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

• (m) a total sum of the commissions and expenses charged and, where the client so requests, an itemised breakdown including, where relevant, the amount of any mark-up or mark-down imposed where the transaction was executed by an investment firm when dealing on own account, and the investment firm owes a duty of best execution to the client;

• (n) the rate of exchange obtained where the transaction involves a conversion of currency;

• (o) the client's responsibilities in relation to the settlement of the transaction, including the time limit for payment or delivery as well as the appropriate account details where these details and responsibilities have not previously been notified to the client;

• (p) where the client's counterparty was the investment firm itself or any person in the investment firm's group or another client of the investment firm, the fact that this was the case unless the order was executed through a trading system that facilitates anonymous trading.

For the purposes of point (k), where the order is executed in tranches, the investment firm may supply the client with information about the price of each tranche or the average price. Where the average price is provided, the investment firm shall supply the client with information about the price of each tranche upon request.

Article 60

Reporting obligations in respect of portfolio management

(Article 25(6) of Directive 2014/65/EU)

• (a) the name of the investment firm;

• (b) the name or other designation of the client's account;

• (c) a statement of the contents and the valuation of the portfolio, including details of each financial instrument held, its market value, or fair value if market value is unavailable and the cash balance at the beginning and at the end of the reporting period, and the performance of the portfolio during the reporting period;

• (d) the total amount of fees and charges incurred during the reporting period, itemising at least total management fees and total costs associated with execution, and including, where relevant, a statement that a more detailed breakdown will be provided on request;

• (e) a comparison of performance during the period covered by the statement with the investment performance benchmark (if any) agreed between the investment firm and the client;

• (f) the total amount of dividends, interest and other payments received during the reporting period in relation to the client's portfolio;

• (g) information about other corporate actions giving rights in relation to financial instruments held in the portfolio;

• (h) for each transaction executed during the period, the information referred to in Article 59(4)(c) to (l) where relevant, unless the client elects to receive information about executed transactions on a transaction-by-transaction basis, in which case paragraph 4 of this Article shall apply.

• (a) where the investment firm provides its clients with access to an online system, which qualifies as a durable medium, where up-to-date valuations of the client's portfolio can be accessed and where the client can easily access the information required by Article 63(2) and the firm has evidence that the client has accessed a valuation of their portfolio at least once during the relevant quarter;

• (b) in cases where paragraph 4 applies, the periodic statement must be provided at least once every 12 months;

• (c) where the agreement between an investment firm and a client for a portfolio management service authorises a leveraged portfolio, the periodic statement must be provided at least once a month.

The exception provided for in point (b) shall not apply in the case of transactions in financial instruments covered by Article 4(1)(44)(c) of, or any of points 4 to 11 of Section C in Annex I to Directive 2014/65/EU.

The investment firm shall send the client a notice confirming the transaction and containing the information referred to in Article 59(4) no later than the first business day following that execution or, where the confirmation is received by the investment firm from a third party, no later than the first business day following receipt of the confirmation from the third party.

The second subparagraph shall not apply where the confirmation would contain the same information as a confirmation that is to be promptly dispatched to the client by another person.

Article 61

Reporting obligations in respect of eligible counterparties

(Article 24(4) and Article 25(6) of Directive 2014/65/EU)

The requirements applicable to reports for retail and professional clients under Articles 49 and 59 shall apply unless investment firms enter into agreements with eligible counterparties to determine content and timing of reporting.

Article 62

Additional reporting obligations for portfolio management or contingent liability transactions

(Article 25(6) of Directive 2014/65/EU)

Article 63

Statements of client financial instruments or client funds

(Article 25(6) of Directive 2014/65/EU)

The first subparagraph shall not apply to a credit institution authorised under Directive 2000/12/EC of the European Parliament and of the Council ([^E0014]) in respect of deposits within the meaning of that Directive held by that institution.

