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

Investment firm's responsibilities respecting outsourcing to service provider

105. (1) Where an investment firm outsources critical or important operational functions or any investment services or activities, the firm remains fully responsible for discharging all of the firm's obligations under these Regulations and for complying, in particular, with the following conditions:

• (a) the outsourcing must not result in the delegation by senior management of its responsibility;

• (b) the relationship and obligations of the investment firm towards its clients under the terms of these Regulations must not be altered;

• (c) the conditions with which the investment firm must comply in order to be authorised in accordance with Part 4, and to remain so, must not be undermined;

• (d) none of the other conditions subject to which the firm's authorisation was granted must be removed or modified.

• (2) An investment firm shall exercise due skill and care and diligence when entering into, managing or terminating any arrangement for the outsourcing to a service provider of -

• (a) critical or important operational functions, or

• (b) any investment services or activities.

• (3) Without prejudice to the generality of paragraph (1), an investment firm shall take the necessary steps to ensure that the following conditions are satisfied:

• (a) the service provider must have the ability, capacity, and any authorisation required by law to perform the outsourced functions services or activities reliably and professionally;

• (b) the service provider must carry out the outsourced services effectively and to this end the firm must establish methods for assessing the standard of performance of the service provider;

• (c) the service provider must properly supervise the carrying out of the outsourced functions, and adequately manage the risks associated with the outsourcing;

• (d) appropriate action must be taken if it appears that the service provider may not be carrying out the functions effectively and in compliance with applicable laws and regulatory requirements;

• (e) the investment firm must retain the necessary expertise to supervise the outsourced functions effectively and manage the risks associated with the outsourcing and must supervise those functions and manage those risks;

• (f) the service provider must disclose to the investment firm any development that may have a material impact on its ability to carry out the outsourced functions effectively and in compliance with applicable laws and regulatory requirements;

• (g) the investment firm must be able to terminate the arrangement for outsourcing where necessary without detriment to the continuity and quality of its provision of services to clients;

• (h) the service provider must, when required, cooperate with the Bank in connection with the outsourced activities;

• (i) the investment firm, its auditors and the Bank must have effective access to data related to the outsourced activities, as well as to the business premises of the service provider; and the Bank must be able to exercise those rights of access;

• (j) the service provider must protect any confidential information relating to the investment firm or its clients;

• (k) the investment firm and the service provider must establish, implement and maintain a contingency plan for disaster recovery and periodic testing of backup facilities, where that is necessary having regard to the function, service or activity that has been outsourced.

• (4) The respective rights and obligations of the investment firm and of the service provider shall be clearly allocated and set out in a written agreement.

• (5) Where the investment firm and the service provider are members of the same group, the investment firm, for the purposes of complying with this Regulation may take into account the extent to which the firm controls the service provider or has the ability to influence its actions.

• (6) An investment firm shall make available on request to the Bank all information necessary to enable the Bank to supervise the compliance of the performance of the outsourced activities with the requirements of these Regulations.

• (7) In addition to the requirements set out in paragraphs (1) to (6), in situations where an investment firm outsources the investment service of portfolio management provided to retail clients to a service provider located in a third country, that investment firm shall ensure that the following conditions are satisfied:

• (a) the service provider must be authorised or registered in its home country to provide that service and must be subject to prudential supervision;

• (b) there must be an appropriate cooperation agreement between the competent authority of the investment firm and the supervisory authority of the service provider.

• (8) Where one or both of those conditions mentioned in paragraph (7) are not satisfied, an investment firm may outsource investment services to a service provider located in a third country only if -

• (a) the firm gives prior notification to the Bank about the outsourcing arrangement, and

• (b) the Bank does not object to that arrangement within a reasonable time following receipt of that notification.

• (9) Without prejudice to paragraph (8), the Bank shall publish a statement of policy in relation to outsourcing covered by paragraph (8),

• (a) setting out examples of cases where the Bank would not, or would be likely not to, object to an outsourcing under paragraph (8).

• (b) explaining why the Bank considers that in such cases outsourcing would not impair the ability of an investment firm to fulfill the firm's obligations under this Regulation.

• (10) The Bank shall publish a list of the supervisory authorities in third countries with which the Bank has cooperation agreements that are appropriate for the purposes of paragraph (7)(b).

Obligation to execute orders on terms most favourable to the client

106. (1) When executing orders, an investment firm shall -

• (a) take all reasonable steps to obtain the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature and any other consideration relevant to the execution of the order, and

• (b) notwithstanding subparagraph (a), whenever there is a specific instruction from the client the investment firm shall execute the order in line with the specific instruction.

• (2) Every investment firm shall establish and implement effective arrangements for complying with paragraph (1) including but not limited to establishing and implementing an order execution policy that conforms to paragraphs (3) to (6) in order to facilitate obtaining, for its client orders, the best possible results.

• (3) An investment firm shall -

• (a) ensure that its order execution policy includes, for each class of financial instruments, information about -

• (i) the venues where the investment firm executes its client orders and

• (ii) the factors affecting the choice of each of the venues,

including but not limited to information explaining how, in its opinion the use of those venues contributes to enabling the investment firm to consistently obtain the best possible result for the execution of client orders,

• (b) provide other appropriate information to its clients on the firm's order execution policy, and

• (c) obtain the prior consent of the firm's clients to the execution policy.

• (4) Where an order execution policy provides for the possibility that client orders may be executed outside a regulated market or an MTF, the investment firm shall -

• (a) inform its clients of that fact, and

• (b) obtain the prior consent of its clients, either in the form of a general agreement or for individual transactions, before proceeding to execute the client's orders outside a regulated market or an MTF.

• (5) An investment firm shall -

• (a) regularly monitor the effectiveness of its order execution arrangements and execution policy,

• (b) assess whether the execution venues included in the order execution policy provide for the best possible result for their clients,

• (c) make any changes necessary to comply with paragraphs (1) and (2) and

• (d) notify the firm's clients of any material changes to the firm's order execution arrangements or its execution policy.

• (6) An investment firm shall demonstrate to the Bank and shall demonstrate to the firm's clients, at the clients’ request, that the firm has executed their orders in accordance with the firm's execution policy.

Client order handling by investment firms

107. (1) An investment firm shall satisfy the following conditions when carrying out client orders:

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

• (b) the firm must 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) the firm must inform a retail client in advance about any material difficulty relevant to the proper carrying out of orders.

• (2) Where an investment firm is responsible for overseeing or arranging the settlement of an executed order, it shall take all reasonable steps to ensure that any client financial instruments or client funds received in settlement of that executed order are promptly and correctly delivered to the account of the appropriate client.

