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S.I. No. 60/2007 - European Communities (Markets in Financial Instruments) Regulations 2007

Type Statutory Instrument

Publication 2007-02-15

Last updated 2017-08-18

State Repealed superseded text

Text As published

Source Irish Statute Book

articles 17

This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.

14 amending acts · 2017-08-18, S.I. No. 375/2017 - European Union (Markets in Financial Instruments) Regulations 2017

Reform history JSON API

(a) apply under these Regulations for an authorisation to operate as an investment firm using false or misleading information, or

(b) make false or misleading statements to the Bank in relation to an application for -

(i) an authorisation under this Regulation to operate as an investment firm, or

(ii) an approval or permission from the Bank concerning the operation of an investment firm.

Scope of authorisation

20. (1) An authorisation granted to an investment firm under Regulation 11(1) -

(a) shall specify -

(i) the investment services which the firm is to provide, and

(ii) the types of financial instruments in which the firm may deal,

(b) may cover one or more ancillary services but shall not be granted solely for the provision of ancillary services, and

(i) extend to the provision of any investment business services, or

(ii) cover any investment instruments,

as defined in the Investment Intermediaries Act 1995.

(2) A person shall not provide any -

(a) investment business services referred to in paragraph (1)(c)(i), or

(b) services in respect of investment instruments referred to in paragraph (1)(c)(ii)

unless the person is an authorised investment firm.

(3) An investment firm seeking authorisation to extend its business to additional investment services or ancillary services for which the firm is not authorised under these Regulations may apply to the Bank for the appropriate extension of the firm's authorisation and the Bank may grant the extension if the Bank considers the extension appropriate in the circumstances.

(4) An authorisation granted to an investment firm under Regulation 11(1) together with an extension, if any, under subsection (3) of this Regulation -

(a) is valid for the entire European Community if the investment firm complies with Regulation 124, and

(b) allows an investment firm or a branch established by it to provide the services or perform the activities, for which the firm has been authorised, throughout the European Community.

Withdrawal of authorisations for investment firms

21. (1) The Bank may withdraw an authorisation, granted under Regulation 11 to operate as an investment firm if the firm -

(a) fails to operate as an investment firm during the 12 month period following after the date of the authorisation,

(b) expressly renounces the authorisation,

(d) no longer meets the conditions under which the authorisation was granted or the prerequisites to authorisation listed in Regulation 13(a to (i).

(e) is being wound up, or

(f) has seriously or systematically infringed the provisions of these Regulations governing the operation of investment firms.

(2) Other than in the circumstances outlined in paragraph (1)(a), the Bank may withdraw an authorisation, granted under Regulation 11, to operate as an investment firm if the firm has not provided investment services for the immediately preceding 6 months.

Court may revoke authorisation on application by Bank

22. (1) Without prejudice to the power of the Bank to withdraw an authorisation under Regulation 21(1), the Bank may apply to the Court in a summary manner for an order revoking an authorisation to operate as an investment firm if the revocation is expedient -

(a) in the interests of the proper and orderly regulation and supervision of investment firms,

(b) in order to protect investors, or

(2) The circumstances referred to in paragraph (1) are as follows:

(a) the investment firm has been convicted on indictment of any offence -

(i) under these Regulations,

(ii) under any enactment under which the Bank exercises statutory functions, or

(iii) involving fraud, dishonesty or breach of trust;

(b) circumstances have materially changed since the granting of the authorisation such that, if an application for the authorisation were made at the time of the application to the Court, a different decision would be taken in relation to the application for authorisation;

(i) making false or misleading statements, or

(ii) using false or misleading information,

(d) the investment firm has systematically failed to comply with a condition or requirement of these Regulations;

(e) the investment firm has failed to comply to a material degree with a condition or requirement of these Regulations;

(f) the investment firm no longer fulfils any or all of the conditions or requirements which were -

(i) imposed when the authorisation was granted, or

(ii) subsequently imposed;

(g) the investment firm -

(i) no longer complies with capital or any other financial requirements specified by the Bank, or

(ii) is not maintaining, or is unlikely to be able to maintain, having regard to the nature and volume of the firm's business adequate capital resources or adequate other resources;

(h) the investment firm becomes unable or, in the opinion of the Bank, is likely to become unable, to meet its obligations to its creditors or suspends payments lawfully due;

(i) the investment firm has infringed to a material degree a code of conduct or rules of conduct specified in or set out under Regulation 79;

(j) a director, manager or qualifying shareholder of the investment firm no longer satisfies the Bank as to the matters specified in Regulation 13(d and (e);

(k) the investment firm -

(i) has not complied with a condition, requirement or direction imposed by or under these Regulations, and

(ii) the circumstances are such that the Bank is of the opinion that the stability and soundness of the firm is or has been materially affected by the non-compliance;

(l) the investment firm has so organised its business or corporate structure that -

(i) the firm, and,

(ii) where appropriate, any related undertaking or associated undertaking,

either collectively or individually, is no longer capable of being supervised to the satisfaction of the Bank under these Regulations.

(3) On an application by the Bank to the Court under this Regulation, the Court may make interim or interlocutory orders as it thinks fit in the circumstances.

(4) An application by the Bank to the Court under this Regulation or under Regulation 27(4) may be heard otherwise than in public.

(5) The Bank shall not apply to the Court to revoke an authorisation on the grounds set out in paragraph (2)(j) unless the Bank has given the authorised investment firm concerned an opportunity to -

(a) remove the director, manager or qualifying shareholder, or

(b) otherwise deal with the concerns of the Bank in relation to the probity or competence of the director, manager or qualifying shareholder,

within such period of time as the Bank may specify.

Bank to give notice of proposed withdrawal or revocation of authorisation

23. When the Bank proposes to withdraw an authorisation to operate as an investment firm or to apply to the Court for an order to revoke an authorisation to operate as an investment firm, the Bank shall -

(a) serve notice on the investment firm of its intention, and

(b) state its reasons in the notice.

Publication of withdrawal or revocation of authorisation

24 Within 28 days after withdrawal or revocation of an authorisation to operate as an investment firm, the Bank may publish notice of the withdrawal or revocation in the Iris Oifigiúil or in one or more newspapers circulating in the State.