• (a) details of all the financial instruments or funds held by the investment firm for the client at the end of the period covered by the statement;

• (b) the extent to which any client financial instruments or client funds have been the subject of securities financing transactions;

• (c) the extent of any benefit that has accrued to the client by virtue of participation in any securities financing transactions, and the basis on which that benefit has accrued;

• (d) a clear indication of the assets or funds which are subject to the rules of Directive 2014/65/EU and its implementing measures and those that are not, such as those that are subject to Title Transfer Collateral Agreement;

• (e) a clear indication of which assets are affected by some peculiarities in their ownership status, for instance due to a security interest;

• (f) the market or estimated value, when the market value is not available, of the financial instruments included in the statement with a clear indication of the fact that the absence of a market price is likely to be indicative of a lack of liquidity. The evaluation of the estimated value shall be performed by the firm on a best effort basis.

In cases where the portfolio of a client includes the proceeds of one or more unsettled transactions, the information referred to in point (a) may be based either on the trade date or the settlement date, provided that the same basis is applied consistently to all such information in the statement.

The periodic statement of client assets referred to in paragraph 1 shall not be provided where the investment firm provides its clients with access to an online system, which qualifies as a durable medium, where up-to-date statements of client's financial instruments or funds can be easily accessed by the client and the firm has evidence that the client has accessed this statement at least once during the relevant quarter.

SECTION 5 Best execution

Article 64

Best execution criteria

(Articles 27(1) and 24(1) of Directive 2014/65/EU)

• (a) the characteristics of the client including the categorisation of the client as retail or professional;

• (b) the characteristics of the client order, including where the order involves a securities financing transaction (SFT);

• (c) the characteristics of financial instruments that are the subject of that order;

• (d) the characteristics of the execution venues to which that order can be directed.

For the purposes of this Article and Articles 65 and 66, ‘execution venue’ includes a regulated market, an MTF, an OTF, a systematic internaliser, or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the functions performed by any of the foregoing.

Article 65

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

(Article 24(1) and 24(4) of Directive 2014/65/EU)

An investment firm satisfies its obligations under paragraph 1 or 2, and is not required to take the steps mentioned in this paragraph, to the extent that it follows specific instructions from its client when placing an order with, or transmitting an order to, another entity for execution.

Upon reasonable request from a client, investment firms shall provide its clients or potential clients with information about entities where the orders are transmitted or placed for execution.

Investment firms shall review the policy and arrangements at least annually. Such a review shall also be carried out whenever a material change occurs that affects the firm's ability to continue to obtain the best possible result for their clients.

Investment firms shall assess whether a material change has occurred and shall consider making changes to the execution venues or entities on which they place significant reliance in meeting the overarching best execution requirement.

A material change shall be a significant event that could impact parameters of best execution such as cost, price, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.

Article 66

Execution policy

(Article 27(5) and (7) of Directive 2014/65/EU)

Such a review shall also be carried out whenever a material change as defined in Article 65(7) occurs that affects the firm's ability to continue to obtain the best possible result for the execution of its client orders on a consistent basis using the venues included in its execution policy. An investment firm shall assess whether a material change has occurred and shall consider making changes to the relative importance of the best execution factors in meeting the overarching best execution requirement.

• (a) an account of the relative importance the investment firm assigns, in accordance with the criteria specified in Article 59(1), to the factors referred to in Article 27(1) of Directive 2014/65/EU, or the process by which the firm determines the relative importance of those factors.

• (b) a list of the execution venues on which the firm places significant reliance in meeting its obligation to take all reasonable steps to obtain on a consistent basis the best possible result for the execution of client orders and specifying which execution venues are used for each class of financial instruments, for retail client orders, professional client orders and SFTs;

• (c) a list of factors used to select an execution venue, including qualitative factors such as clearing schemes, circuit breakers, scheduled actions, or any other relevant consideration, and the relative importance of each factor; The information about the factors used to select an execution venue for execution shall be consistent with the controls used by the firm to demonstrate to clients that best execution has been achieved in a consistent basis when reviewing the adequacy of its policy and arrangements;

• (d) how the execution factors of price costs, speed, likelihood of execution and any other relevant factors are considered as part of all sufficient steps to obtain the best possible result for the client;