• (3) An investment firm shall not misuse information relating to pending client orders.

• (4) An investment firm shall take all reasonable steps to prevent the misuse by any of the firm's relevant persons of information relating to pending client orders.

• (5) An investment firm shall not perform a client order in aggregation with another client order unless the following conditions are met:

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

• (b) it must be 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 must be established and effectively implemented, providing in sufficiently precise terms for the fair allocation of aggregated orders and transactions, and in particular in terms of how the volume and price of orders relates to how they will be allocated in each case.

• (6) In situations where an investment firm aggregates an order with one or more other client orders and the aggregated order is partially executed, the firm shall allocate the related trades in accordance with the firm's order allocation policy.

• (7) An investment firm which have aggregated transactions for own account with one or more client orders shall not allocate the related trades in a way that is detrimental to a client.

• (8) In situations where an investment firm aggregates a client order with a transaction for own account and the aggregated order is partially executed, the firm shall allocate the related trades to the client in priority to the firm.

• (9) However, if the investment firm is able to demonstrate on reasonable grounds that without the aggregation of the order with the transaction for own use, the firm would not have been able to carry out the order on such advantageous terms, or at all, the firm may allocate the transaction for own account proportionally, in accordance with its order allocation policy referred to in paragraph (5)(c).

• (10) An investment firm shall put in place procedures to prevent the reallocation, in a way that is detrimental to the client, of transactions for own account which are executed in combination with client orders.

Client order handling rules

108. (1) An investment firm authorised to execute orders on behalf of clients shall implement procedures and arrangements which -

• (a) which provide for the prompt, fair and expeditious execution of client orders by that investment firm,

• (i) relative to other client orders, or

• (ii) the trading interests

of that investment firm, and

• (b) provide for the execution of comparable client orders in accordance with the time of their receipt by the investment firm.

• (2) In the case of a client limit order that -

• (a) is for shares admitted to trading on a regulated market, and

• (b) is not immediately executed under prevailing market conditions,

unless the client otherwise expressly instructs the investment firm concerned, the firm shall take measures to facilitate the earliest possible execution of the order by making the order public without delay, in a manner easily accessible to other market participants.

• (3) An investment firm is deemed to comply with paragraph (2) if the firm transmits the client limit order to a regulated market or an MTF.

• (4) The Bank may waive an obligation under this Regulation to make public a limit order that is large in scale compared with normal market size, as determined under Commission Regulation (EC) No. 1287/2006.

Obligations of investment firms when appointing tied agents

109. (1) An investment firm may appoint persons as tied agents for the purposes of -

• (a) promoting the services of the firm,

• (b) soliciting business or receiving orders from clients or potential clients and transmitting them,

• (c) placing financial instruments, and

• (d) providing advice to clients in respect of -

• (i) those financial instruments, and

• (ii) services offered by the investment firm.

• (2) An investment firm that appoints a tied agent -

• (a) remains fully and unconditionally responsible for any act or omission on the part of the tied agent when acting on behalf of the firm, and

• (b) shall ensure that the tied agent in dealings with any client or potential client discloses at the outset -

• (i) the capacity in which the tied agent is acting, and

• (ii) the firm which the tied agent is representing.

• (3) An investment firm shall monitor the activities of the firm's tied agents to ensure the firm's compliance with these Regulations when the tied agents are acting on behalf of the firm.

• (4) An investment firm shall report proposed tied agency arrangements to the Bank at least 6 months before entering into the arrangements.

• (5) If an investment firm appoints a tied agent which provides -

• (a) services and activities not covered under these Regulations, and

• (b) services and activities to which these Regulations apply,

the firm shall take adequate measures to avoid any negative impact the services and activities described in paragraph (a) could have on the services that are described in paragraph (b) and that are provided by the tied agent on behalf of the firm.

• (6) An investment firm shall appoint only tied agents entered in the public register established and maintained under Regulation 110.

• (7) A tied agent may act on behalf of one investment firm only.

Public registry of tied agents to be maintained by Bank

110. (1) The Bank shall establish, update on a regular basis, and in such manner as it sees fit make publicly available, a public register of tied agents and include on the public register -

• (a) all tied agents established within the State, and

• (b) all other tied agents appointed by investment firms other than have been notified to the Bank by a competent authority of another Member State.

• (2) The Bank may include a tied agent on the public register only if satisfied that the tied agent -

• (a) is of sufficiently good repute, and

• (b) possesses the appropriate general, commercial and professional knowledge so to enable the tied agent to communicate accurately all relevant information about any proposed services to the client or potential client of the investment firm for whom the tied agent acts.

• (3) The Bank may enter into arrangements with investment firms or other entities for the registration and supervision of tied agents by the investment firms or other entities under the supervision of the Bank.

Transactions executed with eligible counterparties

111. (1) In this Regulation, “eligible counterparties” means -

• (a) investment firms,

• (b) credit institutions,

• (c) insurance companies,

• (d) undertakings for the collective investment in transferable securities authorised pursuant to EU Council Directive 85/611/EEC of 20 December 1985 and the management companies of the undertakings,

• (e) pension funds and their management companies,

• (f) undertakings exempted under Regulation 5(1)(j) and (k) from the application of these Regulations,

• (g) national governments and their corresponding offices including public bodies that deal with public debt, central banks and supranational organisations, and

• (h) EU entities recognised as eligible counterparties by the law of their home State.

• (2) An investment firm authorised to -

• (a) execute orders on behalf of clients,

• (b) deal on own account, or

• (c) receive and transmit orders,

may bring about or enter into transactions with eligible counterparties without being obliged to comply with Regulations 76 to 101, 106 and 108(1).

• (3) Notwithstanding the definition of “eligible counterparties” in paragraph (1), an entity that is an eligible counterparty under that definition -

• (a) may request the Bank, either on a general form or on a trade-by-trade basis, to allow the entity to be treated under these Regulations as a client of an investment firm whose business with the investment firm is subject to Regulations 76 to 101, 106 and 108(1), and

• (b) if the Bank grants the request, the entity shall be treated under these Regulations as set out in subparagraph (a).

• (4) An investment firm which enters into a transaction with an eligible counterparty in accordance with paragraph (2) must obtain the express confirmation from the prospective counterparty, either in the form of a general agreement or on a transaction by transaction basis, that it agrees to be treated as an eligible counterparty.

