S.I. No. 375/2017 - European Union (Markets in Financial Instruments) Regulations 2017

• (c) the investment firm has clearly informed the client or potential client that—

• (i) in the provision of those services, the investment firm is not required to assess the appropriateness of the financial instrument or service provided or offered, and

• (ii) therefore the client or potential client does not benefit from the corresponding protection of the relevant conduct of business rules,

by means of a clear warning that may, be provided in a standardised format,

• (d) the investment firm complies with its obligations under Regulation 30.

(10)(a) The Bank may make a request to the European Commission to adopt an equivalence decision in respect of a third-country market.

• (b) The Bank’s request shall state why it considers that the legal and supervisory framework of the third country concerned is to be considered equivalent and shall provide relevant data to that end.

• (11) An investment firm shall establish and maintain a record that includes the document or documents agreed between the firm and its clients that set out—

• (a) the rights and obligations of the firm and the clients, and

• (b) the other terms on which the firm will provide services to the clients.

• (12) The rights and obligations referred to in paragraph (11) may be incorporated by reference to other documents or legal texts.

• (13) An investment firm shall provide to its clients adequate reports on the services provided by the investment firm to them in a durable medium, including—

• (a) periodic communications to clients which take into account the type and the complexity of the financial instruments involved and the nature of the services being provided to the clients, and

• (b) where applicable, the costs associated with the transactions and services undertaken on behalf of the clients.

• (14) When providing investment advice, an investment firm shall, before a transaction is made, provide a retail client with—

• (a) a statement on suitability in a durable medium specifying the advice given, and

• (b) how the advice meets the preferences, objectives and other characteristics of the retail client.

• (15) Where the agreement to buy or sell a financial instrument is concluded by means of distance communication which prevents the prior delivery of the suitability statement in paragraph (14), the investment firm may provide a written statement on suitability in a durable medium immediately after the retail client is bound by any agreement if—

• (a) the retail client consented to receiving the suitability statement without undue delay after the conclusion of the transaction, and

• (b) the investment firm has given the retail client the option of delaying the transaction in order to receive the statement on suitability in advance.

• (16) Where an investment firm provides portfolio management or has informed a retail client that it will carry out a periodic assessment of suitability, the periodic report shall contain an updated statement of how the investment meets the client’s preferences, objectives and other characteristics of the retail client.

• (17) Where an investment service is offered by an investment firm for a credit agreement relating to residential immovable property which—

• (a) is subject to the provisions of the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 ( S.I. No. 142 of 2016 ) concerning creditworthiness assessment of consumers, and

• (b) has as a prerequisite the provision to that same consumer of an investment service in relation to mortgage bonds specifically issued to secure the financing of and having identical terms as the aforementioned credit agreement, in order for the loan to be payable, refinanced or redeemed,

the investment service offered shall not be subject to the obligations set out in these Regulations.

Provision of services through the medium of another investment firm

• (2) The investment firm which mediates the instructions will remain responsible for the completeness and accuracy of the information transmitted.

• (3) An investment firm which receives an instruction on behalf of a client to perform investment or ancillary services through the medium of another investment firm shall rely on any recommendations in respect of the services or transactions that have been provided to the client by that other investment firm.

• (4) The investment firm which mediates the instructions remains responsible for the suitability for the client of the recommendations or advice provided.

• (5) An investment firm that receives client instructions or orders through the medium of another investment firm remains responsible for concluding the service or transaction, based on any such information or recommendations in accordance with these Regulations.

Obligation to execute orders on terms most favourable to client

• (a) take all sufficient 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 a client, execute the order in line with the specific instruction.

• (2) Where an investment firm executes an order on behalf of a retail client, the best possible result shall be determined in terms of the total consideration, representing—

• (a) the price of the financial instrument, and

• (b) the costs related to execution, including—

• (i) all expenses incurred by the client which are directly related to the execution of the order, and

• (ii) execution venue fees, clearing and settlement fees and any other fees paid to third parties involved in the execution of the order.

• (3) For the purposes of delivering the best possible result in accordance with paragraph (2) where there is more than one competing venue to execute an order for a financial instrument, in order to assess and compare the results for the client that would be achieved by executing the order on each of the execution venues listed in the investment firm’s order execution policy that is capable of executing that order, the investment firm’s own commissions and costs for executing the order on each of the eligible execution venues shall be taken into account in that assessment.

