. To that end, the Court must interpret those provisions taking into account not only their wording, but also the context in which they occur and the objectives of the rules of which they form part. (
10
)
22.
Directive 2014/65 aims to harmonise, inter alia, national provisions concerning the exercise of the freedom of establishment and the freedom to provide services, with the objective of creating an ‘integrated financial market’. (
11
) Title II of that directive, which lays down the ‘authorisation and operating conditions for investment firms’, contains, in Chapter III, entitled ‘Rights of investment firms’, Article 34, devoted to the ‘freedom to provide investment services and activities’, which, as mentioned above, provides, in Article 34(1), that Member States shall ensure that any investment firm authorised and supervised by the competent authorities of another Member State in accordance with that directive may freely provide investment services and/or perform investment activities as well as ancillary services within their territories, and, in the second subparagraph of that article, that they shall refrain from imposing any ‘additional requirements’ on such firms.
23.
That article has, in my view, brought about full harmonisation of the cross-border provision of services and the cross-border exercise of investment activities falling within its scope by investment firms holding a ‘European passport’ issued in accordance with the provisions of that directive. Pursuant to the abovementioned Article 34 of Directive 2014/65, Member States may not introduce obstacles, restrictions, conditions or requirements to the exercise of those freedoms which are not provided for in that directive and which are not introduced in the manner prescribed therein, even where they are intended to ensure the protection of investors.
24.
That follows, in particular, from Article 24 of Directive 2014/65 inserted in Section 2, headed ‘Provisions to ensure investor protection’, of Chapter II of that directive, which sets out the ‘operating conditions for investment firms’. Article 24(1) provides that Member States shall require that investment firms act honestly, fairly and professionally in the best interests of their clients and comply, in particular, with the principles laid down in that article – set out in detail in Article 24(2) to (11) – and in Article 25. Article 24(12) provides that Member States may, ‘in exceptional cases’, impose ‘additional requirements on investment firms … objectively justified and proportionate so as to address 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’. However, on the one hand, the second subparagraph of Article 24(12) makes it clear that any such additional requirements ‘shall not restrict or otherwise affect the rights of investment firms’, in particular, those referred to in Article 34 of Directive 2014/65. On the other hand, the second and third subparagraphs of Article 24(12) provide for the procedure that the Member State concerned must follow in order to be authorised to introduce such additional requirements (notification to the Commission and opinion expressed by it). (
12
)
25.
On the basis of the foregoing, applying the case-law referred to in point 20 above, the prohibition laid down in Paragraph 29(4) of the Law on capital market must, in my view, be assessed with reference only to the provisions of Directive 2014/65, despite the fact that it does not apply to the investment intermediaries covered by that prohibition, who benefit from an optional exemption under Article 3(1) of that directive. (
13
) That prohibition is in fact liable to restrict the freedom to provide services from which investment firms authorised in accordance with Directive 2014/65 benefit under Article 34 of that directive.
26.
Even if the Court were not to agree with the opinion I have reached, according to which Article 34 of Directive 2014/65 achieves full harmonisation of the cross-border provision of services by those enterprises, I nevertheless consider that the prohibition at issue in the main proceedings must be assessed in relation to that article, in addition to Article 56 TFEU. (
14
)
27.
In the remainder of my analysis I will therefore make both assessments.
(a)
Assessment on the basis of the provisions of Directive 2014/65
28.
As a preliminary point, I note that, contrary to what the Finnish Government appears to assert in its written observations, Directive 2014/65 does not impose any prohibition on persons benefiting from an optional exemption under Article 3(1) thereof from receiving investment services from an investment firm established in another Member State or from participating, as an intermediary, in the provision of cross-border investment services to clients resident or established in the Member State in which they are established.
29.
Indeed, while Article 3(1)(c) of that directive limits the circle of parties to whom those persons are authorised to transmit orders, point (i) of that provision includes among those persons investment firms authorised in accordance with that directive.