• (e) where applicable, information that the firm executes orders outside a trading venue, the consequences, for example counterparty risk arising from execution outside a trading venue, and upon client request, additional information about the consequences of this means of execution;

• (f) a clear and prominent warning that any specific instructions from a client may prevent the firm from taking the steps that it has designed and implemented in its execution policy to obtain the best possible result for the execution of those orders in respect of the elements covered by those instructions;

• (g) a summary of the selection process for execution venues, execution strategies employed, the procedures and process used to analyse the quality of execution obtained and how the firms monitor and verify that the best possible results were obtained for clients.

That information shall be provided in a durable medium, or by means of a website (where that does not constitute a durable medium) provided that the conditions specified in Article 3(2) are satisfied.

SECTION 6 Client order handling

Article 67

General principles

(Articles 28(1) and 24(1) of Directive 2014/65/EU)

• (a) ensure that orders executed on behalf of clients are promptly and accurately recorded and allocated;

• (b) carry out otherwise comparable client orders sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable, or the interests of the client require otherwise;

• (c) inform a retail client about any material difficulty relevant to the proper carrying out of orders promptly upon becoming aware of the difficulty.

Article 68

Aggregation and allocation of orders

(Articles 28(1) and 24(1) of Directive 2014/65/EU)

• (a) it is unlikely that the aggregation of orders and transactions will work overall to the disadvantage of any client whose order is to be aggregated;

• (b) it is disclosed to each client whose order is to be aggregated that the effect of aggregation may work to its disadvantage in relation to a particular order;

• (c) an order allocation policy is established and effectively implemented, providing for the fair allocation of aggregated orders and transactions, including how the volume and price of orders determines allocations and the treatment of partial executions.

Article 69

Aggregation and allocation of transactions for own account

(Articles 28(1) and 24(1) of Directive 2014/65/EU)

Where an investment firm is able to demonstrate on reasonable grounds that without the combination it would not have been able to carry out the order on such advantageous terms, or at all, it may allocate the transaction for own account proportionally, in accordance with its order allocation policy referred to in Article 68(1)(c).

Article 70

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

(Article 28 of Directive 2014/65/EU)

SECTION 7 Eligible counterparties

Article 71

Eligible counterparties

(Article 30 of Directive 2014/65/EU)

• (a) the investment firm shall provide the client with a clear written warning of the consequences for the client of such a request, including the protections they may lose;

• (b) the client shall confirm in writing the request to be treated as an eligible counterparty either generally or in respect of one or more investment services or a transaction or type of transaction or product and that they are aware of the consequences of the protection they may lose as a result of the request.

SECTION 8 Record-keeping

Article 72

Retention of records

(Article 16(6) of Directive 2014/65/EU)

• (a) the competent authority is able to access them readily and to reconstitute each key stage of the processing of each transaction;

• (b) it is possible for any corrections or other amendments, and the contents of the records prior to such corrections or amendments, to be easily ascertained;

• (c) it is not possible for the records otherwise to be manipulated or altered;

• (d) it allows IT or any other efficient exploitation when the analysis of the data cannot be easily carried out due to the volume and the nature of the data; and

• (e) the firm's arrangements comply with the record keeping requirements irrespective of the technology used.

The list of records identified in Annex I to this Regulation is without prejudice to any other record-keeping obligations arising from other legislation.

Competent authorities may require investment firms to keep additional records to the list identified in Annex I to this Regulation.

Article 73

Record keeping of rights and obligations of the investment firm and the client

(Article 25(5) of Directive 2014/65/EU)

Records which set out the respective rights and obligations of the investment firm and the client under an agreement to provide services, or the terms on which the firm provides services to the client, shall be retained for at least the duration of the relationship with the client.

Article 74

Record keeping of client orders and decision to deal

(Article 16(6) of Directive 2014/65/EU)

An investment firm shall, in relation to every initial order received from a client and in relation to every initial decision to deal taken, immediately record and keep at the disposal of the competent authority at least the details set out in Section 1 of Annex IV to this Regulation to the extent they are applicable to the order or decision to deal in question.