• (4) An investment firm shall not receive any remuneration, discount or non-monetary benefit for routing client orders to a particular trading venue or an execution venue which would infringe the requirements on conflicts of interest or inducements set out in—

• (a) paragraphs (1) to (3) of this Regulation,

• (b) Regulation 23(1)(b) to (e), (2) and (3), and

• (c) Regulations 30 to 32.

• (5) Each execution venue shall, in relation to—

• (a) financial instruments subject to the trading obligations in Articles 23 and 28 of Regulation (EU) No 600/2014, and

• (b) other financial instruments,

make available to the public, on at least an annual basis, without any charges, periodic reports containing data relating to the quality of execution of transactions on the venue and, following the execution of a transaction on behalf of a client, the investment firm shall inform the client where the order was executed.

• (6) Such periodic reports shall include details about the price, costs, speed and likelihood of execution for individual financial instruments.

• (7) An investment firm shall establish and implement effective arrangements for complying with paragraphs (1) to (3) including but not limited to establishing and implementing an order execution policy to allow it to obtain, for its client orders, the best possible results in accordance with those paragraphs.

• (8) An investment firm shall—

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

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

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

including information on those venues that enable the investment firm to consistently obtain the best possible result of the execution of client orders,

• (b) provide appropriate information to its clients on the investment firm’s order execution policy that shall explain clearly, in sufficient detail and in a way that can be easily understood by clients, how orders will be executed by the investment firm for the client, and

• (c) obtain the consent of the investment firm’s clients to the execution policy prior to the execution of orders on the client’s behalf.

• (9) Where the order execution policy of an investment firm provides for the possibility that client orders may be executed outside a trading venue, the investment firm shall, in particular—

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

• (b) obtain the prior express consent of its clients, before proceeding to execute the client’s orders outside a trading venue.

• (10) Such consent may be either in the form of a general agreement or in respect of individual transactions.

• (11) An investment firm that executes client orders shall—

• (a) summarise and make public on an annual basis, for each class of financial instrument, the top five execution venues in terms of trading volumes where it executed client orders in the preceding year,

• (b) provide information on the quality of the execution obtained,

• (c) regularly monitor the effectiveness of its order execution arrangements and order execution policy, in order to identify and, where appropriate, correct any deficiencies,

• (d) assess, on a regular basis, whether the execution venues included in the order execution policy provide for the best possible result for its clients or whether it needs to make any changes to its execution arrangements, taking account of (among other things) the information published under paragraphs (5) and (6) and subparagraphs (a) and (b), and

• (e) notify the clients with whom the investment firm has an ongoing client relationship of any material changes to the firm’s order execution arrangements or its order execution policy.

• (12) An investment firm shall demonstrate to its clients, at the clients’ request, that the investment firm has executed its orders in accordance with the investment firm’s order execution policy and shall demonstrate to the Bank, at the Bank’s request, compliance with this Regulation.

Client order handling rules

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

• (i) other client orders, and

• (ii) the trading interests of the investment firm,

and

• (b) allow 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) in respect of shares admitted to trading on a regulated market or traded on a trading venue, and

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

unless the client otherwise expressly instructs the investment firm, the investment 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 investment firm transmits the client limit order to a trading venue.

• (4) Unless the Bank otherwise directs, an investment firm shall not have to comply with the obligation under this Regulation to make public a client limit order, where that order is large in scale compared with normal market size, as determined under Article 4 of Regulation (EU) No 600/2014.

• (5) A direction that paragraph (4) does not apply may be given by the Bank on a firm by firm basis or by a generally applicable notice.

Obligations of investment firms when appointing tied agents

• (a) promoting the services of the investment firm,

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

• (c) placing financial instruments, or

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

• (i) 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 investment firm, and

• (b) shall ensure that the tied agent discloses—

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

• (ii) the investment firm which the tied agent is representing,

when contacting, or before dealing with, any client or potential client.

• (3) Tied agents operating in the State may not handle clients’ money or clients’ financial instruments.

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

• (5) The Bank shall establish, update on a regular basis and, in such manner as it sees fit, make available a public register of tied agents of investment firms and include on the public register all tied agents established within the State.

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

• (a) is of good repute, and

• (b) possesses the appropriate general, commercial and professional knowledge and competence to enable the tied agent to deliver—

• (i) the investment services or ancillary services which the tied agent is to deliver, and

• (ii) the accurate communication of all relevant information about those services,

to the client or potential client of the investment firm for whom the tied agent acts or will act.