30.
Thus, Directive 2014/65 expressly provides that persons benefiting from an optional exemption may be authorised to transmit abroad orders received from clients resident or established in their home Member State, provided, however, that the firm receiving those orders meets all the conditions laid down in Article 34 of that directive for the provision of the services in question in that Member State.
31.
I would add that nothing to the contrary can be drawn from Article 3(1)(c)(iv) of Directive 2014/65, according to which persons benefiting from an optional exemption may be authorised to transmit orders to ‘collective investment undertakings authorised under the law of a Member State to market units to the public …’. Indeed, the interpretation put forward by the Czech National Bank – as set out in the order for reference – to the effect that the bodies referred to in that provision are only bodies authorised under the law of the home Member State of the exempted person, finds, in my view, no support either in the wording, or in the scheme or the overall rationale of that provision.
32.
That said, if Directive 2014/65 enables persons excluded from its application under Article 3(1) thereof to be authorised to transmit orders to investment firms not established in their home Member State, it must be ascertained whether the provision, which is responsible for defining the regime applicable to such persons, may nevertheless prohibit such a transmission.
33.
In this regard, I note that Member States invoking an optional exemption under Article 3(1) of Directive 2014/65 make use of a discretionary power expressly conferred upon them by that directive. However, that discretion is not unlimited. The power in question, which is already subject to compliance with specific standards laid down directly by Directive 2014/65, must be exercised in compliance with EU law and, in particular, with the objectives pursued by that directive.
34.
However, a prohibition such as that laid down in Paragraph 29(4) of the Law on capital market, which operates on the basis of a criterion centred on the place in which the service provider is established, is, in my view, incompatible with the objective pursued by that directive, which consists, inter alia, in the realisation of a single market in investment services based on the principles of mutual recognition of the authorisation granted by the provider’s home Member State and of the supervision exercised by that Member State.
35.
In fact, by precluding an investment firm, authorised in accordance with Directive 2014/65 and entitled to operate in the Czech Republic under the freedom to provide services, from executing, on behalf of clients resident or established in the Czech Republic who rely on the services of an investment intermediary, orders transmitted directly by that intermediary, that prohibition effectively prevents, or at least hinders, such a firm from using a specific channel of access to the Czech investment market, which is, by contrast, open to operators who have a national authorisation and are established in that Member State.
36.
In so far as it requires such a firm to pass through a third, nationally authorised person, (
15
) the aforementioned prohibition also introduces an ‘additional requirement’, barred under the second subparagraph of Article 34(1) of Directive 2014/65. Such an obligatory step, by increasing the costs of the service provided by a non-resident investment firm compared to that provided by domestic investment firms, is likely to make the former less attractive to investors. (
16
)
37.
In that context, the mere fact that an investment firm operating in the Czech Republic, on the basis of the freedom to provide services in accordance with Directive 2014/65, may have other ways of delivering its services, for example by requesting to receive directly orders from investors established in that Member State or by using a tied agent, (
17
) does not preclude the prohibition at issue from constituting a restriction to the freedom to provide cross-border services, (
18
) any more than, a fortiori, it is precluded by the fact that that firm has the option of setting up an establishment or a branch in that Member State. (
19
) Similarly, the existence of a restriction is not affected by the fact that the activity of investment intermediaries is not indispensable to the functioning of the financial market and that their establishment or maintenance is within the discretion of each Member State. In fact, once such a choice has been made, the regime applicable to them, although defined autonomously by the Member State concerned – albeit in compliance with the criteria referred to above – cannot infringe the provisions of Directive 2014/65 and, in particular, constitute a restriction on the freedom to provide services attributed to investment firms authorised under that directive, by essentially reserving direct access to investors using the services of those intermediaries to national operators.
38.