Definitions for Regulations 25 to 28

25. In this Regulation and Regulations 26 to 28:

“former authorised investment firm” means a person whose authorisation to operate as an investment firm has been withdrawn or revoked;

“obligations” includes duties and liabilities;

“person responsible”, in relation to a termination process, means the person who is responsible under the law for that process;

“termination process”, in relation to a former authorised investment firm (including a natural person where appropriate), means any -

(a) proceedings relating to the winding-up, dissolution or termination of the firm,

(b) receivership or bankruptcy proceedings of which the firm is the subject, or

(c) any other such proceedings under law under which an assignee or other person becomes responsible for the firm's affairs pending the firm ceasing to carry on business.

Continued responsibilities of former authorised investment firms

26. (1) A former authorised investment firm that is not the subject of any termination process continues to be responsible for arranging the discharge of all liabilities, duties and obligations of the firm existing immediately before announcement of the withdrawal or revocation of the firm's authorisation, unless the Bank states otherwise.

(2) Without limiting the generality of paragraph (1), a former authorised investment firm, whether or not the subject of any termination process, continues to be subject to -

(a) the obligations that were imposed on the firm by these Regulations, in the firm's previous capacity as an authorised investment firm, and

(b) any codes of conduct, rules of conduct, client money requirements and other conditions and requirements that were imposed on the firm by the Bank under these Regulations, in the firms previous capacity as an authorised investment firm.

until all the obligations of the firm have been discharged to the satisfaction of the Bank, to the extent that the obligations pertain to the firm's business as an investment firm before the withdrawal or revocation of the firm's authorisation.

(3) A former authorised investment firm, as soon as possible after the withdrawal or revocation of the firm's authorisation, shall notify the Bank and such other persons as the Bank directs, of the measures proposed to discharge without undue delay the obligations of the firm, to the extent that the obligations pertain to the firm's business as an investment firm before the withdrawal or revocation.

Bank supervision of certain activities of former authorised investment firms

27. (1) If a former authorised investment firm -

(a) has notified the Bank in accordance with Regulation 26(3) and the Bank is of the opinion that the measures proposed are not satisfactory,

(b) has failed to notify the Bank in accordance with Regulation 26(3), or

(c) the Bank is of opinion that the firm has failed to take all reasonable steps to notify persons which under Regulation 26(3) the Bank has directed are to be notified,

then, subject to paragraph (3) of this Regulation, the Bank, by written direction given to the firm, may prohibit the firm for a period, not exceeding 6 months, from doing one or more of the activities set out in paragraph (2) without the prior written approval of the Bank.

(2) The following are the activities referred to in paragraph (1):

(a) creating any liabilities;

(b) dealing with or disposing of any assets or specified assets of the former authorised investment firm in any manner;

(d) making payments.

(3) Having given a written direction under paragraph (1) to a former authorised investment firm, the Bank, by further written direction given to the firm, may require the firm to prepare and submit to the Bank, within 2 months after the initial direction, a scheme for the Bank's approval under which the firm will carry out the orderly discharge in full of the firm's obligations, to the extent that the obligations pertain to the firm's business as an investment firm before the withdrawal or revocation of the firm's authorisation.

(4) Where the Bank gives a direction under paragraph (1) or (3),

(a) the Bank may apply to the Court, on being satisfied that the direction has not been complied with, and

(b) the Court may confirm, vary or set aside the direction on the terms and for the period as the Court thinks fit.

Certain obligations of person responsible during firm's termination process

28. (1) Where a former authorised investment firm is the subject of any termination process, the person responsible is, from the date of the commencement of that process subject to -

(a) the obligations that were imposed on the firm by these Regulations, in the firm's previous capacity as an authorised investment firm, and

(b) any codes of conduct, rules of conduct, client money requirements and other conditions and requirements that were imposed on the firm by the Bank under these Regulations, in the firms previous capacity as an authorised investment firm,

until all the obligations of the firm have been discharged to the satisfaction of the Bank.

(2) The obligations imposed on a person responsible under paragraph (1) are additional to the obligations of that person during the termination process.

(3) Notwithstanding paragraph (1), if the Bank considers it appropriate in the circumstances, the Bank, on giving notice in writing to the person responsible for a former authorised investment firm referred to in paragraph (1) may in writing -

(a) waive any obligations that the Bank, under paragraph (1), imposed on the person responsible, and

(b) impose on the person responsible other obligations which correspond to those set out in paragraph (1).

Part 5 — Regulation and Supervision of Investment Firms

Persons who effectively direct the business

29. (1) Persons who effectively direct the business and the operations of an investment firm must satisfy the Bank that they are -

(a) of sufficiently good repute, and

(b) sufficiently experienced,

so as to ensure the sound and prudent management and operation of the firm.

(2) Where a market operator seeks authorisation to operate an MTF and the persons that effectively direct the business of the MTF are the same as those that effectively direct the business of the regulated market, those persons are deemed to comply with paragraph (1).

(3) An investment firm must notify the Bank of any changes to its management along with all information needed to assess whether persons appointed or to be appointed to manage the firm are of sufficiently good repute and sufficiently experienced.

(4) The Bank shall require that the management of investment firms is undertaken by at least two persons meeting the requirements laid down in paragraph (1).

(5) However, by way of derogation from the paragraph (1), the Bank may grant authorisation to investment firms -

(a) that are natural persons, or

(b) that are legal persons managed by a single natural person,

if the Bank is satisfied that there are arrangements in place which ensure the sound and prudent management of the investment firms.

Shareholders and members with qualifying holdings

30. (1) Where close links exist between the proposed investment firm and other natural or legal persons, the Bank shall grant authorisation only if those links do not prevent the effective exercise of the Bank's supervisory functions.

(2) If the proposed acquirer of any qualifying holding in an investment firm is -

(a) an investment firm, a credit institution, an insurance undertaking or a UCITS management company authorised in another Member State,

(b) the parent undertaking of an investment firm, credit institution insurance undertaking or a UCITS management company authorised in another Member State, or

(c) a person controlling an investment firm, credit institution, insurance undertaking or a UCITS management company authorised in another Member State,

and, if as a result of that acquisition, the undertaking would become the acquirer's subsidiary or come under the acquirer's control, the assessment of the acquisition shall be subject to the prior consultation provided for in Regulation 137.

Membership of an authorised Investor Compensation Scheme

31. The Bank shall seek confirmation from a proposed investment firm that it will meet its obligations under the Investor Compensation Act 1998.

Initial capital endowment

32. The Bank shall not grant authorisation unless the applicant investment firm has sufficient initial capital in accordance with the requirements of EU Directive 2006/49/EC on the capital adequacy of investment firms, having regard to the nature of the investment services a proposed investment firm seeks an authorisation to provide.