• (7) For the purposes of paragraph (6), an investment firm shall demonstrate to the Bank that a tied agent satisfies that paragraph, but the Bank shall not be bound by what has been put forward to it by the firm in that regard in deciding whether to include a tied agent on the public register.

• (8) If an investment firm appoints a tied agent who provides on behalf of the investment firm—

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

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

the investment firm shall take adequate measures to avoid any negative impact that the services and activities not covered by these Regulations could have on the services and activities to which these Regulations apply.

• (9) The Bank may collaborate with investment firms and credit institutions, their associations and other entities in registering tied agents and in monitoring compliance of tied agents with the requirements of paragraphs (5) to (7).

• (10) Tied agents may be registered by an investment firm, credit institution or their associations and other entities under the supervision of the Bank.

• (11) An investment firm shall appoint only tied agents entered in the register established and maintained under this Regulation or, where an investment firm proposes to appoint a tied agent established in another Member State, only tied agents entered in the public register established and maintained in that Member State for the purposes of the Directive.

• (12) The Bank may adopt or retain additional requirements more stringent than those set out in paragraph (6) to those contained in these Regulations on tied agents registered in the State.

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

Transactions executed with eligible counterparties

• (a) execute orders on behalf of clients,

• (b) deal on own account,

• (c) receive and transmit orders, or

• (d) do any combination of the foregoing,

may bring about or enter into transactions with eligible counterparties without being obliged to comply with Regulations 31, 32(1) to (3) and (12) to (20), 33(1) to (12) and (17), 35 and 36(1) in respect of those transactions or in respect of any ancillary service directly relating to those transactions.

• (2) When dealing with eligible counterparties, an investment firm shall—

• (a) act honestly, fairly and professionally, and

• (b) communicate in a way which is fair, clear and not misleading,

taking into account the nature of the eligible counterparty and its business.

• (3) For the purposes of this Regulation the following are eligible counterparties—

• (a) investment firms,

• (b) credit institutions,

• (c) insurance companies,

• (d) UCITS and their management companies,

• (e) pension funds and their management companies,

• (f) other financial institutions authorised or regulated under the law of the European Union or under the national law of a Member State,

• (g) national governments and their corresponding offices including public bodies that deal with public debt at a national level,

• (h) central banks, and

• (i) supranational organisations.

• (4) An entity that is an eligible counterparty—

• (a) may request an investment firm, 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 the provisions specified in paragraph (1), and

• (b) if the investment firm accedes to the request, the entity shall be treated under these Regulations as set out in subparagraph (a).

• (5) Entities other than those specified in paragraph (3) may also be recognised as an eligible counterparty by an investment firm if they meet the pre-determined proportionate requirements, including quantitative thresholds as set out in Commission Delegated Regulation EU 2017/565.

• (6) In the event of a transaction where the prospective counterparties are located in different jurisdictions, the investment firm shall defer to the status of the other undertaking as determined by the law or measures of the Member State in which that undertaking is established.

• (7) An investment firm which enters into a transaction with an entity who may be treated as an eligible counterparty in accordance with paragraphs (3) and (5) must obtain the express confirmation from the prospective counterparty, either—

• (a) in the form of a general agreement, or

• (b) on a transaction by transaction basis,

that the entity agrees to be treated as an eligible counterparty.

• (8) Investment firms may also recognise as eligible counterparties—

• (a) third country entities equivalent to those categories of entities referred to in paragraph (3), and

• (b) third country undertakings equivalent to those referred to in paragraphs (3) and (5) on the same conditions and subject to the same requirements as in paragraphs (6) and (7).

Chapter 3 Market transparency and integrity

Monitoring of compliance with rules of MTF or OTF and with other legal obligations

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

• (b) monitor the orders sent, including cancellations and the transactions undertaken by their members or participants or users under their systems, in order to identify—

• (i) infringements of its rules,

• (ii) disorderly trading conditions,

• (iii) conduct that may indicate behaviour that is prohibited under Regulation (EU) No 596/2014, or

• (iv) system disruptions in relation to a financial instrument,

• (c) deploy the resources necessary to ensure that the monitoring carried out under subparagraph (b) is effective,

• (d) inform the Bank immediately of—

• (i) significant infringements of its rules,

• (ii) disorderly trading conditions,

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

• (iv) systems disruption in relation to a financial instrument,

and

• (e) provide, without undue delay, full assistance to the Bank in investigating and prosecuting market abuse occurring on or through its systems.