Admittedly, Directive 2014/65 also includes, among its main objectives, the achievement of a high level of investor protection throughout the European Union, (
20
) and the prohibition laid down in Paragraph 29(4) of the Law on capital market is justified, according to the order for reference and the observations of the Czech Republic and the Czech National Bank, precisely by the need to exercise control over the activities of investment intermediaries in order to protect investors who use their services.
39.
However, it should be noted that, in limiting the conditions under which Member States may exclude certain persons from the application of Directive 2014/65 and in providing that they are obliged to apply to those persons requirements which are at least analogous to those laid down by that directive with regard to conditions and procedures for authorisation, the assessment of their reputation and experience, the suitability of any shareholders, ongoing supervision as well as to the conduct of business obligations, the EU legislature intended to strengthen the protection of investors who, by using the services of those persons, are not safeguarded by Directive 2014/65 (see recital 42 of that directive). In particular, Article 3(2) of the directive refers to a large part of the conduct of business obligations contained in Articles 24 and 25 thereof and, in particular, the duty to act honestly, fairly and professionally in accordance with clients’ best interests, the duty to provide fair, clear and expeditious information to clients that is not misleading, to conduct a suitability test when an advisory service is provided, as well as rules on remuneration, investor guarantee and protection schemes or professional insurance. The alignment of national regimes with those rules and requirements, imposed by Directive 2014/65, is intended to reduce the risk of conduct that is detrimental to investors relying on persons excluded from its application pursuant to Article 3(1) thereof and to enable such conduct to be tackled more effectively.
40.
I would also point out that the EU legislature itself did not consider it necessary to include, among the conditions permitting the Member States to exclude certain persons from the application of the directive, the prohibition on transmitting orders for execution by firms authorised under Directive 2014/65. On the contrary, it admitted such a possibility, by implicitly taking the view that, when carried out within the scope of that directive, such transactions did not present risks which the supervisory bodies of the home Member State of those persons, possibly in conjunction with the supervisory authorities of the home Member State of the receiving investment firm, (
21
) were unable to contain.
41.
In this regard, I also point out that Directive 2014/65, on the one hand, imposes an obligation on investment firms intended to operate under a single European passport to ask the client to provide information regarding that person’s knowledge and experience in the investment field relevant to the specific type of product or service offered or requested, in order to assess whether the service or product envisaged is appropriate for the client (see Article 25(3) of Directive 2014/65) and, on the other hand, reduced the scope of ‘execution only’, especially in the case of complex products, by making it subject to compliance with certain conditions (see Article 25(4)). Therefore, in principle, even in a configuration such as that at issue in the main proceedings, it cannot be ruled out that, in order to comply with their responsibilities under Directive 2014/65, investment firms required to execute orders transmitted by an intermediary excluded from the application of that directive will be required to monitor the actions taken by that intermediary.
42.
For the reasons set out above, a measure taken by a Member State which requires investment intermediaries excluded from the application of Directive 2014/65 pursuant to an optional exemption under Article 3(1) of that directive, to transmit orders received from their clients only to persons authorised and established in that Member State; it thus prohibits such intermediaries from transmitting those orders to a firm established in a different Member State, even where it is authorised under that directive to provide investment services in the intermediary’s home Member State, is, in my view, incompatible with the objectives pursued by that directive.
43.
The defendant in the main proceedings disputed Fondee’s standing to rely on such an incompatibility, since it is not itself an investment firm within the meaning of Directive 2014/65 and is, on the contrary, excluded from the application of that directive and from the freedom to provide investment services under Article 34 thereof. The referring court also doubts that it has such standing, since Fondee does not rely on harm specific to it or on the infringement of a right conferred upon it by EU law.
44.