Organisational requirements

33. (1) An investment firm shall -

(a) establish adequate policies and procedures sufficient to ensure compliance of the firm and the persons who are the firm's managers employees or tied agents with the firm's obligations under these Regulations,

(b) maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest, as identified under Regulations 74 and 75 from adversely affecting the interests of the firm's clients,

(c) ensure continuity and regularity in the performance of investment services and activities by implementing and carrying out appropriate and proportionate systems, resources and procedures,

(d) ensure that the firm takes reasonable steps to avoid undue additional operational risk when relying on a third party for the performance of operational functions which are critical for -

(i) the provision of continuous and satisfactory service to clients and

(ii) the performance of investment activities on a continuous and satisfactory basis,

(e) ensure that any outsourcing by the firm of important operational functions is not be undertaken in such a way as to impair materially -

(i) the quality of the firm's internal control, or

(ii) the ability of the Bank to monitor the firm's compliance with all of the firm's obligations,

(f) ensure that the firm has in place and uses -

(i) sound administrative and accounting procedures and internal control mechanisms,

(ii) effective risk assessment procedures, and

(iii) effective control and safeguard arrangements for information processing systems,

(g) keep records of all services and transactions undertaken by the firm and ensure that the records are sufficient to enable the Bank to monitor compliance with these Regulations and, in particular, to ascertain whether the firm is complying with its obligations with respect to clients or potential clients,

(h) when holding financial instruments belonging to clients, make adequate arrangements to -

(i) safeguard clients’ ownership rights, especially in the event of the investment firm's insolvency, and

(ii) prevent the use of a client's instruments on own account except with the client's express consent,

(i) when holding funds belonging to clients, make adequate arrangements to safeguard the clients’ rights and, except in the case of credit institutions, prevent the use of client funds for the firm's own account.

(2) If a branch of an investment firm is located in the State, the Bank, without prejudice to the possibility of the competent authority of the home Member State of the firm having direct access to those records, shall enforce paragraph (1)(g) with regard to transactions undertaken by the branch.

Further - business procedures, internal control mechanisms and reporting, etc.

34. (1) An investment firm shall -

(a) establish, implement and maintain decision-making procedures and an organisational structure which clearly and in documented manner specifies reporting lines and allocates functions and responsibilities,

(b) ensure that their relevant persons are aware of the procedures which must be followed for the proper discharge of their responsibilities,

(c) establish, implement and maintain adequate internal control mechanisms designed to secure compliance with decisions and procedures at all levels of the investment firm,

(d) employ personnel with the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them,

(e) establish, implement and maintain effective internal reporting and communication of information at all relevant levels of the investment firm,

(f) maintain adequate and orderly records of their business and internal organisation,

(g) ensure that the performance of multiple functions by their relevant persons does not and is not likely to prevent those persons from discharging any particular function soundly, honestly, and professionally.

(2) In carrying out responsibilities under this Part, an investment firm shall take into account the nature, scale and complexity of the business of the firm, and the nature and range of investment services and activities undertaken in the course of that business.

(3) Investment firms shall establish, implement and maintain -

(a) systems and procedures that are adequate to safeguard the security integrity and confidentiality of information, taking into account the nature of the information in question,

(b) an adequate business continuity policy aimed at ensuring, in the case of an interruption to their systems and procedures, the preservation of essential data and functions, and the maintenance of investment services and activities, or, where that is not possible, the timely recovery of such data and functions and the timely resumption of their investment services and activities,

(c) accounting policies and procedures that enable them, at the request of the Bank, to deliver in a timely manner to the Bank financial reports which reflect a true and fair view of their financial position and which comply with all applicable accounting standards and rules,

(d) adequate policies and procedures designed to detect any risk of failure by the firm to comply with the provisions of these Regulations, as well as the associated risks,

(4) Investment firms shall put in place adequate measures and procedures designed -

(a) to minimise the risks and associated risks referred to in paragraph (3)(d), and

(b) to enable the Bank to exercise its powers effectively under these Regulations.

(5) Investment firms, for the purposes of paragraph (3)(d) and (4), shall take into account the nature, scale and complexity of the business of the firm, and the nature and range of investment services and activities undertaken in the course of that business.

Further - monitoring and evaluating systems, control mechanisms and the like

35. (1) Investment firms shall monitor and, on a regular basis, evaluate the adequacy and effectiveness of -

(a) their systems, internal control mechanisms and arrangements established, implemented or maintained, and

(b) any other things for which the firms are responsible

under Regulation 34, and take appropriate measures to address any deficiencies.

(2) Investment firms shall maintain a permanent and effective compliance function which operates independently and which has the following responsibilities:

(a) to monitor and, on a regular basis, to assess the adequacy and effectiveness of the measures and procedures put in place in accordance with Regulation 34(4), and the actions taken to address any deficiencies in the firm's compliance with its obligations;

(b) to advise and assist the relevant persons responsible for carrying out investment services and activities to comply with the firm's obligations under these Regulations.

(3) In order to enable the compliance function to discharge its responsibilities properly and independently, investment firms shall ensure that the following conditions are satisfied:

(a) the compliance function must have the necessary authority, resources expertise and access to all relevant information;

(b) a compliance officer must be appointed and must be responsible for the compliance function and for any reporting as to compliance required by Regulation 36(2);

(c) the relevant persons involved in the compliance function must not be involved in the performance of services or activities they monitor;

(d) the method of determining the remuneration of the relevant persons involved in the compliance function must not compromise their objectivity and must not be likely to do so.

(4) However, an investment firm shall not be required to comply with paragraph (3)(c) or (d) if the firm is able to demonstrate that in view of -

(a) the nature, scale and complexity of the firm's business, and

(b) the nature and range of the firm's investment services and activities,

the requirement under paragraph (3)(c) or (d) is not proportionate and that its compliance function continues to be effective.

Risk management function

36 (1) Investment firms shall take the following actions:

(a) establish, implement and maintain adequate risk management policies and procedures which identify the risks relating to the firm's activities processes and systems, and where appropriate, set the level of risk tolerated by the firm;

(b) adopt effective arrangements, processes and mechanisms to manage the risks relating to the firm's activities, processes and systems, in light of that level of risk tolerance;

(i) the adequacy and effectiveness of the investment firm's risk management policies and procedures;

(ii) the level of compliance by the investment firm and its relevant persons with the arrangements, processes and mechanisms adopted in accordance with subparagraph (b);

(iii) the adequacy and effectiveness of measures taken to address any deficiencies in those arrangements and procedures including failures by the relevant persons to comply with such arrangements or follow such procedures.