• (2) The Bank shall notify the competent authorities of the other Member States and ESMA of information received pursuant to paragraph (1)(d), but in the case of conduct that may involve market abuse, the Bank must be convinced that such behaviour is being or has been carried out.

Suspension and removal of financial instruments from trading on MTF or OTF

• (a) the investors’ interests, or

• (b) the orderly functioning of the market.

• (2) An investment firm or a market operator operating an MTF or OTF that suspends or removes from trading a financial instrument shall also suspend or remove derivatives referred to in paragraphs 4 to 10 of Part 3 of Schedule 1 that relate or are referenced to the financial instrument where necessary to support the objectives of the suspension or removal of the underlying financial instrument.

• (3) Where a decision to suspend or remove a financial instrument or related derivative has been made under paragraphs (1) or (2), the investment firm or market operator operating that MTF or OTF shall make public its decision and communicate the decision to the Bank.

• (4) Where paragraphs (2) and (3) apply, the Bank shall require that other regulated markets, MTFs, OTFs and systematic internalisers which fall under its jurisdiction and trade the same financial instrument, or derivatives referred to in paragraphs 4 to 10 of Part 3 of Schedule 1 that relate or are referenced to the financial instrument, to also suspend or remove the financial instrument or derivatives from trading, where the suspension or removal is due to—

• (a) suspected market abuse,

• (b) a takeover bid, or

• (c) the non-disclosure of inside information about the issuer or financial instrument infringing Articles 7 and 17 of Regulation (EU) No 596/2014,

except where such suspension or removal could cause significant damage to the investors interests or to the orderly functioning of the market.

(5)(a) Where the Bank requires the suspension or removal of a financial instrument from trading on one or more regulated markets the Bank shall without delay make public its decision and communicate this decision to ESMA and the competent authorities of the other Member States.

• (b) Where the Bank makes a decision not to suspend or remove from trading the financial instrument or derivatives referred to in paragraphs 4 to 10 of Part 3 of Schedule 1 that relate or are referenced to that financial instrument it shall communicate its decision to the competent authorities of the other Member States and ESMA and provide an explanation for this decision.

• (6) Where the Bank is informed by the competent authority of another Member State of the suspension or removal of a financial instrument or derivative referred to in paragraphs 4 to 10 of Part 3 of Schedule 1 that relate or are referenced to a financial instrument from trading on one or more of its regulated markets, MTFs, OTFs or systematic internalisers, the Bank shall direct the suspension or removal of that financial instrument or derivatives from trading, where the suspension or removal is due to—

• (a) suspected market abuse,

• (b) a take-over bid, or

• (c) the non-disclosure of inside information about the issuer or financial instrument infringing Articles 7 and 17 of Regulation (EU) No 596/2014,

except where such suspension or removal could cause significant damage to the investors interests or to the orderly functioning of the market.

• (7) The notification procedure referred to in paragraph (5) shall also apply—

• (a) when the suspension from trading of a financial instrument or derivatives referred to in paragraphs 4 to 10 of Part 3 of Schedule 1 that relate or are referenced to a financial instrument is lifted, or

• (b) where the decision to suspend or remove from trading a financial instrument or derivatives referred to in paragraphs 4 to 10 of Part 3 of Schedule 1 that relate or are referenced to that financial instrument is taken by the Bank pursuant to Regulation 92(4)(m) or (n).

Chapter 4 SME growth markets

SME growth markets

• (2) The Bank may register the MTF as an SME growth market where it is satisfied that—

• (a) at least 50% of the issuers whose financial instruments are admitted to trading on the MTF are SMEs at the time when the MTF is registered as an SME growth market and in any calendar year thereafter,

• (b) appropriate criteria are set for initial and ongoing admission to trading of financial instruments of issuers on the market,

• (c) on initial admission to trading of financial instruments on the market there is sufficient information published to enable investors to make an informed judgment about whether or not to invest in the financial instruments, in the form of either an appropriate admission document or of a prospectus if the requirements laid down in the Prospectus (Directive 2003/71/EC) Regulations 2005 are applicable in respect of a public offer being made in conjunction with the initial admission to trading of the financial instrument on the MTF,

• (d) there is appropriate ongoing periodic financial reporting by or on behalf of an issuer on the market, for example audited annual reports,

• (e) issuers on the market as defined in point (21) of paragraph (1) of Article 3 of Regulation (EU) No 596/2014, persons discharging managerial responsibilities as defined in point (25) of that paragraph and persons closely associated with them as defined in point (26) of that paragraph comply with relevant requirements applicable to them under that Regulation,

• (f) regulatory information concerning the issuers on the market is stored and disseminated to the public, and

• (g) there are effective systems and controls aiming to prevent and detect market abuse on that market as required under Regulation (EU) No 596/2014.