Where the details set out in Section 1 of Annex IV to this Regulation are also prescribed under Articles 25 and 26 of Regulation (EU) No 600/2014, these details should be maintained in a consistent way and according to the same standards prescribed under Articles 25 and 26 of Regulation (EU) No 600/2014.

Article 75

Record keeping of transactions and order processing

(Article 16(6) of Directive 2014/65/EU)

Investment firms shall, immediately after receiving a client order or making a decision to deal to the extent they are applicable to the order or decision to deal in question, record and keep at the disposal of the competent authority at least the details set out in Section 2 of Annex IV.

Where the details set out in Section 2 of Annex IV are also prescribed under Articles 25 and 26 of Regulation (EU) No 600/2014, they shall be maintained in a consistent way and according to the same standards prescribed under Articles 25 and 26 of Regulation (EU) No 600/2014.

Article 76

Recording of telephone conversations or electronic communications

(Article 16(7) of Directive 2014/65/EU)

• (a) the identification of the telephone conversations and electronic communications, including relevant internal telephone conversations and electronic communications, that are subject to the recording requirements in accordance with Article 16(7) of Directive 2014/65/EU; and

• (b) the specification of the procedures to be followed and measures to be adopted to ensure the firm's compliance with the third and eighth subparagraphs of Article 16(7) of Directive 2014/65/EU where exceptional circumstances arise and the firm is unable to record the conversation/communication on devices issued, accepted or permitted by the firm. Evidence of such circumstances shall be retained and shall be accessible to competent authorities.

• (a) that the conversations and communications are being recorded; and

• (b) that a copy of the recording of such conversations with the client and communications with the client will be available on request for a period of five years and, where requested by the competent authority, for a period of up to seven years.

The information referred to in the first sub-paragraph shall be presented in the same language(s) as that used to provide investment services to clients.

• (a) date and time of meetings;

• (b) location of meetings;

• (c) identity of the attendees;

• (d) initiator of the meetings; and

• (e) relevant information about the client order including the price, volume, type of order and when it shall be transmitted or executed.

Records shall be stored in a medium so that they are readily accessible and available to clients on request.

Firms shall ensure the quality, accuracy and completeness of the records of all telephone recordings and electronic communications.

SECTION 9 SME growth markets

Article 77

Qualification as an SME

(Article 4(1)(13) of Directive 2014/65/EU)

• (a) the closing share price of the first day of trading, if its shares have been admitted to trading for less than one year;

• (b) the last closing share price of the first year of trading, if its shares have been admitted to trading for more than one year but less than two years;

• (c) the average of the last closing share prices of each of the first two years of trading, if its shares have been admitted to trading for more than two years but less than three years.

Article 78

Registration as an SME growth market

(Article 33(3) of Directive 2014/65/EU)

Without prejudice to the other conditions for registration specified in points (b) to (g) of Article 33(3) of Directive 2014/65/EU, the competent authority shall register as an SME growth market an applicant with no previous operating history and, after three calendar years have elapsed, shall verify that it complies with the minimum proportion of SMEs, as determined in accordance with the first subparagraph.

• (a) has established and applies rules providing for objective and transparent criteria for the initial and ongoing admission to trading of issuers on its venue;

• (b) has an operating model which is appropriate for the performance of its functions and ensures the maintenance of fair and orderly trading in the financial instruments admitted to trading on its venue;

• (c) has established and applies rules that require an issuer seeking admission of its financial instruments to trading on the MTF, to publish, in cases where Directive 2003/71/EC does not apply, an appropriate admission document, drawn up under the responsibility of the issuer and clearly stating whether or not it has been approved or reviewed and by whom;

• (d) has established and applies rules that define the minimum content of the admission document referred to under point (c), in such a way that sufficient information is provided to investors to enable them to make an informed assessment of the financial position and prospects of the issuer, and the rights attaching to its securities;