(2) Investment firms, where appropriate and proportionate in view of the nature scale and complexity of their business and the nature and range of the investment services and activities undertaken in the course of that business, shall establish and maintain a risk management function that operates independently and facilitates carrying out the following tasks:

(a) implementation of the policies and procedures referred to in paragraph (1);

(b) provision of reports and advice to senior management in accordance with Regulation 37(5).

(3) Where an investment firm is not required under paragraph (2) to maintain a risk management function that functions independently, the firm must nevertheless be able to demonstrate that the policies and procedures adopted by the firm in accordance with paragraph (1) satisfy the requirements of that paragraph and are consistently effective.

Internal audit function, supervisory function and senior management

37. (1) In this section, “supervisory function” means the function within an investment firm that ensures the proper supervision of the firm's senior management.

(2) An investment firm, where appropriate and proportionate in view of the nature, scale and complexity of firm's business and the nature and range of investment services and activities undertaken in the course of that business, shall establish and maintain an internal audit function that -

(a) is separate and independent from the other functions and activities of the firm, and

(b) ensures the carrying out of the following responsibilities:

(i) to establish, implement and maintain an audit plan to examine and evaluate the adequacy and effectiveness of the investment firm's systems, internal control mechanisms and arrangements;

(ii) to issue recommendations based on the result of work carried out in accordance with subparagraph (i);

(iii) to verify compliance with those recommendations;

(iv) to report in relation to internal audit matters in accordance with paragraph (5).

(3) An investment firm, when allocating functions internally, shall ensure that senior management, and, where appropriate, the persons performing the supervisory function are responsible for ensuring that the firm complies with its obligations under these Regulations.

(4) In particular, an investment firm shall ensure that senior management and where appropriate, the persons performing the supervisory function assess and periodically review the effectiveness of the policies, arrangements and procedures put in place to comply with the obligations under these Regulations and to take appropriate measures to address any deficiencies.

(5) An investment firm shall ensure that the firm's senior management receive on a frequent basis, and at least annually, written reports on the matters covered by Regulations 34(3)(d), 35 and 36, indicating in particular whether the appropriate remedial measures have been taken in the event of any deficiencies.

(6) An investment firm shall ensure that the person in charge of the supervisory function, if any, receives regular written reports on the same matters.

Complaint procedures

38. (1) An investment firm shall -

(a) maintain effective and transparent procedures for the reasonable and prompt handling of complaints received from retail clients or potential retail clients, and

(b) keep a record of each complaint and the measures taken for the resolution of the complaint.

Personal transaction procedures

39. (1) In this Regulation “personal transaction” means a trade in a financial instrument effected by or on behalf of a relevant person, where -

(a) that relevant person is acting outside the scope of the activities the person carries out in that capacity, or

(b) the trade is carried out for the account of any of the following persons:

(i) the relevant person;

(ii) any person with whom the relevant person has a family relationship or has close links;

(iii) a person whose relationship with the relevant person is such that the relevant person has a direct or indirect material interest in the outcome of the trade, other than a fee or commission for the execution of the trade.

(2) In relation to any relevant person who -

(a) is involved in activities that may give rise to a conflict of interest, or

(b) has access to inside information within the meaning of Article 1(1) of Directive 2003/6/EC, or to other confidential information relating to clients or transactions with or for clients by virtue of an activity carried out by the person on behalf of the firm,

an investment firm shall establish, implement and maintain adequate arrangements aimed at preventing the relevant person from doing any of the following activities:

(i) entering into a personal transaction which meets at least one of the following criteria:

(I) Directive 2003/6/EC prohibits the person from entering into the transaction;

(II) the transaction involves the misuse or improper disclosure of the inside information or confidential information;

(III) the transaction conflicts or is likely to conflict with an obligation of the investment firm under these Regulations;

(ii) other than in the proper course of the relevant person's employment or contract for services, advising or procuring, any other person to enter into a transaction in financial instruments which, if a personal transaction of the relevant person, would be covered by subparagraph (i) of this paragraph, Regulation 155 (2)(a) or (b) or Regulation 107(3 and (4);

(iii) without prejudice to Article 3(a) of Directive 2003/6/EC, disclosing other than in the normal course of employment or contract for services any information or opinion to any other person if the relevant person knows, or reasonably ought to know, that as a result of that disclosure the other person will or would be likely to take either of the following steps:

(I) entering into a transaction in financial instruments which, if a personal transaction of the relevant person, would be covered by subparagraph (i) of this paragraph, Regulation 155 (2)(a) or (b) or Regulation 107(3) and (4);

(II) advising or procuring another person to enter into such a transaction.

(3) Without prejudice to the generality of paragraph (2), an investment firm must ensure that the arrangements required under paragraph (2) are, in particular, designed so that -

(a) a relevant person to which paragraph (2) applies is aware of

(i) the restrictions on personal transactions, and

(ii) the measures established by the investment firm in connection with personal transactions and disclosure, in accordance with that paragraph,

(b) the firm is informed promptly of any personal transaction entered into by a relevant person, either by notification of that transaction or by other procedures enabling the firm to identify such transactions, and

(c) a record is made of the personal transaction notified to the firm or identified by it, including any authorisation or prohibition in connection with such a transaction.

(4) Paragraphs (2) and (3) do not apply to the following kinds of personal transaction:

(a) personal transactions effected under a discretionary portfolio management service where there is no prior communication in connection with the transaction between the portfolio manager and the relevant person or other person for whose account the transaction is executed;

(b) personal transactions in units in collective undertakings that -

(i) comply with the conditions necessary to enjoy the rights conferred by Directive 85/611/EEC, or

(ii) are subject to supervision under law which requires an equivalent level of risk spreading in the undertaking's assets,

where the relevant person and any other person for whose account the transactions are effected is not involved in the management of that undertaking.

Retention of records

40. (1) Investment firms shall retain -

(a) all the records required under these Regulations for a period of at least 5 years, and

(b) records which set out

(i) the respective rights and obligations of the firm and the client under an agreement to provide services, or

(ii) the terms on which the firm provides services to the client,

for at least the duration of the relationship with the client.

(2) However, the Bank, in exceptional circumstances, may require investment firms to retain any or all of the records referred to in paragraph (1) for such longer period as is justified by the nature of the instrument or transaction, if that is necessary to enable the Bank to exercise its supervisory functions under these Regulations.