• (3) The investment firm or market operator operating the MTF—

• (a) shall also comply with other obligations under these Regulations relevant to the operation of a MTF, and

• (b) may impose on issuers requirements additional to those in paragraph (2).

• (4) The Bank may deregister a MTF as an SME growth market where—

• (a) the investment firm or market operator operating the market applies for its deregistration, or

• (b) the requirements in paragraph (2) are no longer complied with in relation to the MTF.

• (5) The Bank shall notify ESMA as soon as possible of the registration or deregistration of a MTF as an SME growth market.

• (6) Where a financial instrument of an issuer is admitted to trading on one SME growth market, the financial instrument may also be traded on another SME growth market only where the issuer—

• (a) has been informed, and

• (b) has not objected,

and in such a case the issuer will not be subject to any obligation relating to corporate governance or initial, ongoing or ad hoc disclosure with regard to the latter SME growth market.

PART 5 RIGHTS OF EU INVESTMENT FIRMS AND CREDIT INSTITUTIONS

Freedom to provide investment services and activities

• (a) any investment firm authorised and supervised by the competent authority of a Member State other than the State in accordance with the Directive (referred to in this Part as a “Member State investment firm”), and

• (b) any credit institution authorised in a Member State, other than the State, in accordance with Directive 2013/36/EU (referred to in this Part as a “Member State credit institution”),

may provide investment services or perform investment activities (or both), as well as ancillary services, within the State, provided that the services and activities are covered by its authorisation and that ancillary services may only be provided together with investment services or investment activities.

• (2) The Bank shall not impose any additional requirements on a Member State investment firm or Member State credit institution in respect of matters covered by these Regulations.

• (3) A Member State investment firm intending to—

• (a) provide investment services or investment activities (with or without ancillary services) in the State for the first time, or

• (b) change the range of investment services or activities which the firm provides within the State,

shall communicate to its home competent authority the information specified in paragraph (4).

• (4) The information referred to in paragraph (3) is the following:

• (a) the Member State investment firm’s intention to operate in the State;

• (b) the Member State investment firm’s proposed programme of operations in the State, including in particular the investment services, investment activities and ancillary services that it 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.

• (5) The Bank shall publish the identity of the tied agents that the Member State investment firm intends to use to provide investment services and activities in the State.

• (6) In the event of a change in any of the particulars of the information communicated under paragraph (3), the Member State investment firm 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) A Member State credit institution intending to provide investment services or activities as well as ancillary services in accordance with paragraph (1) through tied agents shall communicate to the competent authority of its home Member State the identity of those tied agents.

• (8) The Bank shall publish the identity of the tied agents that the Member State credit institution intends to use to provide investment services and activities in the State.

• (9) Investment firms and market operators from other Member States operating MTFs and OTFs may provide appropriate arrangements in the State so as to facilitate access to and trading on those markets by remote users, members or participants established in the State.

• (10) A Member State investment firm or market operator operating an MTF or an OTF shall communicate to the competent authority of its home Member State when it intends to provide such arrangements in the State.

• (11) The Bank may request the identity of the remote members or participants of the MTF established in the State from the home Member State of the MTF.

Member State investment firms and Member State credit institutions establishing branches in the State

• (a) through the establishment of a branch, or

• (b) by the use of a tied agent established in a Member State outside its home Member State,

if the services and activities are permitted under the authorisation granted to a Member State investment firm or Member State credit institution in its home Member State.

• (2) Ancillary services may only be provided together with an investment service or activity.

• (3) The Bank shall not impose any additional requirements except those allowed under paragraph (12), on the organisation and operation of the branch in respect of the matters covered by these Regulations.