In that regard, I would point out that the Court has already had occasion to hold – in a situation similar to that characterising the dispute in the main proceedings, albeit in a different context – that a prohibition, accompanied by a penalty, imposed on intermediaries, on facilitating the provision of services by a service provider established in a Member State other than that in which those intermediaries carry on their activities, also constitutes a restriction on the freedom to provide services. (
22
) More generally, where a company established in one Member State provides services through an economic operator established in another Member State, the restrictions imposed on the activities of that operator fall within the scope of the freedom to provide services, irrespective of the situation in which that operator finds itself, and the operator may therefore rely on the provisions of EU law to oppose the imposition of the sanctions which make up the prohibitions impeding the activity of intermediaries. (
23
) Although those principles have been confirmed by the Court with regard to the application of the provisions of primary law, they can be transposed mutatis mutandis to a context such as that at issue in the main proceedings, concerning harmonised secondary law.
45.
The fact that, in accordance with Article 3(3) of Directive 2014/65, the applicant in the main proceedings does not enjoy the freedom provided for in Article 34 of that directive does not call into question what has just been set out.
46.
The aforementioned Article 3(3) must in fact be interpreted as referring only to the freedom of operators enjoying an optional exemption to provide investment services to recipients residing or established in a Member State
other than their home Member State under the conditions laid down in Article 34 of that directive, not also to the freedom to benefit, as recipients, from investment services provided by a firm authorised under that directive established in another Member State, nor to the freedom to act as intermediaries in the context of the provision of investment services by such a firm to clients established in their home Member State.
47.
Such an interpretation follows not only from the clear wording of Article 3(3) of Directive 2014/65, but also from the objective pursued by that provision, which is to prevent an entity which does not meet the requirements laid down in the directive from being authorised to provide cross-border investment services. An interpretation of that provision, according to which persons benefiting from an optional exemption may not be the recipients of a cross-border investment service such as that at issue in the main proceedings, or act as intermediaries in the context of such a service, would, moreover, be inconsistent with Article 3(1)(c)(i) of that directive, which, as has been seen, expressly provides that such persons may transmit orders to an investment firm authorised under that directive for the purposes of their execution.
48.
However, as stated in paragraph 19 above, by transmitting the orders at issue in the main proceedings, Fondee provided investment services solely to its clients resident or established in the Czech Republic and therefore provided a service with no cross-border element. Furthermore, while it is true that it facilitated the provision of cross-border investment services between the Netherlands and the Czech Republic, it did not, however, as correctly argued in its observations, participate in the provision of an investment service abroad, as the orders in question were executed on behalf of clients resident or established in the Czech Republic.
49.
Admittedly, in paragraph 30 of the judgment of 14 June 2017, Khorassani, (
24
) also referred to by the referring court, the Court, ruling on the interpretation of Directive 2004/39, stated that there is a close link between the investment service consisting of the ‘reception and transmission of orders’ and one consisting of the ‘execution of orders’, ‘the former being provided upstream from the latter and in general leading to the provision of the latter’. However, where those services are provided by separate persons, the existence of such a link – due solely to the fact that the ‘orders’ which are the subject of those services are the same, (
25
) does not prevent the services provided and the responsibilities assumed by each of those persons from being considered separately – according to their specific characteristics – and that is so even where those services are provided, as is the case in the main proceedings, in the context of a trilateral contractual agreement.
50.
Fondee is therefore entitled to rely on the infringement of Article 34 of Directive 2014/65 in order to challenge the fine imposed on it for having infringed the prohibition laid down in Paragraph 29(4) of the Law on capital market, in so far as it acts, not as the provider of a cross-border investment service, but as the recipient of that service or as an intermediary in the provision thereof.
(b)
Assessment on the basis of Article 56 TFEU
51.
If the Court were to decide to answer the questions referred for a preliminary ruling on the basis of Article 56 TFEU, I would point out that, according to settled case-law of the Court, the freedom to provide the services enshrined in that article requires, not only the elimination of any discrimination against a provider of services established in another Member State on grounds of nationality, but also the removal of any restriction – even if it applies without distinction to national providers of services and to those from other Member States – where it is likely to prohibit, impede or render less attractive the activities of the provider established in another Member State where it lawfully provides similar services. (
26
) More generally, Article 56 TFEU covers services that a provider, established in one Member State offers, without relocating, to recipients established in another Member State, so that any restriction on such activities constitutes a restriction on the freedom of that provider to provide services. (
27
)
52.