(3) Following the termination of the authorisation of an investment firm, the Bank may require the firm to retain records for the balance of the period required under paragraph (1).

(4) The investment firm or former investment firm shall ensure that the records are retained in a durable medium, and in such a form and manner that the following conditions are met:

(a) the Bank must be able to access the records readily and to reconstitute each key stage of the processing of each transaction;

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

(5) The Bank shall prepare and maintain a list of the minimum records investment firms are required to keep under these Regulations.

(6) Record-keeping obligations under these Regulations are without prejudice to the right of the Bank, following consultation with the Minister and other interested parties, to impose obligations on investment firms relating to the recording of telephone conversations or electronic communications involving client orders.

Trading process and finalisation of transactions in an MTF

41. (1) Without prejudice to the application of Regulation 33 to investment firms when operating an MTF, an investment firms or a market operator shall -

(a) establish -

(i) transparent and non-discretionary rules and procedures for fair and orderly trading, and

(ii) objective criteria for the efficient execution of orders,

(b) establish transparent rules regarding the criteria for determining the financial instruments that can be traded within their systems,

(c) satisfy the Bank that there is access to sufficient publicly available information to enable the users of the MTF to form an investment judgement, taking into account both the nature of the users and the types of instruments traded,

(d) establish and maintain transparent rules, based on objective criteria governing access to the MTF facility and ensure that the rules comply with the conditions and requirements established under Regulation 66,

(e) clearly inform the users of the MTF of their respective responsibilities for the settlement of the transactions executed in that facility,

(f) ensure that the necessary arrangements are in place in order to facilitate the efficient settlement of the transactions concluded under the systems of the MTF,

(g) comply without delay with any instruction from the Bank to suspend or remove a financial instrument from trading.

(2) Regulations 76, 106 and 108 are not applicable to the transactions concluded under the rules governing an MTF between its members or participants, or between the MTF and its members or participants in relation to the use of the MTF.

(3) However, the members of, or participants in, the MTF shall comply with Regulations 76, 106 and 108 with respect to their clients when the members or participants on behalf of their clients, execute the clients’ orders within the systems of an MTF.

(4) Where a transferable security, which has been admitted to trading on a regulated market, is also traded on an MTF without the consent of the issuer of the transferable security, that issuer is not subject to any obligation relating to initial, ongoing or ad hoc financial disclosure with regard to the trades on that MTF.

Relations with third countries

42. (1) The Bank shall inform the European Commission of any general difficulties which investment firms encounter in establishing themselves or providing investment services or performing investment activities in any third country.

(2) The Bank shall cooperate with the European Commission on matters relating to third countries pertaining to the Directive.

Part 6 - Regulated Markets

Authorisation and applicable law

43. (1) An authorisation under these Regulations to operate a regulated market shall be -

(a) reserved to a person using, for the operation of the regulated market, a system which complies with these Regulations, and

(b) granted only if the person satisfies the Bank that both the person, as market operator, and the system comply at least with this Part.

(2) In the case of a regulated market that -

(a) is a legal person, and

(b) is operated by a market operator other than the regulated market itself,

the Bank shall establish how the obligations imposed on the market operator under these Regulations are to be allocated between the regulated market and the market operator.

(3) Without prejudice to any relevant provisions of Directive 2003/6/EC on insider dealing and market manipulation, the trading conducted under the systems of a regulated market established in the State are governed by Irish law.

Trading under regulated markets subject to Irish law

44. Without prejudice to any relevant provisions of Directive 2003/6/EC on insider dealing and market manipulation, the trading conducted under the systems of a regulated market established in the State are governed by Irish law.

Market operator's responsibility for establishing regulated market

45. (1) The market operator of a regulated market shall provide all information including a programme of operations setting out, inter alia, the types of business envisaged and the organisational structure, necessary to enable the Bank to satisfy itself that the regulated market has established, at the time of initial authorisation, all the necessary arrangements to meet its obligations under this Part.

(2) The market operator of a regulated market shall perform tasks relating to the organisation and operation of the regulated market under the supervision of the Bank.

(3) The market operator of a regulated market -

(a) is responsible for ensuring that the regulated market operated by the market operator is in compliance with this Part, and

(b) is entitled to exercise the rights conferred by these Regulations in respect of the regulated market.

Regular review by Bank of market operators and regulated markets

46. The Bank shall -

(a) keep under regular review the compliance with this Part of market operators and of regulated markets operated by them, and

(b) monitor regulated markets to ensure compliance with the conditions and requirements for initial authorisation.

Application to Bank for an authorisation to operate a regulated market

47. (1) The Bank -

(a) may grant or refuse to grant to any person applying to it under these Regulations an authorisation to operate a regulated market, and

(b) shall not grant an authorisation under subparagraph (a) unless satisfied that the applicant complies with these Regulations.

(2) The grant of an authorisation under paragraph (1) may be given -

(a) unconditionally, or

(b) as the Bank considers fit, subject to conditions or requirements.

(3) If the Bank decides under paragraph (1) to refuse to grant an authorisation for an applicant to operate a regulated market, the Bank shall promptly serve notice on the applicant of the Bank's decision, stating the reasons for the refusal.

(4) An application for authorisation under paragraph (1) shall be in the form and contain or be accompanied by the records and information as the Bank may specify including but not limited to all or any of the following:

(a) particulars of the type of business to be carried on or likely to be carried on by the market operator of the proposed regulated market, or by the proposed regulated market if it is a legal person and will itself operate its own business as a regulated market;

(b) information about any person or persons having a qualifying shareholding or having control or ownership of the market operator of the proposed regulated market, including but not limited to any natural or legal person whose shareholding in or other commercial relationship with the person who will be the market operator might influence the latter's conduct to a material degree;

(c) where relevant, a certified copy of the memorandum of association and articles of association of the market operator of the proposed regulated market.