• (e) requires the issuer to state, in the admission document referred to under point (c), whether or not, in its opinion, its working capital is sufficient for its present requirements or, if not, how it proposes to provide the additional working capital needed;

• (f) has made arrangements for the admission document referred to under point (c) to be subject to an appropriate review of its completeness, consistency and comprehensibility;

• (g) requires the issuers whose securities are traded on its venue to publish annual financial reports within 6 months after the end of each financial year, and half yearly financial reports within 4 months after the end of the first 6 months of each financial year;

• (h) ensures dissemination to the public of prospectuses drawn up in accordance with Directive 2003/71/EC, admission documents referred to under point (c), financial reports referred to under point (g) and information defined in Article 7(1) of Regulation (EU) No 596/2014 publicly disclosed by the issuers whose securities are traded on its venue, by publishing them on its website, or providing thereon a direct link to the page of the website of the issuers where such documents, reports and information are published;

• (i) ensures that the regulatory information referred to under point (h) and direct links remain available on its website for a period of at least five years;

• (j) requires issuers seeking admission of their shares to trading on its venue for the first time to allocate a minimum amount of their issued shares available for trading on the MTF, in accordance with a threshold to be established by the operator of the MTF and expressed either as an absolute value or as a percentage of the total issued share capital.

The operator of an MTF may exempt issuers that have no equity instruments traded on the MTF from the requirement to publish half-yearly financial reports referred to in point (g) of the first subparagraph of this paragraph. Where the operator of an MTF exercises the option pursuant to the first sentence of this subparagraph, the competent authority shall not require, for the purposes of point (g) of the first subparagraph, that issuers that have no equity instruments traded on the MTF be required to publish half-yearly financial reports.

Article 79

Deregistration as an SME growth market

(Article 33(3) of Directive 2014/65/EU)

CHAPTER IV OPERATING OBLIGATIONS FOR TRADING VENUES

Article 80

Circumstances constituting significant damage to investors' interests and the orderly functioning of the market

(Articles 32(1), 32(2), 52(1) and 52(2) of Directive 2014/65/EU)

• (a) where it would create a systemic risk undermining financial stability, such as where the need exists to unwind a dominant market position, or where settlement obligations would not be met in a significant volume;

• (b) where the continuation of trading on the market is necessary to perform critical post-trade risk management functions when there is a need for the liquidation of financial instruments due to the default of a clearing member under the default procedures of a CCP and a CCP would be exposed to unacceptable risks as a result of an inability to calculate margin requirements;

• (c) where the financial viability of the issuer would be threatened, such as where it is involved in a corporate transaction or capital raising.

• (a) the relevance of the market in terms of liquidity where the consequences of the actions are likely to be more significant where those markets are more relevant in terms of liquidity than in other markets;

• (b) the nature of the envisaged action where actions with a sustained or lasting impact on the ability of investors to trade a financial instrument on trading venues, such as removals, are likely to have a greater impact on investors than other actions;

• (c) the knock-on effects of a suspension or removal of sufficiently related derivatives, indices or benchmarks for which the removed or suspended instrument serves as an underlying or constituent;

• (d) the effects of a suspension on the interests of market end users who are not financial counterparties, such as entities trading in financial instruments to hedge commercial risks.

Article 81

Circumstances where significant infringements of the rules of a trading venue or disorderly trading conditions or system disruptions in relation to a financial instrument may be assumed

(Articles 31(2) and 54(2) of Directive 2014/65/EU)

Article 82

Circumstances where a conduct indicating behaviour that is prohibited under Regulation (EU) No 596/2014 may be assumed

(Articles 31(2) and 54(2) of Directive 2014/65/EU)

• (a) the deviations from the usual trading pattern of the financial instruments admitted to trading or traded on its trading venue; and

• (b) the information available or accessible to the operator, whether that be internally as part of the operations of the trading venue or publicly available.

CHAPTER V POSITION REPORTING IN COMMODITY DERIVATIVES

Article 83

Position reporting

(Article 58(1) of Directive 2014/65/EU)

• (a) 20 open position holders exist in a given contract on a given trading venue; and

• (b) the absolute amount of the gross long or short volume of total open interest expressed in the number of lots of the relevant commodity derivative is equal to, or exceeds, 10 000 lots.