Furthermore, according to settled case-law, Article 56 TFEU confers rights not only on the provider of services, but also the persons for whom the services are intended. (
28
) The freedom to provide services thus encompasses not only the freedom of the provider to provide services for recipients established in a Member State other than that in whose territory that provider is established, but also the freedom to receive or benefit, as a person for whom the services are intended, from services offered by a provider established in another Member State, without being subject to restrictions. (
29
) Indeed, the Treaty treats restrictions imposed on service providers and those imposed on the persons for whom the services are intended in the same way. Thus, when the situation falls within the scope of Article 56 TFEU, both the person for whom the service is intended and the provider of the service may rely on that article. (
30
) Lastly, according to the Court, as has already been mentioned, a prohibition imposed on an intermediary to facilitate a cross-border provision of services also constitutes a restriction on the freedom to provide services, even where that intermediary is established in the same Member State as the persons for whom the services are intended. (
31
)
53.
By the first question referred for a preliminary ruling, the referring court asks, in essence, whether an investment intermediary, such as the applicant in the main proceedings, which benefits from an optional exemption under Article 3(1) of Directive 2014/65, may, under the wording of paragraph 3 of that article, rely on Article 56 TFEU as the person
for whom a cross-border provision of investment services is intended or as an intermediary in such a provision of services.
54.
On this point, I merely refer to paragraph 46 above regarding the interpretation that, in my view, must be given to Article 3(3) of Directive 2014/65. It is in my view clear that that provision does not prevent a person excluded from the application of that directive from invoking Article 56 TFEU in accordance with the case-law referred to in point 52 above. I therefore take the view, irrespective of any other consideration concerning the relationship between primary law and secondary law, that Article 3(3) of Directive 2014/65 cannot be read as preventing an investment intermediary exempted from the application of Directive 2014/65 under Article 3(1) of that directive from relying on Article 56 TFEU, as the person for whom the cross-border provision of investment services is intended or as an intermediary in such a provision of services.
55.
By the second question referred for a preliminary ruling, the referring court asks, in essence, whether Article 56 TFEU precludes a prohibition such as that laid down in Paragraph 29(4) of the Law on capital market.
56.
In this regard, consistent with what has already been stated above with reference to Article 34 of Directive 2014/65, I consider that such a prohibition is likely to impede or make less attractive the activities that investment firms established in a different Member State offer in the Czech Republic and thus constitutes a restriction on the freedom to provide services within the meaning of Article 56 TFEU.
57.
Such a restriction to the freedom to provide services is only warranted, in accordance with the settled case-law of the Court, if it pursues a legitimate objective compatible with the FEU Treaty and is justified by overriding reasons in the public interest, provided that, in such a case, it is suitable for securing the attainment of the objective pursued and does not go beyond what is necessary in order to attain that objective. (
32
)
58.
It is apparent from the order for reference and the observations of the Czech Republic that Paragraph 29(4) of the Law on capital market is justified by the need to facilitate the monitoring of the activities of investment intermediaries, in particular in the light of past practices contrary to the interests of clients adopted by those intermediaries. The Czech National Bank points out that domestic securities traders who receive orders transmitted by investment intermediaries are subject to specific monitoring obligations with respect to the actions of the latter and that, also for this reason, monitoring the activities of investment intermediaries is made more difficult when the orders are transmitted to providers outside the Czech Republic.
59.
In that regard, I will merely point out that the Court has already had occasion to state that neither considerations of an administrative nature nor, in particular, the objective of simplifying the performance of the task of a supervisory authority can justify obstructing the exercise of one of the fundamental freedoms guaranteed by the Treaty. (
33
) In the circumstances of the main proceedings, moreover, those justifications are invoked in a context in which the activity of the operators excluded from the possibility of working with Czech investment intermediaries is governed by specific secondary legislation imposing requirements, obligations and controls intended to ensure a high level of investor protection.