• (4) A Member State investment firm intending to establish a branch in the State or to use tied agents in the State shall communicate to the competent authority of the Member State investment firm’s home Member State—

• (a) its intention to establish a branch or use tied agents in the State,

• (b) its proposed programme of operations in the State, stating in particular—

• (i) the investment services and activities and ancillary services that it 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 so, the identity of the tied agents, a description of the intended use of the tied agents and their organisational structure, including reporting lines, indicating how the agents fit into the corporate structure of the Member State investment firm,

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

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

• (5) 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 if one is established in the State, and

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

• (6) A Member State investment firm may establish a branch in the State and commence business on the earlier of—

• (a) the date the Bank confirms receipt from the competent authority of its home Member State of—

• (i) the information referred to in paragraph (4), and

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

or

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

• (7) In the event of a change in any of the information communicated in accordance with paragraph (4) by a Member State investment firm it shall give written notice of that change to the competent authority of its home Member State at least one month before implementing the change.

• (8) Any Member State credit institution intending to establish a branch in the State or to use a tied agent established in a Member State other than its home Member State to provide investment services or activities as well as ancillary services in accordance with these Regulations shall notify the competent authority of its home Member State and provide it with the identity of the tied agent and the information referred to in paragraph (4).

• (9) On receipt of a communication from the Bank or, failing such communication from the Bank, at the latest after two months from the date of transmission of the communication by the competent authority of the home Member State, the tied agent can commence business.

• (10) The tied agent shall be subject to the provisions of these Regulations relating to branches.

• (11) The Bank shall be responsible for ensuring the compliance of the branch of a Member State investment firm with Regulations 31 to 33, 35 and 36 and Articles 14 to 26 of Regulation (EU) No 600/2014.

• (12) In monitoring and enforcing compliance of a branch with Regulations 31 to 33, 35 and 36 and Articles 14 to 26 of Regulation (EU) No 600/2014, 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 prejudice to the generality of subparagraph (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 31 to 33, 35 and 36 and Articles 14 to 26 of Regulation (EU) No 600/2014 with respect to the services the investment firm provides in the State through the branch.

• (13) Where a Member State investment firm has a branch in the State, the competent authority of the home 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 and credit institutions establishing branches in other Member States

• (a) its intention to establish a branch in the other Member State,

• (b) its proposed programme of operations in the host Member State, stating in particular—

• (i) the investment services and ancillary services that it 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 so, 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) 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 paragraph (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 investor compensation scheme of which the investment firm is a member in accordance with the Investor Compensation Act 1998 ,

and

• (b) inform the investment firm of the communication referred to in subparagraph (a).

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

• (a) the 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 inform the competent authority of the host Member State of that change.

• (4) In the event that the Bank decides not to communicate the information referred to paragraph (2) to the competent authority of the host Member State, the Bank shall give the reasons for that decision to the investment firm within 3 months after receiving all the information referred in paragraph (1).

• (5) 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.

• (6) A credit institution intending to use a tied agent to provide investment services or activities as well as ancillary services in another Member State, in accordance with the Directive, shall notify the Bank and in the case of a tied agent established in another Member State provide it with the information referred to in paragraph (1).

• (7) The Bank shall—

• (a) in the case of a tied agent established in the State, within one month of the receipt of all the information referred to in paragraph (1), communicate to the competent authority of the host Member State designated as contact point in accordance with Article 79(1) of the Directive the identity of the tied agents that the credit institution intends to use to provide investment services in that State, or

• (b) in the case of a tied agent established in another Member State, unless the Bank has reason to doubt the adequacy of the administrative structure or the financial situation of a credit institution that communicates information to the Bank, taking into account the services that the institution intends to provide, within 3 months after receiving the information, communicate to the competent authority of the host Member State the information referred to in paragraph (2) and inform the credit institution of that communication.

• (8) In the event that the Bank decides not to communicate the information referred to in paragraph (7)(b), it shall give the reasons for that decision to the credit institution within 3 months after receiving all the information referred to in paragraph (1).

Access to regulated markets

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

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

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

• (2) The right of direct and indirect 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 members or participants, and

• (b) is not and must not be restricted to the clearing and settlement of transactions in financial instruments undertaken on a trading venue 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 transactions, 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.

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

• (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 the MTF, taking into account the conditions for settlement systems established under Regulation 46(3).

• (3) In order to avoid undue duplication of control, the Bank shall take into account the oversight and supervision of the clearing and settlement system already exercised by relevant supervisory authorities of other Member States as overseers of clearing and settlement systems or by other supervisory authorities with competence in relation to such systems.