Prerequisites to granting authorisations for regulated markets

48. Without limiting the generality of Regulation 47(1), the Bank shall not grant an authorisation under that Regulation to operate a regulated market, unless satisfied -

(a) that the proposed market operator is a company incorporated by statute or under the Companies Acts,

(b) where relevant, that the memorandum of association and articles of association or other constituting documents of the proposed market operator contain sufficient provision so as to enable the market operator to operate in accordance with -

(i) these Regulations, and

(ii) any condition or requirement as the Bank may impose, and

(d) as to the probity and competence of each of the proposed market operator's directors and managers,

(e) as to the suitability of each shareholder of the proposed market operator who would have a qualifying holding,

(f) as to the organisational structure and management skills of the proposed market operator and that adequate levels of staff and expertise will be employed to carry out the market operator's proposed activities,

(g) that the proposed market operator has and will follow established procedures to enable -

(i) the Bank to be supplied with all information necessary for the Bank's supervisory functions, and

(ii) the public to be supplied with any information which the Bank may specify,

(h) that the organisation of the proposed market operator's business structure is such that the proposed market operator and any associated or related undertakings are capable of being supervised adequately by the Bank, and

(i) as to the conduct of -

(i) the proposed market operator's business and financial resources, and

(ii) any other matters,

as the Bank considers necessary in the interests of the proper and orderly regulation and supervision of market operators and regulated markets or in the interests of the protection of investors.

Bank may obtain further information from applicant by request, inquiry or investigation

49. (1) At any time before the grant or refusal of an authorisation under Regulation 47(1), the Bank may -

(a) request the applicant to supply further information and records relating to the proposed regulated market or its proposed market operator, or

(b) instruct an authorised officer to -

(i) make inquiries, or

(ii) carry out investigations

in accordance with these Regulations and as necessary for the purpose of properly evaluating an application

Time frame for granting or refusing applications for authorisations for regulated markets

50. (1) The applicant under Regulation 47(1) for an authorisation to operate a proposed regulated market shall be informed whether or not an authorisation has been granted—

(a) within 6 months after the date of receipt of the complete application, or

(b) where additional information in relation to the application has been sought by the Bank, within -

(i) 6 months after the receipt by the Bank of the additional information, or

(ii) 12 months after the receipt by the Bank of the complete application,

whichever is the sooner.

(2) If the applicant under Regulation 47(1) does not provide a complete application to the Bank, as required under Regulations 47 to 49, within the 12 months referred to in paragraph (1), the Bank may refuse the application.

Regulated markets - management, structure, control

51. (1) The Bank may require that an appointment with the market operator of a regulated market as a director, as chief executive, as manager or as the holder of an equivalent position, shall be subject to the prior approval in writing of the Bank.

(2) The prior approval in writing or the Bank under paragraph (1) may not be granted unless the market operator of a regulated market satisfies the Bank as to the probity and competence of the proposed appointee.

(3) The Bank may direct the market operator of a regulated market to alter the market operator's memorandum of association, articles of association or other constituting documents in the interest of the proper and orderly regulation and supervision of market operators, regulated markets or the protection of investors.

(4) The Bank may impose requirements on the market operator of a regulated market to organise the business, corporate structure or control of any associated undertaking or related undertaking not supervised by the Bank such that -

(a) when authorised under these Regulations, the market operator and the regulated market operated by it, and

(b) where appropriate and practicable, the business of any associated undertaking or related undertaking, either collectively or individually,

is capable of being supervised to the satisfaction of the Bank under these Regulations.

Prohibition against false or misleading application to operate regulated market

52. A person shall not knowingly or recklessly -

(a) apply under this Regulation for an authorisation to operate a regulated market using false or misleading information, or

(b) make false or misleading statements to the Bank in relation to an application for -

(i) an authorisation under this Regulation to operate a regulated market, or

(ii) an approval or permission from the Bank concerning the operation of a regulated market.

Withdrawal of authorisations for regulated markets

53. (1) The Bank may withdraw an authorisation granted under Regulation 47 to operate a regulated market if the market operator of the regulated market -

(a) does not make use of the authorisation within 12 months after the date the authorisation was granted;

(b) expressly renounces the authorisation;

(d) no longer meets the conditions under which the authorisation was granted or the prerequisites to authorisation listed in Regulation 48(a to (i);

(e) is being wound up; or

(f) has seriously or systematically infringed the provisions of these Regulations governing the operation of regulated markets;

(2) Other than in the circumstances outlined in paragraph (1)(a), the Bank may withdraw an authorisation, granted under Regulation 47(1), to operate a regulated market if the regulated market has not been in operation for the immediately preceding 6 months.

Bank may apply to Court for order revoking authorisation

54. (1) Without prejudice to the power of the Bank under Regulation 53 to withdraw an authorisation, the Bank may apply to the Court in a summary manner for an order revoking an authorisation to operate a regulated market if the revocation is expedient -

(a) in the interests of the proper and orderly regulation and supervision of the market operator and the regulated market,

(b) in order to protect investors, or

(2) The circumstances referred to in paragraph (1) are as follows:

(a) the market operator has been convicted on indictment of any offence -

(i) under these Regulations,

(ii) under any enactment or Regulation under which the Bank exercises statutory functions, or

(iii) involving fraud, dishonesty or breach of trust;

(b) circumstances have materially changed since the granting of the authorisation such that, if an application for the authorisation were made at the time of the application to the Court, a different decision would be taken in relation to the application for authorisation;

(i) making false or misleading statements, or

(ii) using false or misleading information;

(d) the market operator has systematically failed to comply with a condition or requirement of these Regulations;

(e) the market operator has failed to comply to a material degree with a condition or requirement of these Regulations;

(f) the market operator no longer fulfils one or more of the conditions or requirements which were -

(i) imposed when the authorisation was granted, or

(ii) were subsequently imposed;

(g) the market operator -

(i) no longer complies with capital or any other financial requirements specified by the Bank, or

(ii) is not maintaining, or is unlikely to be able to maintain, having regard to the nature and volume of the firm's business adequate capital resources or adequate other financial resources;

(h) the market operator becomes unable or, in the opinion of the Bank, is likely to become unable, to meet the market operator's obligations to its creditors or suspends payments lawfully due;

(i) the market operator has infringed to a material degree a code of conduct or rules of conduct specified in or set out under Regulation 79;

(j) a director, manager or qualifying shareholder of the market operator no longer satisfies the Bank as to the matters specified in Regulation 48 (d) or (e);

(k) the market operator -

(i) has failed to comply with a condition, requirement or direction imposed under these Regulations, and

(ii) the circumstances are such that the Bank is of the opinion that the stability and soundness of the market operator or the regulated market is or has been materially affected by the non-compliance;

(l) the market operator has so organised its business or corporate structure or the business or corporate structure of the regulated market that -

(i) the market operator or the regulated market, and,

(ii) where appropriate, any related undertaking or associated undertaking,

either collectively or individually, is no longer capable of being supervised to the satisfaction of the Bank under these Regulations.

(3) On an application to the Court under this Regulation, the Court may make interim or interlocutory orders as it thinks fit in the circumstances.