For emission allowances and derivatives thereof, point (b) shall not apply.

CHAPTER VI DATA PROVISION OBLIGATIONS FOR DATA REPORTING SERVICE PROVIDERS

Article 84

Obligation to provide market data on a reasonable commercial basis

(Article 64(1) and 65(1) of Directive 2014/65/EU)

Article 85

Provision of market data on the basis of cost

(Article 64(1) and 65(1) of Directive 2014/65/EU)

Article 86

Obligation to provide market data on a non-discriminatory basis

(Article 64(1) and 65(1) of Directive 2014/65/EU)

• (a) the scope and scale of the market data including the number of financial instruments covered and trading volume;

• (b) the use made by the customer of the market data, including whether it is used for the customer's own trading activities, for resale or for data aggregation.

Article 87

Per user fees

(Article 64(1) and 65(1) of Directive 2014/65/EU)

Article 88

Unbundling and disaggregating market data

(Article 64(1) and 65(1) of Directive 2014/65/EU)

Article 89

Transparency obligation

(Article 64(1) and 65(1) of Directive 2014/65/EU)

• (a) current price lists, including the following information:
• (i) fees per display user;
• (ii) non-display fees;
• (iii) discount policies;
• (iv) fees associated with licence conditions;
• (v) fees for pre-trade and for post-trade market data;
• (vi) fees for other subsets of information, including those required in accordance with the regulatory technical standards pursuant to Article 12(2) of Regulation (EU) No 600/2014;
• (vii) other contractual terms and conditions;

• (b) advance disclosure with a minimum of 90 days' notice of future price changes;

• (c) information on the content of the market data including the following information:
• (i) the number of instruments covered;
• (ii) the total turnover of instruments covered;
• (iii) pre-trade and post-trade market data ratio;
• (iv) information on any data provided in addition to market data;
• (v) the date of the last licence fee adaption for market data provided;

• (d) revenue obtained from making market data available and the proportion of that revenue compared to total revenue of the APA or CTP;

• (e) information on how the price was set, including the cost accounting methodologies used and information about the specific principles according to which direct and variable joint costs are allocated and fixed joint costs are apportioned, between the production and dissemination of market data and other services provided by APAs and CTPs.

CHAPTER VII COMPETENT AUTHORITIES AND FINAL PROVISIONS

Article 90

Determination of the substantial importance of the operations of a trading venue in a host Member State

(Article 79(2) of Directive 2014/65/EU)

• (a) the host Member State has formerly been the home Member State of the regulated market in question;

• (b) the regulated market in question has acquired through merger, takeover, or any other form of transfer of the whole or part of the business of a regulated market which was previously operated by a market operator which had its registered office or head office in the host Member State.

• (a) before one of the situations set out in paragraph 1 occurred in regard to the MTF or OTF, the trading venue had a market share of at least 10 % of trading in terms of total turnover in monetary terms in on-venue trading and systematic internaliser trading in the host Member State in at least one asset class subject to the transparency obligations of Regulation (EU) No 600/2014;

• (b) the MTF or OTF is registered as an SME growth market.

CHAPTER VIII FINAL PROVISIONS

Article 91

Entry into force and application

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from 3 January 2018.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

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	Client assessment	Client assessment	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	Order handling	Order handling	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	Client Orders and transactions	Client Orders and transactions	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	Reporting to clients	Reporting to clients	Reporting to clients
	Obligation in respect of services provided to clients	Contents as provided for under Articles 59 to 63 of this Regulation	Paragraphs 1 and 6 of Article 24 and paragraphs 1 and 6 of Article 25 of Directive 2014/65/EU Articles 59 to 63 of this Regulation
Safeguarding of client assets	Safeguarding of client assets	Safeguarding of client assets	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	Communication with clients	Communication with clients	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	Organisational requirements	Organisational requirements	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