• (5) An undertaking may be considered as an eligible counterparty if it is in a category of clients who are to be considered professional clients in accordance with Schedule 2, excluding any category which is explicitly mentioned in Regulation 111.

• (6) Undertakings in a category of clients who are to be considered professional clients in accordance with Schedule 2, on request, may also be considered as eligible counterparties, but only in respect of the services or transactions for which it could be treated as a professional client.

• (7) Where, pursuant to this Regulation an eligible counterparty -

• (a) requests treatment as a client whose business with an investment firm is subject to Regulations 76 to 101, 106 and 108(1), and

• (b) does not expressly request treatment as a retail client,

and the investment firm agrees to the request, the firm shall treat that eligible counterparty as a professional client.

• (8) However, where an eligible counterparty expressly requests treatment as a retail client, the provisions in respect of requests of non-professional treatment specified in Schedule 2 apply.

Part 8 — Market Transparency and Integrity

Obligation to uphold integrity of markets, report transactions and maintain records

112. (1) An investment firm shall -

• (a) keep for at least 5 years a record of all relevant data relating to each transaction in financial instruments that is executed by the firm whether on own account or on behalf of a client,

• (b) make the data available to the Bank for inspection at any time, and

• (c) include in the record if the transaction is executed on behalf of a client -

• (i) all the information and details of the identity of the client, and

• (ii) the information required under Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering.

• (2) Unless exempted by the Bank under paragraph (5), an investment firm that executes any transaction in any financial instruments admitted to trading on a regulated market shall report details of any such transaction to the Bank or any person that the Bank nominates for that purpose as quickly as possible, but no later than the close of the following working day.

• (3) Unless exempted by the Bank under paragraph (5), an investment firm that executes a transaction in financial instruments -

• (a) that are admitted to trading on an MTF operated by a market operator;

• (b) the value of which are derived from, or which are otherwise dependant upon, debt or equity instruments admitted to trading on a regulated market or an MTF operated by a market operator;

• (c) the value of which are derived from, or which are otherwise dependant upon, indices of financial instruments admitted to trading on a regulated market or an MTF operated by a market operator; and

• (d) other than as described in subparagraphs (a) to (c) as the Bank may determine from time to time;

shall report details of the transaction, whether or not executed on a regulated market or an MTF operated by a market operator, to

• (i) the Bank, or

• (ii) any person that the Bank nominates for that purpose,

as quickly as possible, but no later than the close of the following working day.

• (4) The Bank shall establish the necessary arrangements in order to ensure that upon receipt by the Bank of any report under paragraph (2), the Bank transmits the reported information to the competent authority of the most relevant market in terms of liquidity for those financial instruments.

• (5) Where reports under paragraphs (2) and (3) are made to the Bank or its nominee by the market operator of a regulated market, an MTF or the operator of a trade matching or reporting system, the Bank may exempt the investment firm concerned from the obligation under paragraph (2) or (3) to report any such transactions.

• (6) A report made under paragraph (2) shall include details of -

• (a) the names and numbers of the instruments bought or sold,

• (b) the quantity of the instruments bought and sold,

• (c) the dates and times of execution,

• (d) the transaction prices, and

• (e) a means of identifying the investment firms concerned.

• (7) The Bank may prescribe the manner in which reports under this Regulation are to be made to the Bank.

• (8) The Bank shall transmit reports provided to it or to its nominee under paragraph (2) by a branch of an investment firm authorised by the competent authority of another Member State, to that other competent authority unless the other authority has indicated that it does not wish to receive the reports.

• (9) The Bank may transmit reports provided to it or to its nominee under paragraph (3) by a branch of an investment firm authorised by the competent authority of another Member State, to that other competent authority where that other authority has indicated that it wishes to receive the reports.

• (10) The Bank may require reports made in accordance with paragraph (2) or (3) to contain information related to the transactions in question which is additional to that specified in Table 1 of Annex I of Commission Regulation (EC) No. 1287/2006 subject to the provisions of Article 13(3) of Commission Regulation (EC) No. 1287/2006.

• (11) The Bank may require a report of a transaction made under paragraph (2) or (3) to provide such information as the Bank considers appropriate to identify the clients on whose behalf the investment firm has executed that transaction.

Monitoring of compliance with the rules of the MTF and with other legal obligations

113. Investment firms and market operators operating an MTF shall -

• (a) establish and maintain effective arrangements and procedures, relevant to the MTF, for the regular monitoring of the compliance by its users with its rules,

• (b) monitor the transactions undertaken by their users under their systems in order to identify -

• (i) breaches of their rules,

• (ii) disorderly trading conditions, and

• (iii) conduct that may involve market abuse,

• (c) report to the Bank without delay -

• (i) significant breaches of their rules,

• (ii) disorderly trading conditions, and

• (iii) conduct that may involve market abuse, and

• (d) provide full assistance to the Bank in investigating and prosecuting market abuse occurring on or through the systems of the investment firms, market operators or the MTF.

Obligation for investment firms to make public firm quotes

114. (1) A systematic internaliser in shares admitted to trading on a regulated market -

• (a) shall publish a firm quote for any of the shares for which -

• (i) there is a liquid market, and

• (ii) it is a systematic internaliser,

• (b) shall disclose quotes to the systematic internaliser's clients on request for any of the shares for which there is no liquid market.

• (2) This Regulation -

• (a) applies to systematic internalisers when dealing in shares for sizes up to and including standard market size, and

• (b) does not apply to systematic internalisers that only deal in shares for sizes above standard market size.

• (3) A systematic internaliser -

• (a) may decide the size of a share or the sizes of shares at which the systematic internaliser will quote,

• (b) in quoting for a particular share, shall—

• (i) include a firm bid, an offer price or offer prices for any size or sizes up to and including the standard market size for the class of shares to which the share belongs, and

• (ii) ensure that the offer price or offer prices shall also reflect the prevailing market conditions for that share.

• (4) For the purposes of paragraph (3), a systematic internaliser shall ensure that -

• (a) shares are grouped in classes on the basis of the arithmetic average value of the orders executed in the market for the particular share referred to in that paragraph, and

• (b) the standard market size for each class of shares is representative of the arithmetic average value of the orders executed in the market for the shares included in each class of shares.

• (5) The market for each share shall be comprised of all orders executed in the European Union in respect of that share, excluding those orders that are above standard market size for that share.

Bank to determine classes to which particular shares belong

115 Where the Bank is the competent authority of the most relevant market in terms of liquidity for a particular share, the Bank shall -

• (a) determine at least annually, on the basis of the arithmetic average value of the orders executed in the market in respect of that share, the class of shares to which that share belongs, and

• (b) make public to all market participants the information determined under subparagraph (a).