(4) An application to the Court under this Regulation or under Regulation 59 may be heard otherwise than in public.

(5) The Bank shall not apply to the Court to revoke an authorisation on the grounds set out in paragraph (2)(j) unless the Bank has given the regulated market an opportunity to -

(a) remove the director, manager or qualifying shareholder, or

(b) otherwise deal with the concerns of the Bank in relation to the probity or competence of the person concerned,

within such period of time as the Bank may specify.

Bank to give notice of proposed withdrawal or revocation of authorisation

55. When the Bank proposes to withdraw an authorisation to operate a regulated market or to apply to the Court for an order to revoke an authorisation to operate a regulated market the Bank shall -

(a) serve notice on the operator of the regulated market of the Bank's intention, and

(b) state its reasons in the notice.

Publication of withdrawal or revocation of authorisation

56. Within 28 days after withdrawal or revocation of an authorisation to operate a regulated market, the Bank may publish notice of the withdrawal or revocation in the Iris Oifigiúil or in one or more newspapers circulating in the State.

Definitions for Regulations 57 to 60

57. In this Regulation and Regulations 58 to 60:

“former market operator” means a person whose authorisation to operate a regulated market has been withdrawn or revoked;

“obligations” includes duties and liabilities;

“person responsible”, in relation to a termination process, means the person who is responsible under the law for that process;

“termination process”, in relation to a former market operator (including a natural person where appropriate), means any -

(a) proceedings relating to the winding-up, dissolution or termination of the market operator,

(b) receivership or bankruptcy proceedings of which the firm is the subject, or

(c) any other such proceedings under law under which an assignee or other person becomes responsible for the market operator's affairs pending the market operator ceasing to carry on business.

Continued responsibilities of former market operators

58. (1) A former market operator that is not the subject of any termination process continues to be responsible for arranging the discharge of all liabilities, duties and obligations of the firm existing immediately before announcement of the withdrawal or revocation of the firm's authorisation, unless the Bank states otherwise.

(2) Without limiting the generality of paragraph (1), a former market operator whether or not the subject of any termination process, continues to be subject to -

(a) the obligations that were imposed on the firm by these Regulations, in the operator's previous capacity as an authorised market operator, and

(b) any codes of conduct, rules of conduct, client money requirements and other conditions and requirements that were imposed on the operator by the Bank under these Regulations, in the operator's previous capacity as an authorised market operator,

until all the obligations of the operator have been discharged to the satisfaction of the Bank to the extent that the obligations pertain to the operator's business as a market operator before the withdrawal or revocation of the operator's authorisation.

(3) A former market operator, as soon as possible after the withdrawal or revocation of the operator's authorisation, shall notify the Bank and such other persons as the Bank directs, of the measures being taken to discharge without undue delay the obligations of the operator, to the extent that the obligations pertain to the operator's business as a market operator before the withdrawal or revocation.

Bank supervision of certain activities of former market operators

59. (1) If a former market operator -

(a) has notified the Bank in accordance with Regulation 58(3) and the Bank is of the opinion that the measures referred to in that provision that are proposed to be taken are not satisfactory,

(b) has failed to notify the Bank in accordance with Regulation 58(3), or

(c) the Bank is of the opinion that the operator has failed to take all reasonable steps to notify persons which under Regulation 58(3) the Bank has directed are to be notified,

then, subject to paragraph (3) of this Regulation, the Bank by written direction given to the former market operator may prohibit the operator for a period, not exceeding 6 months, from doing one or more of the activities set out in paragraph (2) without the prior authorisation of the bank.

(2) The following are the activities referred to in paragraph (1):

(a) creating any liabilities,

(b) dealing with or disposing of any assets or specified assets of the former regulated market in any manner,

(d) making payments.

(3) Having given a written direction under paragraph (1) to a former market operator, the Bank, by further written direction given to the operator, may require the operator to prepare and submit to the Bank, within 2 months after the initial direction, a scheme for the Bank's approval under which the operator will carry out the orderly discharge in full of the operator's obligations, to the extent that the obligations pertain to the firm's business as a market operator before the withdrawal or revocation of the operator's authorisation.

(4) Where the Bank gives a direction under paragraph (1) or (3),

(a) the Bank may apply to the Court, on being satisfied that the direction has not been complied with, and

(b) the Court may confirm, vary or set aside the direction on the terms and for the period as the Court thinks fit.

Certain obligations of former market operators during operator's termination process

60. (1) Where a former authorised market operator is the subject of any termination process, the person responsible is, from the date of the commencement of that process subject to -

(a) the obligations that were imposed on the operator by these Regulations, in the operator's previous capacity as an authorised market operator, and

(b) any conditions and requirements that were imposed on the operator by the Bank under these Regulations, in the operator's previous capacity as an authorised market operator,

until all the obligations of the operator have been discharged to the satisfaction of the Bank.

(2) The obligations imposed on a person responsible under paragraph (1) are additional to the obligations of that person during the termination process.

(3) Notwithstanding paragraph (1), if the Bank considers it appropriate in the circumstances, the Bank, on giving notice in writing to the person responsible for a former authorised market operator referred to in paragraph (1) may in writing -

(a) waive any obligations that the Bank, under paragraph (1), imposed on the person responsible, and

(b) impose on the person responsible other obligations which correspond to those set out in paragraph (1).

Requirements for the management and operation of the regulated market

61. (1) Persons who effectively direct the business and the operations of a regulated market must satisfy the Bank that they are sufficiently -

(a) of good repute, and

(b) experienced,

so as to ensure the sound and prudent management and operation of the regulated market.

(2) The market operator of a regulated market shall -

(a) inform the Bank of the identity of the persons who effectively direct the business and the operations of the regulated market, and

(b) notify the Bank before any changes to this information,

(c) satisfy the Bank that the persons are fit and proper persons to occupy their positions and responsibilities in that regard.

(3) The Bank may refuse to approve proposed changes if the Bank is of the opinion that the persons identified in any notification to it pose a material threat to the sound and prudent management and operation of the regulated market.

(4) The person or persons who effectively direct the business and the operations of an approved stock exchange immediately before 1 November 2007 are deemed to be in compliance with paragraph (1) as of the 1 November 2007.

(5) The Bank shall refuse authorisation if -

(a) not satisfied that the persons who will effectively direct the business of the regulated market are of sufficiently good repute or sufficiently experienced, or

(b) there are objective and demonstrable grounds for believing that proposed changes to the management of the firm pose a threat to its sound and prudent management.

