CELEX: 
Language: en
Date: 2021-04-21 00:00:00
Title: COMMISSION DELEGATED REGULATION (EU) …/... correcting Delegated Regulation (EU) 2017/565 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

EXPLANATORY MEMORANDUM
            
            
               1.CONTEXT OF THE DELEGATED ACT
            
            
               To be fully compliant with Directive 2014/65/EU on markets in financial instruments (MiFID II), Article 1 paragraph 1 of Delegated Regulation (EU) 2017/565 should be corrected to clarify that it requires the application of Article 64(4), Article 65 and Chapter VIII of that Regulation instead of Article 59(4), Article 60 and Chapter IV. 
            
            
               Further, it shall correct errors that appeared in several cross-references in the Annex I to Delegated Regulation (EU) 2017/565, more precisely under 'Client assessment', 'Order handling', 'Client order and transactions', 'Reporting to clients', 'Communication with clients' and 'Organisational requirements'.
            
            
               2.LEGAL ELEMENTS OF THE DELEGATED ACT
            
            
               Article 1 of this Delegated Regulation corrects the following provisions and Annexes to Delegated Regulation (EU) 2017/565:
            
            
               –
                     Article 1(1) and Annex I.
            
            
               COMMISSION DELEGATED REGULATION (EU) …/...
            
            
               of 21.4.2021
            
            
               correcting Delegated Regulation (EU) 2017/565 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)
            
            
               THE EUROPEAN COMMISSION,
            
            
               Having regard to the Treaty on the Functioning of the European Union,
            
            
               Having regard to 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
                  1
               , and in particular Article 16(12) and Article 27(9) thereof,
            
            
               Whereas:
            
            
               (1)Errors appeared in Article 1(1) of Delegated Regulation (EU) 2017/565 as it was requiring the application of Article 59(4), Article 60 and Chapter IV of that Regulation, instead of Article 64(4), Article 65 and Chapter VIII.
            
            
               (2)Errors appeared in several cross-references in the Annex I to Delegated Regulation (EU) 2017/565, more precisely under 'Client assessment', 'Order handling', 'Client order and transactions', 'Reporting to clients', 'Communication with clients' and 'Organisational requirements'.
            
            
               (3)Delegated Regulation (EU) 2017/565 should therefore be corrected accordingly,
            
            
               HAS ADOPTED THIS REGULATION:
            
         
         
            
               Article 1
            
            
               Delegated Regulation (EU) 2017/565 is corrected as follows:
            
            
               (1)in Article 1, paragraph 1 is replaced by the following:
            
            
               “1.
                     Chapter II, and Sections 1 to 4, Article 64(4), Article 65 and Sections 6 to 8 of Chapter III and, to the extent they relate to those provisions, Chapter I and Chapter VIII of this Regulation shall apply to management companies when providing services in accordance with Article 6(4) of Directive 2009/65/EC and Article 6(6) of Directive 2011/61/EU of the European Parliament and of the Council*.
            
            
               ___________________________________________________________________
            
            
               *Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1).”;
            
            
               (2)Annex I is replaced by the text in the Annex to this Regulation.
            
            
               Article 2
            
            
               This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
            
            
               This Regulation shall be binding in its entirety and directly applicable in all Member States.
            
            
               Done at Brussels, 21.4.2021
            
            
               
                     For the Commission
               
               
                     The President
                     Ursula VON DER LEYEN
               
            
         
         
            
                  
                     (1)
                  
                        OJ L 173, 12.6.2014, p.349.
               
            
      
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               “ANNEX I
            
            
               Record-keeping
            
            
               Minimum list of records to be kept by investment firms depending upon the nature of their activities
            
            
                     
                        Nature of obligation
                     
                  
                  
                     
                        Type of record
                     
                  
                  
                     
                        Summary of content
                     
                  
                  
                     
                        Legislative reference
                     
                  
               
                     
                        Client assessment 
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Information to clients
                     
                  
                  
                     
                        Content as provided for under Article 24(4) of Directive 2014/65/EU and Articles 44 to 51 of this Regulation
                     
                  
                  
                     
                        Article 24(4) of Directive 2014/65/EU
                     
                     
                        Articles 44 to 51 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Client agreements
                     
                  
                  
                     
                        Records as provided for under Article 25(5) of Directive 2014/65/EU
                     
                  
                  
                     
                        Article 25(5) Directive 2014/65/EU
                     
                     
                        Article 58 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Assessment of suitability and appropriateness
                     
                  
                  
                     
                        Content as provided for under paragraphs 2 and 3 of Article 25 of Directive 2014/65/EU and Articles 54, 55 and 60 of this Regulation
                     
                  
                  
                     
                        Article 25(2) and (3) of Directive 2014/65/EU
                     
                     
                        Articles 54, 55 and 56 of this Regulation
                     
                  
               
                     
                        Order handling 
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Client order-handling — Aggregated transactions
                     
                  
                  
                     
                        Records as provided for under Articles 67 to 70 of this Regulation
                     
                  
                  
                     
                        Articles 24(1) and 28(1) of Directive 2014/65/EU
                     
                     
                        Articles 67 to 70 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Aggregation and allocation of trans-actions for own account
                     
                  
                  
                     
                        Records as provided for under Article 69 of this Regulation
                     
                  
                  
                     
                        Articles 24(1) and 28(1) of Directive 2014/65/EU
                     
                     
                        Article 69 of this Regulation
                     
                  
               
                     
                        Client Orders and transactions 
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Record keeping of client orders or decision to deal
                     
                  
                  
                     
                        Records as provided for under Article 74 of this Regulation
                     
                  
                  
                     
                        Article 16(6) of Directive 2014/65/EU
                     
                     
                        Article 74 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Record keeping of transactions and order processing
                     