Further duties of systematic internalisers respecting their quotes

116 (1) A systematic internaliser shall make public its quotes -

• (a) on a regular and continuous basis during normal trading hours, and

• (b) in a manner which is easily accessible to other market participants on a reasonable commercial basis.

• (2) A systematic internaliser may -

• (a) update its quotes at any time, and

• (b) withdraw its quotes with the permission of the Bank and under exceptional market conditions.

• (3) Without limiting the application of Regulation 106 to systematic internalisers a systematic internaliser acting as such in relation to shares shall execute each order it receives from its clients at the quoted price at the time of reception of the order.

• (4) However, a systematic internaliser may execute an order from a professional client at a better price in justified cases if that price -

• (a) falls within a public range close to market conditions, and

• (b) the order is larger than an order customarily undertaken by a retail investor.

• (5) Notwithstanding paragraphs (3) and (4), a systematic internaliser may execute orders from professional clients at prices different than the quoted prices if the orders -

• (a) involve execution in several securities as part of one transaction, or

• (b) are subject to conditions other than the current market price.

• (6) Where a systematic internaliser -

• (a) who quotes only one quote, or

• (b) whose highest quote is lower than the standard market size,

receives an order from a client of a size larger than the system internaliser's quotation size, but lower than the standard market size, then the systematic internaliser may execute that part of the order which exceeds the quotation size, if the order is executed at the quoted price, except where otherwise permitted under paragraphs (3) or (5).

• (7) Where a systematic internaliser -

• (a) quotes in different sizes,

• (b) receives an order between those sizes, or

• (c) chooses to execute the order,

the systematic internaliser shall execute the order at one of the quoted prices in compliance with Regulation 106.

Bank to monitor for compliance

117 The Bank shall monitor whether investment firms:

• (a) regularly update any bid and offer prices published in accordance with Regulation 114 and maintain prices which reflect the prevailing market conditions, and

• (b) comply with the conditions and requirements of this Part respecting price.

Business risk-reductions measures available to system internalisers

118 (1) A systematic internaliser -

• (a) may select, on the basis of its commercial policy and in an objective non-discriminatory way, the investors to whom it gives access to its quotes,

• (b) must have, and must make available to clients, clear standards for governing access to its quotes, and

• (c) may refuse to enter into, or may discontinue, business relationships with clients on the basis of commercial considerations such as credit status, counterparty risk or the final settlement of a transaction.

• (2) In order to limit the risk of being exposed to multiple transactions from the same client, a systematic internaliser may limit, in a non-discriminatory way and in accordance with Regulation 106,

• (a) the number of transactions from the same client which the system internaliser undertakes to enter into on published conditions, or

• (b) the total number of transactions from different clients at the same time if the number or volume of orders sought by one or more of the clients considerably exceeds the normal market practice.

Post-trade disclosure by investment firms

119. (1) An investment firm that, on its own account or on behalf of clients, concludes transactions in shares admitted to trading on a regulated market -

• (a) outside a regulated market, or

• (b) on an MTF,

shall make public -

• (i) the volume and price in those transactions, and

• (ii) the time at which the transactions were concluded,

without delay, on reasonable commercial terms and in a manner easily accessible to other market participants.

• (2) An investment firm must ensure that information the firm makes public in accordance with paragraph (1) of this Regulation and the time-limits within which the information is published are in compliance with Regulation 69.

• (3) Where the measures adopted pursuant to Regulation 69 provide for deferred reporting for certain categories of transaction in shares, the deferral applies to those transactions when undertaken outside regulated markets or MTFs.

Pre-trade transparency requirements for MTFs

120. (1) If operating an MTF, an investment firm or market operator shall make public -

• (a) any current bid and offer prices that are advertised through the systems of the investment firm or market operator, as the case may be, in respect of shares admitted to trading on a regulated market, and

• (b) the depth of the trading interests at those prices,

on reasonable commercial terms and on a continuous basis during normal trading hours.

• (2) On application by an investment firm or market operator, the Bank may waive the investment firm's or market operator's obligation to comply with subsection (1) if, in the cases defined in accordance with Commission Regulation EC 1287/2006,, the Bank considers the waiver appropriate based on the market model or the type and size of orders.

• (3) Without limiting the generality of paragraph (2), the Bank may grant an application for a waiver under that paragraph for transactions that are large in scale compared with transactions of normal market size for the shares or class of shares in question.

Post-trade transparency requirements for MTFs

121. (1) If operating an MTF, an investment firm or market operator, for shares admitted to trading on a regulated market, shall make public the price, volume and time of the transactions carried out under its systems, as soon as possible, on reasonable commercial terms and in a manner easily accessible to other market participants.

• (2) Paragraph (1) does not apply in respect of transactions referred to in that subsection that are made public under the systems of a regulated market.

• (3) On application by an investment firm or market operator, the Bank may permit the investment firm or market operator to defer making public the price, volume and time of the transactions referred to in paragraph (1), if the Bank considers the deferment appropriate based on the type and size of the transactions.

• (4) Without limiting the generality of paragraph (3), the Bank may grant an application for deferment under that paragraph for transactions that are large in scale compared with transactions of normal market size for the shares or class of shares in question.

• (5) The investment firm or market operator whose application for a deferment is granted under paragraph (3) must ensure that the deferment arrangement approved by the Bank in respect of that application is clearly disclosed to market participants and the public.

PART 9 — CROSS BORDER ACTIVITIES

Definition for this Part

122. In this Part, “Member State investment firm” means an investment firm authorised and supervised by the competent authority of another Member State in accordance with the Directive or a credit institution authorised in accordance with Directive 2006/48/EC.

Freedom of investment firms from other Member States to provide services in State

123 (1) A Member State investment firm may provide within the State investment services and any ancillary services, if the services are permitted under the firm's authorisation in its home Member State.

• (2) A Member State investment firm intending to -

• (a) provide investment services or investment services together with ancillary services in the State for the first time, or

• (b) change the range of services the firm provides within the State,

shall communicate to the competent authority of the firm's home Member State the following information:

• (i) the firm's intention to operate in the State;

• (ii) the firm's proposed programme of operations in the State, stating in particular the investment services and ancillary services that the investment firm intends to provide and whether it intends to use tied agents in the State, and if that is its intent, the identity of the tied agents.

• (3) Where -

• (a) the Bank receives the information referred to in paragraph (2), from the competent authority of the home Member State of a Member State investment firm, and

• (b) the information includes the identity of tied agents that the firm intends to use in the State,

the Bank may make public the identity of the tied agents.