ANNEX II

Costs and charges

Identified costs that should form part of the costs to be disclosed to the clients

([^E0016])

Table 1 — All costs and associated charges charged for the investment service(s) and/or ancillary services provided to the client that should form part of the amount to be disclosed

Cost items to be disclosed	Cost items to be disclosed	Examples:
One-off charges related to the provision of an investment service	All costs and charges paid to the investment firm at the beginning or at the end of the provided investment service(s).	Deposit fees, termination fees and switching costs [^E0017].
Ongoing charges related to the provision of an investment service	All ongoing costs and charges paid to investment firms for their services provided to the client.	Management fees, advisory fees, custodian fees.
All costs related to transactions initiated in the course of the provision of an investment service	All costs and charges that are related to transactions performed by the investment firm or other parties.	Broker commissions [^E0018], entry- and exit-charges paid to the fund manager, platform fees, mark ups (embedded in the transaction price), stamp duty, transactions tax and foreign exchange costs.
Any charges that are related to ancillary services	Any costs and charges that are related to ancillary services that are not included in the costs mentioned above.	Research costs. Custody costs.
Incidental costs		Performance fees

Switching costs should be understood as costs (if any) that are incurred by investors by switching from one investment firm to another investment firm.

Broker commissions should be understood as costs that are charged by investment firms for the execution of orders.

Table 2 — All costs and associated charges related to the financial instrument that should form part of the amount to be disclosed

Cost items to be disclosed	Cost items to be disclosed	Examples:
One-off charges	All costs and charges (included in the price or in addition to the price of the financial instrument) paid to product suppliers at the beginning or at the end of the investment in the financial instrument.	Front-loaded management fee, structuring fee [^E0019], distribution fee.
Ongoing charges	All ongoing costs and charges related to the management of the financial product that are deducted from the value of the financial instrument during the investment in the financial instrument.	Management fees, service costs, swap fees, securities lending costs and taxes, financing costs.
All costs related to the transactions	All costs and charges that incurred as a result of the acquisition and disposal of investments.	Broker commissions, entry- and exit-charges paid by the fund, mark ups embedded in the transaction price, stamp duty, transactions tax and foreign exchange costs.
Incidental costs		Performance fees

Structuring fees should be understood as fees charged by manufacturers of structured investment products for structuring the products. They may cover a broader range of services provided by the manufacturer.

ANNEX III

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

SECTION A

Signals that may indicate significant infringements of the rules of a trading venue or disorderly trading conditions or system disruptions in relation to a financial instrument

Significant infringements of the rules of a trading venue

• 1.Market participants infringe rules of the trading venue which aim to protect the market integrity, the orderly functioning of the market or the significant interests of the other market participants; and

• 2.A trading venue considers that an infringement is of sufficient severity or impact to justify consideration of disciplinary action.

Disorderly trading conditions

• 3.The price discovery process is interfered with over a significant period of time;

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

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

• 6.Breakdown or failure of critical mechanisms under Article 48 of Directive 2014/65/EU and its implementing measures which are designed to protect the trading venue against the risks of algorithmic trading.

System disruptions

• 7.Any major malfunction or breakdown of the system for market access that results in participants losing their ability to enter, adjust or cancel their orders;

• 8.Any major malfunction or breakdown of the system for the matching of transactions, that results in participants losing certainty over the status of completed transactions or live orders as well as unavailability of information indispensable for trading (e.g., index value dissemination for trading certain derivatives on that index);

• 9.Any major malfunction or breakdown of the systems for the dissemination of pre- and post-trade transparency and other relevant data published by trading venues in accordance with their obligations under Directive 2014/65/EU and Regulation (EU) No 600/2014;

• 10.Any major malfunction or breakdown of the systems of the trading venue to monitor and control the trading activities of the market participants; and any major malfunction or breakdown in the sphere of other interrelated services providers, in particular CCPs and CSDs, that has repercussions on the trading system.

SECTION B

Signals that may indicate abusive behaviour under Regulation (EU) No 596/2014

Signals of possible insider dealing or market manipulation