PART 6 PROVISION OF INVESTMENT SERVICES AND INVESTMENT ACTIVITIES TO CERTAIN CLIENTS BY THIRD COUNTRY FIRMS

Provision of services or performance of activities to certain clients through establishment of branch

• (2) A branch of a third-country firm intending to provide the services referred to in paragraph (1) in the State is required by this Regulation to obtain a prior authorisation from the Bank in accordance with the following conditions—

• (a) the services for which the third-country firm has sought authorisation is subject to authorisation and supervision in the third country where the third-country firm is established and the third-country firm is authorised so that the competent authority of the third country pays due regard to any recommendations of FATF in the context of anti-money laundering and countering the financing of terrorism,

• (b) co-operation arrangements that include provisions regulating the exchange of information for the purpose of preserving the integrity of the market and protecting investors are in place between the Bank and the competent authorities where the third-country firm is established,

• (c) there is sufficient initial capital at free disposal of the branch,

• (d) one or more persons are appointed to be responsible for the management of the branch and they all comply with Regulations 76 and 79 of the European Union (Capital Requirements) Regulations 2014,

• (e) the third country where the third-country firm is established has entered into an agreement with the State, which fully complies with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and on Capital and ensures an effective exchange of information in tax matters, including, if any, multilateral tax agreements; and

• (f) the firm belongs to an investor-compensation scheme authorised or recognised in accordance with Directive 97/9/EC.

Obligation to provide information to Bank etc.

• (a) the name of the authority responsible for its supervision in the third country concerned and, if more than one authority is responsible for supervision, the details of the respective areas of competence,

• (b) all relevant details of the firm (including its name, legal form and registered office and address, the members of the management body, and the shareholders who hold a qualifying holding in the firm) and a programme of operations setting out the investment services and activities, as well as the ancillary services, to be provided and the organisational structure of the branch, including a description of any outsourcing to third parties of essential operating functions,

• (c) the name of the persons responsible for the management of the branch and the relevant documents to demonstrate compliance with the requirements of Regulations 76 and 79 of the European Union (Capital Requirements) Regulations 2014, and

• (d) information about the initial capital at free disposal of the branch.

Granting of authorisation

• (a) the conditions specified in Regulation 48 are fulfilled, and

• (b) the branch of the third country firm will be able to comply with the provisions referred to in paragraph (2).

• (2) The branch of the third-country firm authorised in accordance with paragraph (1) shall comply with the requirements of Regulations 23 to 27, 30 to 33, 35 and 36(1) and 38 to 40 and of Articles 3 to 26 of Regulation (EU) No 600/2014, and the measures adopted pursuant thereto, and shall be subject to the supervision of the Bank.

• (3) The Bank shall not impose any additional requirements on the organisation and operation of the branch in respect of the matters covered by these Regulations (but the foregoing expression “organisation and operation of the branch” is distinct from matters pertaining generally in respect of a branch) and, furthermore, the Bank shall not treat any branch of third-country firms more favourably than firms established in the European Union.

• (4) The applicant for an authorisation to establish as a branch of a third-country firm shall be informed within 6 months after the receipt by the Bank of the complete application whether or not the authorisation has been granted.

Provision of service at exclusive use of the client

• (2) An initiative by a retail client or a professional client within the meaning of paragraph 4 of Schedule 2 shall not entitle the third-country firm to market otherwise than through the branch new categories of investment products or investment services to that client.

Withdrawal of authorisation

• (a) does not make use of the authorisation within 12 months,

• (b) expressly renounces the authorisation,

• (c) has provided no investment services or performed no investment activity for the preceding 6 months unless the Bank has provided for the authorisation to lapse in such a case,

• (d) has obtained the authorisation by making false statements or by any other irregular means,

• (e) no longer meets the conditions under which the authorisation was granted, or

• (f) has contravened any provision of these Regulations that governs the operating conditions for investment firms and which are applicable to third-country firms and the contravention or contraventions is or are, in the opinion of the Bank, of a serious and systematic nature.

PART 7 REGULATED MARKETS

Prerequisites for authorisation to operate regulated market

• (a) be reserved to a legal person using, for the operation of the regulated market, a system which complies with this Part, and

• (b) be granted only if the person satisfies the Bank that both the person 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 or managed 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.