• (4) A Member State investment firm may commence to provide the services communicated by it under paragraph (2) to the competent authority of the firm's home Member State, after the Bank has received, from that competent authority, the information referred to in paragraph (2)(i) and (ii).

• (5) The Member State investment firm referred to in paragraph (4) may not provide in the State the services referred to in that paragraph until one month after the Bank has been informed of the firm's intention to operate in the State by the competent authority of the firm's home Member State.

• (6) In the event of a change in any of the particulars of the information communicated under paragraph (2), the Member State investment firm concerned shall give written notice of the change to the competent authority of its home Member State at least one month before implementing the change.

• (7) Where -

• (a) a Member State investment firm, or

• (b) a market operator,

that operates an MTF authorised in its home Member State, intends to provide in the State the facilities that MTF provides in the home Member State, the firm or operator, as the case may be, shall communicate that intention to the competent authority of the home Member State.

• (8) The Member State investment firm or market operator referred to in paragraph (7) may not provide in the State the facilities referred to in that paragraph until one month after the Bank has been informed of the firm's or operator's intention to operate in the State by the competent authority of the firm's or operator's home Member State.

Investment firms and market operators providing services in other Member States

124. (1) An investment firm intending to -

• (a) provide investment services or ancillary service in another Member State for the first time, or

• (b) change the range of services the firm provides within the other Member State,

shall communicate to the Bank the following information:

• (i) the firm's intention to operate in the other Member State;

• (ii) the firm's proposed programme of operations, stating in particular the investment services and ancillary services that the investment firm intends to provide and whether it intends to use tied agents in the State and if that is its intent, the identity of the tied agents.

• (2) Where an investment firm, under paragraph (1), communicates to the Bank the intention to use tied agents in the other Member State referred to in that paragraph, the Bank at the request of the competent authority of the other Member Stat and within a reasonable period, shall communicate to the other Member State the identity of the tied agents.

• (3) The Bank, within one month after receiving the information communicated to it under subsection (1), shall forward the information to the competent authority of the other Member State referred to in paragraph (1).

• (4) An investment firm may commence to provide the services communicated by it under paragraph (1) to the Bank after the competent authority of the other Member State confirms to the firm that the competent authority has received, from the Bank, the information referred to in paragraph (1)(i) and (ii).

• (5) In the event of a change in any of the particulars of the information communicated under paragraph (1), the investment firm concerned shall give written notice of the change to the Bank at least one month before implementing the change.

• (6) The Bank shall inform the competent authority of the other Member State of those changes.

• (7) Where -

• (a) an investment firm, or

• (b) a market operator,

that operates an MTF authorised in the State, intends to provide in another Member State the facilities that the MTF provides in the State,

• (i) the firm or operator, as the case may be, shall communicate that intention to the Bank, and

• (ii) the Bank shall communicate, within one month, that intention and the particulars of it to the competent authority in that other Member State.

• (8) The Bank, on the request of the competent authority of that other Member State, and within a reasonable period, shall communicate the identity of the members of or participants in the MTF referred to in subsection (7).

Investment firms authorised in other Member States establishing branches in Ireland

125. (1) A Member State investment firm may provide within the State investment services, and ancillary services provided together with them, through the establishment of a branch, if the services are permitted under the firm's authorisation in its home Member State.

• (2) A Member State investment firm intending to establish a branch in the State shall communicate to the competent authority of the firm's home Member State the following information:

• (a) the firm's intention to establish a branch in the State;

• (b) the firms proposed programme of operations in the State, stating in particular -

• (i) the investment services and ancillary services that the firm intends to provide,

• (ii) the organisational structure of the branch, and

• (iii) whether the branch intends to use tied agents in the State, and if that is the intent, the identity of the tied agents;

• (c) the address in the State from which documents may be obtained;

• (d) the names of those responsible for the management of the branch.

• (3) Where a Member State investment firm uses a tied agent established in a Member State outside its home Member State, the tied agent -

• (a) shall be assimilated to the branch, and

• (b) is subject to the provisions of the Directive relating to branches.

• (4) After a Member State investment firm has communicated the information referred to in subsection (1) to its home member state in accordance with that subsection, the Member State investment firm may both establish the firm's intended branch in the State, and commence to provide the services referred to in that subsection, upon the earlier of -

• (a) the date the Bank confirms to the firm the receipt by the Bank from the firm's home member state of

• (i) the information referred to in subsection (2), and

• (ii) details of the accredited compensation scheme of which the firm is a member in accordance with Directive 97/9/EC., and

• (b) 2 months after the date on which the competent authority of the firm's home Member State communicates to the Bank the information and details mentioned in paragraph (a).

• (5) In the event of a change in any of the information communicated in accordance with paragraph (2) by an investment firm,

• (a) the firm shall give written notice of that change to the competent authority of the home Member State at least one month before implementing the change, and

• (b) the Bank expects to be informed of that change by the competent authority of the home Member State.

Application of this Part to investment firms with branches in the State

126. (1) Regulations 76 to 101, 106, 108, 112, 114 and 119 apply to and in respect of an investment firm that has established a branch in the State.

• (2) In monitoring and enforcing compliance with Regulations 76 to 101, 106, 108 112, 114 and 119 by an investment firm that has a branch in the State, the Bank -

• (a) has the same powers, duties and responsibilities under this Part as it has in relation to an investment firm, and

• (b) without limiting the generality of paragraph (a), has the right -

• (i) to examine branch arrangements, and

• (ii) to request any changes as are strictly needed to enable the Bank to enforce Regulations 76 to 101, 106, 108, 112, 114 and 119 with respect to the services the investment firm provides in the State through the branch.

• (3) Where a Member State investment firm has a branch in the State, the competent authority of the other Member State, in the exercise of its responsibilities and after informing the Bank, may carry out on-site inspections in that branch.

Authorised investment firms establishing branches in other Member States.

127. (1) An investment firm intending to establish a branch in another Member State (the host Member State) shall communicate to the Bank the following information:

• (a) the firm's intention to establish a Branch in the host Member State;

• (b) the firms proposed programme of operations in the host Member State stating in particular -

• (i) the investment services and ancillary services that the firm intends to provide,

• (ii) the organisational structure of the branch, and

• (iii) whether the branch intends to use tied agents in the other Member State and, if that is the intent, the identity of the agents;

• (c) the address in the host Member State from which documents may be obtained;

• (d) the names of those responsible for the management of the branch.