(c)
Interim conclusions
60.
On the basis of all the foregoing considerations, I consider that the national measure at issue must be examined on the basis of the provisions of Directive 2014/65 and that it is not necessary, in order to provide a useful answer to the referring court, to examine whether, in the circumstances of the main proceedings, Fondee is entitled to rely on Article 56 TFEU.
61.
Accordingly, I suggest that the Court reply to the questions referred by the referring court, subject to the appropriate rephrasing of those questions, to the effect that Article 34 of Directive 2014/65 must be interpreted as precluding legislation of a Member State which requires investment intermediaries excluded from the application of that directive pursuant to an optional exemption under Article 3(1) of that directive, to transmit orders received from clients resident or established in that Member State only to securities traders authorised by the supervisory authority of that Member State and established in that State, and thus excludes the transmission of such orders to investment firms authorised under that directive and established in another Member State.
IV. Conclusion
62.
On the basis of all the foregoing considerations, I suggest that the Court reply as follows to the questions referred for a preliminary ruling by the Městský soud v Praze (Prague City Court, Czech Republic):
Article 34 of 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
must be interpreted as precluding legislation of a Member State which requires investment intermediaries excluded from the application of that directive pursuant to an optional exemption under Article 3(1) of that directive, to transmit orders received from clients resident or established in that Member State only to securities traders authorised by the supervisory authority of that Member State and established in that State, and thus excludes the transmission of such orders to investment firms authorised under that directive and established in another Member State.
(
1
)	Original language: Italian.
(
2
)	Directive 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 2014 L 173, p. 349).
(
3
)	MiFID stands for ‘Markets in Financial Instrument Directive’. Directive 2014/65 repealed and replaced, with effect from 3 January 2017, Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ 2004 L 145, p. 1; so-called MiFID I).
(
4
)	Regulation of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ 2014 L 173, p. 84).
(
5
)	According to point 55 of Article 4(1) of Directive 2014/65, if the investment firm is a legal person, the home Member State is the Member State in which its registered office is situated.
(
6
)	According to point 56 of Article 4(1) of Directive 2014/65, ‘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 …’.
(
7
)	Article 4(1)(46) of Directive 2014/65 defines ‘exchange-traded fund’ as ‘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’.
(
8
)	As regards reception, transmission and execution activities carried out on behalf of clients who have placed orders for one or more financial instruments, see Annex I, Section A, points 1 and 2 of Directive 2014/65. The ‘exchange-traded funds’, which are the subject of the orders at issue in the main proceedings, fall within the category of ‘transferable securities’ in Annex I, Section C, point 1 to Directive 2014/65.
(
9
)	See judgment of 20 April 2023, Autorità Garante della Concorrenza e del Mercato (Municipality of Ginosa) (C‑348/22, EU:C:2023:301, paragraph 36).
(
10
)	See, to that effect, judgment of 16 July 2015, UNIC and Uni.co.pel (C‑95/14, EU:C:2015:492, paragraph 35 and the case-law cited).
(
11
)	See, in particular, recitals 7 and 164 of Directive 2014/65.
(
12
)	I note that similar provisions are laid down in Article 16(11) of Directive 2014/65 with regard to the additional organisational requirements that Member States may, in exceptional cases, impose on investment firms.
(
13
)	I note that while, according to Article 3(1) and (3) of Directive 2014/65, the directive ‘shall not apply’ to persons benefiting from an optional exemption, Article 3(2) provides that the Member States shall submit such persons to requirements which are ‘at least analogous’ to those laid down by that directive with regard to conditions and procedures for authorisation and ongoing supervision, conduct of business obligations and organisational requirements as laid down in specific articles thereof and in the rules implementing them.