                  
                  
                     
                        Records as provided for under Article 75 of this Regulation
                     
                  
                  
                     
                        Article 16(6) of Directive 2014/65/EU
                     
                     
                        Article 75 of this Regulation
                     
                  
               
                     
                        Reporting to clients 
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Obligation in respect of services provided to clients
                     
                  
                  
                     
                        Contents as provided for under Articles 59to 63 of this Regulation
                     
                  
                  
                     
                        Paragraphs 1 and 6 of Article 24 and paragraphs 1 and 6 of Article 25of Directive 2014/65/EU
                     
                     
                        Articles 59 to 63 of this Regulation
                     
                  
               
                     
                        Safeguarding of client assets 
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Client financial instruments held by an investment firm
                     
                  
                  
                     
                        Records as provided for under Article 16(8) of Directive 2014/65/EU and under Article 2 of Commission Delegated Directive (EU) 2017/593
                     
                  
                  
                     
                        Article 16(8) of Directive 2014/65/EU
                     
                     
                        Article 2 of Delegated Directive (EU) 2017/593
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Client funds held by an investment firm
                     
                  
                  
                     
                        Records as provided for under Article 16(9) of Directive 2014/65/EU and under Article 2 of Delegated Directive (EU) 2017/593
                     
                  
                  
                     
                        Article 16(9) of Directive 2014/65/EU
                     
                     
                        Article 2 of Delegated Directive (EU) 2017/593
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Use of client financial instruments
                     
                  
                  
                     
                        Records provided for under Article 5 of Delegated Directive (EU) 2017/593
                     
                  
                  
                     
                        Paragraphs 8, 9 and 10 of Article 16 of Directive 2014/65/EU
                     
                     
                        Article 5 of Delegated Directive (EU) 2017/593
                     
                  
               
                     
                        Communication with clients 
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Information about Costs and associated charges
                     
                  
                  
                     
                        Contents as provided for under Article 50 of this Regulation
                     
                  
                  
                     
                        Article 24(4), point (c) of Directive 2014/65/EU
                     
                     
                        Article 50 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Information about the investment firm and its services, financial instruments and safe-guarding of client assets
                     
                  
                  
                     
                        Content as provided for under Articles 47, 48 and 49 of this Regulation
                     
                  
                  
                     
                        Article 24(4) of Directive 2014/65/EU
                     
                     
                        Articles 47, 48 and 49 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Information to clients
                     
                  
                  
                     
                        Records of communication
                     
                  
                  
                     
                        Article 24(3) of Directive 2014/65/EU
                     
                     
                        Article 46 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Marketing communications (except in oral form)
                     
                  
                  
                     
                        Each marketing communication issued by the investment firm (except in oral form) as provided under Articles 44 and 46 of this Regulation
                     
                  
                  
                     
                        Article 24(3) of Directive 2014/65/EU
                     
                     
                        Articles 44 and 46 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Investment advice to retail clients
                     
                  
                  
                     
                        (i) The fact, time and date that investment advice was rendered and (ii) the financial instrument that was recommended (iii) the suitability report provided to the client
                     
                  
                  
                     
                        Article 25(6) of Directive 2014/65/EU
                     
                     
                        Article 54 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Investment research
                     
                  
                  
                     
                        Each item of investment research issued by the investment firm in a durable medium
                     
                  
                  
                     
                        Article 24(3) of Directive 2014/65/EU
                     
                     
                        Articles 36 and 37 of this Regulation
                     
                  
               
                     
                        Organisational requirements 
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                  
                  
                     
                  
               
                     
                         
                     
                  
                  
                     
                        The firm's business and internal organisation
                     
                  
                  
                     
                        Records as provided for under Article 21(1), point (f) of this Regulation
                     
                  
                  
                     
                        Paragraphs 2 to 10 of Article 16 of Directive 2014/65/EU
                     
                     
                        Article 21(1), point (f) of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Compliance reports
                     
                  
                  
                     
                        Each compliance report to management body
                     
                  
                  
                     
                        Article 16(2) of Directive 2014/65/EU
                     
                     
                        Article 22(2), point (c) and Article 25(2) of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Conflict of Interest record
                     
                  
                  
                     
                        Records as provided for under Article 35 of this Regulation
                     
                  
                  
                     
                        Article 16(3) of Directive 2014/65/EU
                     
                     
                        Article 35 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Inducements
                     
                  
                  
                     
                        The information disclosed to clients under Article 24(9) of Directive 2014/65/EU
                     
                  
                  
                     
                        Article 24(9) of Directive 2014/65/EU
                     
                     
                        Article 11, 12 and 13 of Delegated Directive (EU) 2017/593
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Risk management reports
                     
                  
                  
                     
                        Each risk management report to senior management
                     
                  
                  
                     
                        Article 16(5) of Directive 2014/65/EU
                     
                     
                        Article 23(1), point (b) and Article 25(2) of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Internal audit reports
                     
                  
                  
                     
                        Each internal audit report to senior management
                     
                  
                  
                     
                        Article 16(5) of Directive 2014/65/EU
                     
                     
                        Article 24 and Article 25(2) of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Complaints-handling records
                     
                  
                  
                     
                        Each complaint and the complaint handling measures taken to address the complaint
                     
                  
                  
                     
                        Article 16(2) of Directive 2014/65/EU
                     
                     
                        Article 26 of this Regulation
                     
                  
               
                     
                         
                     
                  
                  
                     
                        Records of personal transactions
                     
                  
                  
                     
                        Records as provided for under Article 29(5), point (c) of this Regulation
                     
                  
                  
                     
                        Article 16(2) of Directive 2014/65/EU
                     
                     
                        Article 29(5), point (c) of this Regulation
                     
                  
               
               "