• (2) Where an investment firm uses a tied agent established in a Member State outside the State, the tied agent -

• (a) shall be assimilated to the branch, and

• (b) is subject to the provisions of these Regulations relating to branches.

• (3) Unless the Bank has reason to doubt the adequacy of the administrative structure or the financial situation of an investment firm that communicates information to the bank under subsection (1), taking into account the services that the firm intends to provide, the Bank, within 3 months after receiving the information, shall -

• (a) communicate to the competent authority of the host Member State -

• (i) that information, and

• (ii) details of the accredited compensation scheme of which the investment firm is a member in accordance with Directive 97/9/EC, and

• (b) inform the investment firm in that regard.

• (4) In the event of a change in any of the information communicated in accordance with subsection (1), by an investment firm -

• (a) the firm shall give written notice of that change to the Bank at least one month before implementing the change, and

• (b) the Bank shall inform the competent authority of the host Member State of that change.

• (5) If, for the reason referred to in subsection (3), the Bank decides not to communicate the information referred to in that subsection to the competent authority of the host Member State, the Bank shall give the reasons for that decision to the investment firm concerned within 3 months after the Bank's receipt of the information.

• (6) An investment firm that, under subsection (1), has communicated its intent to establish a branch in a home Member State may establish the intended branch in the home Member State and commence to provide the services referred to in that subsection upon the earlier of -

• (a) the date the competent authority of the host Member State confirms to the firm the receipt by the competent authority from the Bank -

• (i) the information, and

• (ii) details of the accredited compensation scheme of which the authorised investment firm is a member in accordance with Directive 97/9/EC, and

• (b) 2 months after the date on which the Bank communicates to the host Member State the information and details referred to in paragraph (a).

• (6) In respect of branches established in the State of investment firms authorised in another Member State, the Bank may -

• (a) examine branch arrangements, and

• (b) request changes that are strictly needed to enable the Bank to enforce with respect to the services provided by the branch the in the State, the obligations under Regulations 76 to 101, 106, 108, 112, 114 and 119.

• (7) Where an authorised investment firm has established a branch within another Member State, the Bank, in the exercise of its responsibilities and after informing the competent authority of the host Member State, may carry out on-site inspections in that branch.

• (8) In the event of a change in any of the information communicated by an authorised investment firm in accordance with paragraph (1),

• (a) the authorised investment firm shall give written notice of that change to the Bank at least one month before implementing the change, and

• (b) the Bank shall also inform the competent authority of the host Member State of that change.

Access to regulated markets

128. (1) Investment firms authorised in other Member States which are to execute client orders or to deal on own account have the right of membership or have access to regulated markets established in Ireland by means of any of the following arrangements:

• (a) directly, by setting up branches in the State;

• (b) by becoming remote members of or having remote access to regulated markets without having to be established in the State, where the trading procedures and systems of the regulated market in question do not require a physical presence for conclusion of transactions on the market.

• (2) No additional regulatory or administrative requirements shall be imposed on investment firms exercising the right conferred by paragraph (1), in respect of matters covered by these Regulations.

Access to central counterparty, clearing and settlement facilities and right to designate settlement system

129. (1) Investment firms authorised in other Member States have the right of access to central counterparty, clearing and settlement systems in the State for the purposes of finalising or arranging the finalisation of transactions in financial instruments.

• (2) The right of access under paragraph (1) to central counterparty, clearing and settlement systems -

• (a) is subject to the same non-discriminatory, transparent and objective criteria as apply to local participants, and

• (b) is not and must not be restricted to the clearing and settlement of transactions in financial instruments undertaken on a regulated market or an MTF in the State.

• (3) The market operator of a regulated market shall offer to all of the members of or participants in, the regulated market the right to designate the system for the settlement of transactions in financial instruments undertaken on that regulated market, subject to -

• (a) the links and arrangements between the designated settlement system and any other system or facility that are necessary to ensure the efficient and economic settlement of the transaction in question, and

• (b) agreement by the Bank that technical conditions for settlement of transactions concluded on the regulated market through a settlement system other than that designated by the regulated market are sufficient to allow the smooth and orderly functioning of financial markets.

• (4) The rights of investment firms under this Regulation are without prejudice to the right of operators of central counterparty, clearing or securities settlement systems to refuse on legitimate commercial grounds to make the requested services available.

Provisions regarding central counterparty, clearing and settlement arrangements in respect of MTFs

130. (1) Investment firms and market operators operating an MTF in the State may enter into arrangements with a central counterparty or clearing house and a settlement system of another Member State with a view to providing for the clearing or settlement of some or all trades concluded by market participants under the systems of the MTF.

• (2) The Bank may prohibit the use of central counterparty, clearing houses or settlement systems in another Member State by investment firms and market operators operating an MTF in the State where it is demonstrably necessary in order to maintain the orderly functioning of that MTF, taking into account the conditions for settlement systems established under these Regulations.

Delegation by the Bank

131. The Bank may delegate the performance of its functions under Regulations 72(4) 73(3) and 112(2) to other entities.

Obligation to assist and cooperate with other Member States

132. (1) The Bank shall cooperate with the competent authorities of other Member States whenever necessary for the purpose of -

• (a) carrying out the duties under these Regulations of those competent authorities, or

• (b) making use of the powers of the those competent authorities, whether set out in these Regulation or in national law.

• (2) The Bank shall render assistance to competent authorities of the other Member States, in particular by exchanging information and cooperating in any investigation or in any supervisory activities.

• (3) The Bank shall ensure that it has the necessary administrative and organisational measures in place to facilitate cooperation and assistance under this Regulation.

• (4) The Bank may use its powers under these Regulations or under national law for the purpose of cooperation with the competent authorities of other Member States even if the matters in which the competent authorities seek the Bank's cooperation do not involve an infringement of any law in force in the State.

Reciprocal duties of competent authorities respecting misconduct by regulated entities in other Member States

133 (1) If the Bank has good reason to suspect that acts contrary to these Regulations or to the Directive, are or have been carried out by entities not subject to the Bank's supervision in the territory of another Member State, the Bank shall notify the competent authority of the other Member State.

• (2) Paragraph (1) is without prejudice to the competencies of the Bank under these Regulations or the Directive.

• (3) Where the Bank receives information pursuant to Article 56(4) of the Directive from the competent authority of another Member State the Bank shall -

• (a) take appropriate action, and

• (b) inform the notifying competent authority of -

• (i) the outcome of the action, and,

• (ii) to the extent possible, of significant interim developments.