(
14
)	In that context, I note that the circumstances in the main proceedings differ from those in the case giving rise to the judgment of 8 May 2019, Mastromartino (C‑53/18, EU:C:2019:380), in which the Court held that the temporary prohibition on the activity of a ‘financial adviser authorised to provide offsite services’, covered by the concept of ‘tied agent’ pursuant to Directive 2004/39, does not fall within the scope of that directive, which therefore had no effect on that prohibition. On the other hand, as mentioned above, Directive 2014/65 is likely to affect the prohibition at issue in the main proceedings.
(
15
)	Particularly where the orders received by the intermediary relate, as appears to be the case in the main proceedings, to financial instruments, which are not traded on a Czech regulated market and the entity authorised at national level to which those orders are transmitted is not entitled to operate on foreign markets and is therefore obliged to transmit them in turn to an investment firm with such authorisation.
(
16
)	I note that one of the major attractions of operators such as DeGiro is linked to the fact that they can charge very competitive fees.
(
17
)	In this respect, I note that in its written observations Fondee argues that the vast majority of Czech tied agents work with investment intermediaries and are therefore not, in practical terms, accessible, except to a very small extent, to a foreign investment firm.
(
18
)	See, by analogy, judgment of 10 May 1995, Alpine Investments (C‑384/93, EU:C:1995:126, paragraph 28).
(
19
)	See judgment of 21 January 2010, Commission v Germany (C‑546/07, EU:C:2010:25, paragraph 39).
(
20
)	See, in particular, recitals 3 and 70 of Directive 2014/65.
(
21
)	The first subparagraph of Article 79(1) of Directive 2014/65 imposes an obligation on the competent authorities of the various Member States designated to carry out the functions provided for in that directive to cooperate with each other ‘where necessary’. In that regard, see also 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 2019 L 314, p. 64).
(
22
)	See judgment of 6 November 2003, Gambelli and Others (C‑243/01, EU:C:2003:597, paragraph 58; ‘the judgment in Gambelli’): the case which gave rise to the judgment in Gambelli concerned the provision of betting services on sporting events by a provider established in a Member State other than that in which the bets were collected by agencies acting as intermediaries between that provider and the players.
(
23
)	See, by analogy, judgment of 4 February 2016, Ince (C‑336/14, EU:C:2016:72), paragraphs 41 to 43. The case concerned a third-country national resident in a Member State who collected sports bets on behalf of a company established in a different Member State.
(
24
)	C‑678/15, EU:C:2017:451.
(
25
)	See Opinion of Advocate General Campos Sánchez-Bordona in Khorassani (C‑678/15, EU:C:2017:100, point 42).
(
26
)	See judgment of 26 February 2020, Stanleyparma and Stanleybet Malta (C‑788/18, EU:C:2020:110, paragraph 17 and the case-law cited).
(
27
)	See judgment of 16 March 2023, OL (Extension of Italian licences) (C‑517/20, EU:C:2023:219, paragraph 44 and the case-law cited).
(
28
)	See judgment of 2 March 2023, PrivatBank and Others (C‑78/21, EU:C:2023:137, paragraph 45 and the case-law cited).
(
29
)	See judgment of 6 October 2021, Casa Naţională de Asigurări de Sănătate and Casa de Asigurări de Sănătate Constanţa (C‑538/19, EU:C:2021:809, paragraph 33 and the case-law cited).
(
30
)	See judgment of 3 December 2020, BONVER WIN (C‑311/19, EU:C:2020:981, paragraph 21).
(
31
)	See the judgment in Gambelli, paragraph 58.
(
32
)	See judgment of 27 October 2022, Instituto do Cinema e do Audiovisual (C‑411/21, EU:C:2022:836, paragraph 24).
(
33
)	See judgment of 4 December 1986, Commission v Germany (205/84, EU:C:1986:463, paragraph 54). See also judgment of 25 June 2009, Commission v Austria (C‑356/08, EU:C:2009:401, paragraph 46).