(6) The market operator of a regulated market shall ensure that the management of a regulated market is in the charge of at least 2 persons who are in compliance with paragraph (1).

Requirements relating to persons exercising significant influence over the management of the regulated market

62. (1) The market operator of a regulated market must satisfy the Bank that the persons who are in a position to exercise significant influence over the management of the regulated market are suitable.

(2) The market operator of a regulated market shall -

(a) provide the Bank with all information as the Bank may request regarding -

(i) the ownership of the regulated market,

(ii) the market operator, and

(iii) the identity and scale of interests of any parties in a position to exercise significant influence over the management of the regulated market,

(b) inform the Bank of any transfer of ownership which gives rise to a change in the identity of the persons exercising significant influence over the operation of the regulated market, and

(c) make public the information referred to in subparagraphs (a) and (b) in the manner and at the times as the Bank may direct.

(3) The Bank may refuse to approve proposed changes to the controlling interests of the market operator of a regulated market if the Bank is of the opinion that the proposed changes pose a material threat to the sound and prudent management and operation of the market operator of the regulated market.

Organisational requirements

63. The market operator of a regulated market shall -

(a) have and maintain arrangements to identify clearly and manage the potential adverse consequences for the operation of the regulated market or for participants in the regulated market of any conflict of interest between -

(i) the interest of the regulated market, its owners or its operator and

(ii) the sound functioning of the regulated market,

in particular where the conflict might prove prejudicial to the accomplishment of any functions delegated to the regulated market by the Bank;

(b) be adequately equipped to -

(i) manage the risks to which the regulated market is exposed,

(ii) implement appropriate arrangements and systems to identify all significant risks to its operation, and

(iii) put in place effective measures to mitigate those risks;

(c) have arrangements for the sound management of the technical operations of the system, including the establishment of effective contingency arrangements to cope with risks of systems disruptions;

(d) have transparent and non-discretionary rules and procedures that provide for fair and orderly trading and establish objective criteria for the efficient execution of orders;

(e) have effective arrangements to facilitate the efficient and timely finalisation of transactions executed under its systems;

(f) have available, at the time of authorisation and on an ongoing basis sufficient financial resources to facilitate its orderly functioning having regard to the nature and extent of the transactions concluded on the market and the range and degree of the risks to which it is exposed.

Admission of financial instruments to trading

64. (1) The market operator of a regulated market shall establish and maintain clear and transparent rules regarding the admission of financial instruments to trading, in order to ensure that financial instruments admitted to trading in a regulated market -

(a) are capable of being traded in a fair, orderly and efficient manner, and

(b) in the case of transferable securities, are freely negotiable.

(2) In the case of derivatives, the market operator of a regulated market shall ensure in particular that the design of the derivative contract allows for its orderly pricing as well as for the existence of effective settlement conditions.

(3) In addition to the obligations set out in paragraphs (1) and (2), the market operator of a regulated market shall establish and maintain effective arrangements-

(a) to verify that issuers of transferable securities that are admitted to trading on the regulated market comply with the issuers’ initial ongoing and ad hoc disclosure obligations, and

(b) which facilitate the regulated market's members or participants in obtaining access to information which has been made public under Community law.

(4) The market operator of a regulated market shall establish the necessary arrangements to review regularly the compliance with the admission requirements of the financial instruments which the regulated market admits to trading.

(5) A transferable security that has been admitted to trading on a regulated market can subsequently be admitted to trading on other regulated markets -

(a) without the consent of the issuer, and

(b) in compliance with the relevant provisions of EU Directive 2003/71/EC in relation to the prospectus to be published when securities are -

(i) offered to the public, or

(ii) admitted to trading.

(6) The regulated market shall inform the issuer of the fact that the issuer's securities are traded on that regulated market.

(7) The issuer is not subject to any obligation to provide information required under paragraph (3) directly to any regulated market which has admitted the issuer's securities to trading without the issuer's consent.

Suspension and removal of instruments from trading

65. (1) The market operator of a regulated market may suspend or remove from trading a financial instrument which no longer complies with the rules of the regulated market unless doing so would likely cause significant damage to -

(a) the investors’ interests, or

(b) the orderly functioning of the market.

(2) Without prejudice to paragraph (1), the Bank may direct the suspension or removal of an instrument from trading.

(3) The market operator of a regulated market that suspends or removes from trading a financial instrument shall without delay -

(a) make public the suspension or removal, and

(b) communicate all relevant information to the Bank

and the Bank shall inform the competent authorities of the other Member States.

(4) Where the Bank directs the suspension or removal of a financial instrument from trading on one or more regulated markets the Bank shall without delay -

(a) make public its decision, and

(b) inform the competent authorities of the other Member States.

(5) Where the Bank is informed by the competent authority of another Member State of the suspension or removal of a financial instrument from trading on one or more regulated markets, the Bank shall direct the suspension or removal of that financial instrument from trading -

(a) on the regulated markets in the State, and

(b) on MTFs that operate under the authority of one or more of those regulated markets,

unless doing so could cause significant damage to -

(i) the investors’ interests. or

(ii) the orderly functioning of the markets.

Access to the regulated market

66. (1) The market operator of a regulated market shall establish and maintain transparent and non-discriminatory rules, based on objective criteria, governing access to or membership of the regulated market.

(2) The market operator of a regulated market shall ensure that its rules specify any obligations for the members or participants arising from any or all of the following:

(a) the constitution and administration of the regulated market;

(b) rules relating to transactions on the market;

(c) professional standards imposed on the staff of the investment firms or credit institutions that are operating on the market;

(d) the conditions established, for members or participants other than investment firms and credit institutions, under paragraph (3) of this Regulation;

(e) the rules and procedures for the clearing and settlement of transactions concluded on the regulated market.

(3) The market operator of a regulated market may only admit as members of or participants in the regulated market, investment firms, credit institutions authorised under Directive 2006/48/EC and other persons who, in the opinion of the regulated market,

(a) are fit and proper,

(b) have a sufficient level of trading ability and competence,

(d) have sufficient resources for the role they are to perform, taking into account the different financial arrangements that the regulated market may have established in order to guarantee the adequate settlement of transactions.

(4) Without prejudice to the obligations, provided for in Regulations 76, 106 and 108, of a member of, or a participant in, a regulated market to a client on whose behalf the member or participant executes orders in that market, the obligations under those Regulations do not apply to transactions concluded on that market between the member and the participant.

(5) The rules on access to or membership of a regulated market shall provide for the direct or remote participation of investment firms and credit institutions.

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