• (4) Paragraph (3) is without prejudice to the competencies of the notifying competent authority.

Cooperation in supervisory activities, on-the-spot verifications or in investigations

134. (1) A competent authority of another Member State may request the cooperation of the Bank in a supervisory activity, for an on-the-spot verification or in an investigation.

• (2) If the activity, verification or investigation relates to investment firms that are remote members of a regulated market authorised by the Bank, the Bank—

• (a) may choose to address the members directly, and

• (b) if the Bank so chooses, it shall inform the competent authority of the home Member State of the investment firm accordingly.

• (3) Where the Bank receives a request with respect to an on-the-spot verification or an investigation, the Bank, within the framework of its powers under these Regulations and national law shall -

• (a) carry out the verifications or investigations itself,

• (b) allow the requesting authority to carry out the verification or investigation, or

• (c) allow auditors or experts to carry out the verification or investigation on the Bank's behalf.

Exchange of information between competent authorities

135 (1) The Bank shall supply the competent authorities of other Member States for the purposes of the Directive with information on the identities of the entities carrying out the duties of the Bank under these Regulations and, in doing so, may indicate that the information supplied must not be disclosed without the express agreement of the Bank.

• (2) The Bank may transmit information received by it for the purposes of the Directive from the competent authorities of other Member States to the entities notified to the Bank under Article 49 of the Directive.

• (3) The Bank shall not transmit any such information to any entities or persons other than the entities notified to the Bank under Article 49 of the Directive -

• (a) without the express agreement of the competent authorities which disclosed the information, and

• (b) solely for the purposes for which the competent authorities gave their agreement,

except in duly justified circumstances.

• (4) When the Bank, in duly justified circumstances as permitted under paragraph (3), transmits information to any entity or person other than the entities notified to the Bank under Article 49 of the Directive, the Bank immediately afterwards shall inform the competent authority that sent the information in question.

• (5) If the Bank or an entity acting on the Bank's behalf receives confidential information under this Regulation, the Bank or entity may use the information only in the course of its duties, in particular,

• (a) having regard to the capital adequacy requirements imposed by EU Directive 2006/49/EC, by administrative and accounting procedures and by internal-control mechanisms,

• (i) to check that the conditions governing the taking-up of the business of investment firms are met, and

• (ii) to facilitate the monitoring, on a non-consolidated or consolidated basis, of the conduct of that business,

• (b) to monitor the proper functioning of trading venues,

• (c) to impose sanctions,

• (d) in administrative appeals against decisions by the Bank, or

• (e) in court proceedings.

• (6) This Regulation and Regulation 143 do not prevent the Bank from transmitting confidential information -

• (a) to central banks in the European System of Central Banks and the European Central Bank, each in its capacity as a monetary authority and,

• (b) in circumstances the Bank considers to be appropriate, to other public authorities responsible for overseeing payment and settlement systems,

if the transmission is intended for the performance of the functions of the central banks or other public authorities or is required or permitted by law.

Refusal to cooperate

136. (1) The Bank may refuse to act on a request for cooperation in carrying out an investigation, on-the-spot verification or supervisory activity as provided for in Regulation 134 or to exchange information as provided for in Regulation 135 only in one or more of the following circumstances:

• (a) such an investigation, on-the-spot verification, supervisory activity or exchange of information might adversely affect the sovereignty security or public policy of the State;

• (b) judicial proceedings have already been initiated in respect of the same actions and the same persons before the authorities of the State;

• (c) final judgment has already been delivered in the State in respect of the same persons and the same actions.

• (2) In the case of such a refusal, the Bank shall notify the requesting competent authority accordingly, providing as detailed information as possible.

Inter-authority consultation before authorisation

137. (1) For the purposes of the Directive, the Bank shall consult the responsible competent authority of any other relevant Member State before granting an authorisation to an investment firm which is -

• (a) a subsidiary of any entity authorised in that Member state that is an investment firm, credit institution or insurance undertaking,

• (b) a subsidiary of the parent undertaking of an entity described in subparagraph (a), or

• (c) controlled by the same persons who control an entity described in subparagraph (a).

• (2) Without limiting the generality of paragraph (1), the Bank shall consult the responsible competent authority referred to in that paragraph when assessing -

• (a) the suitability of the shareholders or members of persons who -

• (i) effectively direct the business, or

• (ii) are involved in the management,

of another entity of the same group as that to which the investment firm referred to in paragraph (1) belongs, or

• (b) the reputation and experience of persons involved in the management of another entity in the same group as that to which the investment firm referred to in paragraph (1) belongs.

• (3) The Bank shall exchange the pertinent information regarding the suitability reputation and experience of the persons referred to in paragraph (2)(a) or (b) with the responsible competent authority or competent authorities, for the purposes of -

• (a) deciding whether to grant an authorisation under these Regulations to an investment firm, and

• (b) the ongoing assessment of compliance by an authorised investment firm with these Regulations.

Powers for host Member States

138. (1) For statistical purposes, the Bank may require investment firms with established branches in the State to report to the Bank periodically on the activities of those branches.

• (2) The Bank may require investment firms that have established branches in the State to provide the Bank with all information necessary for the monitoring by the Bank of their compliance with the standards set by these Regulations.

• (3) The requirements imposed by the Bank under paragraph (2) for the provision of information are not to be more stringent than those imposed on authorised investment firms for the monitoring of their compliance with the same standards.

Precautionary measures by Bank respecting misconduct by investment firms from other Member States

139. (1) Where the Bank is of the opinion that an investment firm that -

• (a) acts within the State under the freedom to provide services, or

• (b) has a branch within the State

is in breach of the obligations arising from, or adopted under, provisions of these Regulations for which the Bank does not have enforcement powers, the Bank shall refer its findings in support of that opinion to the competent authority of the investment firm's home Member State.

• (2) If, following a referral of the Bank's findings under paragraph (1) about an investment firm, that firm persists in acting in a manner that, in the opinion of the Bank, is prejudicial to -

• (a) the interests of Irish investors, or

• (b) the orderly functioning of Irish markets,

the Bank, after informing the competent authority of the home Member State, may take all the appropriate measures under these Regulations that are needed in order to protect investors and the proper functioning of the markets.

• (3) Those measures include but are not limited to preventing the investment firm concerned from initiating any further transactions within the State.

• (4) The Bank shall inform the European Commission without delay of any measures taken by the Bank under this Regulation.

Further precautionary measures: misconduct of investment firm with branch in State

140. (1) Where the Bank is of the opinion that an investment firm that has a branch within the State is in breach of the obligations arising from, or adopted under, provisions of these Regulations the Bank shall require the investment firm concerned to discontinue the breach of those obligations as soon as possible.

• (2) If the investment firm referred to in paragraph (1) does not discontinue the breach of those obligations, the Bank shall take all appropriate measures under these Regulations to ensure that the investment firm concerned rectifies the situation as soon as possible.

• (3) The Bank shall communicate the nature of the measures taken to the competent authorities of the investment firm's home Member State.

• (4) If, despite the measures taken by the Bank under subsection (1), the investment firm continues in breach of the obligations, the Bank, after informing the competent authorities of the investment firm's home Member State, may take appropriate measures under these regulations -

• (a) to prevent the investment firm from continuing in breach of the obligations,

• (b) to penalise the investment firm for its breach of the obligations, and,

• (c) in so far as necessary, to prevent that investment firm from initiating any further transactions within the State.

• (5) The Bank shall inform the European Commission without delay of any measures taken under paragraph (4).

Further precautionary measures: misconduct of market operator or MTF in the State

141 (1) Where the Bank is of the opinion that -

• (a) the market operator of a regulated market, or

• (b) an MTF

established in another Member State and operating in the State is in breach of the obligations arising from or adopted under these Regulations, the Bank shall refer those findings to the competent authority of the home Member State of the regulated market or the MTF.

• (2) If, following a referral of the Bank's findings under paragraph (1), the operator of the regulated market or the MTF persists in acting in a manner that, in the opinion of the Bank, is prejudicial to -

• (a) the interests of Irish investors, or

• (b) the orderly functioning of Irish markets,

the Bank, after informing the competent authority of the home Member State, may take all the appropriate measures under these Regulations that are needed in order to protect investors and the proper functioning of the markets.

• (3) Those measures include but are not limited to preventing the market operator of the regulated market or the MTF from making the arrangements of the regulated market or of the MTF available to remote members or participants established in the State.

• (4) The Bank shall inform the European Commission without delay of any measures taken by the Bank under this Regulation.

Sanctions and restrictions to be justified and communicated

142 Any measure adopted by the Bank under Regulations 139, 140 or 141 involving sanctions or restrictions on the activities of an investment firm, or of the market operator of a regulated market or MTF shall be justified and communicated to the investment firm or to the market operator of the regulated market or the MTF.

Exchange of information with third countries

143. (1) In this section “exchange of information” means an exchange of information that is -

• (a) subject to guarantees of professional secrecy at least equivalent to those required under the Directive, and

• (b) intended for the performance of the tasks of those authorities, bodies and persons.

• (2) The Bank may enter into cooperation agreements providing for the exchange of information between the competent authorities of third countries only if the exchange of information is -

• (a) subject to guarantees of professional secrecy at least equivalent to those required under the Directive, and

• (b) intended for the performance of the tasks of those competent authorities.

• (3) The Bank may enter into cooperation agreements providing for the exchange of information with third country authorities, bodies and persons responsible for -

• (a) the supervision of credit institutions, other financial organisations insurance undertakings and financial markets,

• (b) the liquidation and bankruptcy of investment firms and other similar procedures,

• (c) carrying out statutory audits of the accounts of investment firms and other financial institutions, credit institutions and insurance undertakings, in -

• (i) the performance of their supervisory functions, or

• (ii) the administration of compensation schemes,

• (d) overseeing the bodies involved in the liquidation and bankruptcy of investment firms and other similar procedures,

• (e) overseeing persons charged with carrying out statutory audits of the accounts of insurance undertakings, credit institutions, investment firms and other financial institutions,

• (4) Information that originates in another Member State may not be disclosed by the Bank -

• (a) under agreements referred to in paragraph (2), without the express agreement of the competent authorities from which the Bank received the information and, where appropriate, solely for the purposes for which those authorities gave their agreement, and

• (b) under agreements referred to in paragraph (3), without the express agreement of the authorities, bodies and persons from which the Bank received the information and, where appropriate, solely for the purposes for which those authorities, bodies and persons gave their agreement.

Part 11 — Auditors

Relations with auditors

144. (1) Investment firms and market operators of regulated markets shall ensure that their external auditors report at least annually to the Bank on the adequacy of the firm's arrangements under Regulation 85 and this Regulation.

• (2) The auditor of an investment firm or of the market operator of a regulated market shall report promptly to the Bank any fact or decision concerning the firm or market operator of which the auditor has become aware while carrying out an audit of the investment firm, of the market operator or of an undertaking having close links with the firm or market operator, which fact or decision -

• (a) constitutes or indicates a material breach of these Regulations or of any condition, requirement, code, guideline, notice or direction under these Regulations,

• (b) affects or may affect the continuous functioning of the firm, market operator or undertaking, or

• (c) leads to the auditor's refusal to certify the accounts or to the expression of reservations.

• (3) A disclosure in good faith pursuant to paragraph (1) does not constitute a breach of any contractual or legal restriction on disclosure of information and the person or persons making the disclosure are not, because of the disclosure in good faith, liable in any way or to any person.

Part 12 — Regulation and Supervision

Imposition of conditions or requirements

145. (1) The Bank, in respect of an investment firm or of the market operator of a regulated market may do all or any of the following:

• (a) impose conditions or requirements which relate to matters in

• (i) an associated undertaking, or

• (ii) a related undertaking

of the firm or market operator;

• (b) at any time impose conditions or requirements and amend or revoke any condition or requirement imposed under this paragraph;

• (c) at any time after authorisation, impose a condition or requirement that the market operator of the regulated market must -

• (i) add, amend or revoke rules of the regulated market, or

• (ii) add to or amend the market operator's memorandum of association or articles of association.

• (2) Any condition or requirement referred to in paragraph (1) may be imposed in relation to any or all of the following:

• (a) an investment firm, the market operator of a regulated market or a regulated market;

• (b) a proposed investment firm, the proposed market operator of a regulated market or a proposed regulated market;

• (c) a class of investment firm, of market operator of a regulated market or of a regulated market;

• (d) a specified period of time or times;

• (e) an associated undertaking or related undertaking of an investment firm or of the market operator of regulated market;

• (f) any matter, as the Bank may consider appropriate, in the interests of the proper and orderly regulation and supervision of investment firms the market operators of regulated markets, regulated markets and the protection of investors.

Further to Regulation 145

146. Without prejudice to the generality of Regulation 145, the Bank may impose conditions or requirements on an investment firm or the market operator of a regulated market concerning -

• (a) the level of training, qualifications or professional competence of managers, officers or employees, or