Applicable law to trading conducted on domestic regulated market

Application to Bank for authorisation to operate regulated market

• (a) a programme of operations setting out 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 the organisational structure, 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 or other constituting documents of the market operator of the proposed regulated market.

Grant of authorisation by 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,

and the Bank may from time to time vary conditions or requirements subsequent to granting an application for authorisation.

• (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) For the purposes of these Regulations:

• (a) the Main Securities Market of the Irish Stock Exchange PLC is deemed to be a regulated market,

• (b) the Irish Stock Exchange PLC is deemed to be the market operator of that regulated market, and

• (c) the MTFs of the Irish Stock Exchange PLC that are in existence before 3 January 2018 are deemed to be MTFs.

Refusal of authorisation by Bank

• (a) that the proposed market operator is a company incorporated by statute or under the Companies Act 2014 ,

• (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 which the Bank may impose,

• (c) that the proposed market operator has the minimum level of capital specified by the Bank,

• (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 followed 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 of it 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 which 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.

• (2) The Bank shall refuse authorisation if—

• (a) it is not satisfied that the members of the management body of the market operator are of good repute and possess sufficient knowledge, skills and experience, and commit sufficient time, to perform their functions, or

• (b) there are objective and demonstrable grounds for believing that the management body of the market operator may pose a threat to its effective, sound and prudent management and to the adequate consideration of the integrity of the market.

• (3) In the process of the authorisation of a regulated market, the person or persons who effectively direct the business and operations of an already authorised regulated market in accordance with these Regulations shall be deemed to comply with the requirements set out in paragraph (2)(a).

Power of Bank to obtain further information

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

• (b) instruct an authorised officer to—

• (i) make such inquiries, or

• (ii) carry out such investigations,

as may be necessary for the purpose of properly evaluating the application.

Prohibition against false or misleading application to operate regulated market

• (a) apply 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 to operate a regulated market, or

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

Compliance by market operators of regulated market

• (2) 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.

Review and monitoring by Bank

• (2) The Bank shall, at all times, monitor the compliance of regulated markets with the conditions and requirements for authorisation under this Part.

Withdrawal of authorisation

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

• (b) expressly renounces the authorisation,

• (c) obtained the authorisation by making false statements or by any other irregular means,

• (d) no longer meets the conditions under which the authorisation was granted or the requirements for authorisation specified in Regulation 57,

• (e) is being wound up, or

• (f) has contravened any provision of these Regulations that governs the operation of regulated markets or Regulation (EU) No 600/2014 and the contravention or contraventions is or are, in the opinion of the Bank, of a serious and systematic nature.

• (2) The Bank may withdraw an authorisation to operate a regulated market if the regulated market has not been in operation for the immediately preceding 6 months.

• (3) Where the Bank has withdrawn an authorisation in accordance with paragraph (1) or (2) the Bank shall notify ESMA of the withdrawal.

Revocation of authorisation by Court

• (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

• (c) in one or more of the circumstances described in paragraph (2),

and on the making of such an application the Court may grant such an order accordingly.

• (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 under which the Bank performs 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;

• (c) the authorisation was obtained by knowingly or recklessly—

• (i) making false or misleading statements, or

• (ii) using false or misleading information;

• (d) the market operator has systematically failed to comply, or failed to comply to a material degree, with a condition provided in, or a requirement of, these Regulations or Regulation (EU) No 600/2014;

• (e) 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;

• (f) 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 market operator’s business adequate capital resources or adequate other financial resources;

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

• (h) the market operator has infringed to a material degree a code of conduct or rules of conduct issued under the Central Bank Acts 1942 to 2015;

• (i) a director, manager or qualifying shareholder of the market operator no longer satisfies the Bank as to the matters specified in Regulation 57(1)(d) or (e);

• (j) the market operator—

• (i) has failed to comply with a condition, requirement or direction imposed under these Regulations or Regulation (EU) No 600/2014, 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;

• (k) 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 or Regulation (EU) No 600/2014.

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

• (4) The Bank shall not apply to the Court to revoke an authorisation on the grounds set out in paragraph (2)(i) 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 as the Bank may specify.

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

Bank to give notice of proposed withdrawal of authorisation

• (a) serve notice on the operator of the regulated market of its intention, and

• (b) state its reasons in the notice.

Publication of withdrawal of authorisation

Requirements for management body of market operator

• (a) all members of its management body are at all times of good repute and possess sufficient knowledge, skills and experience to perform their duties, and

• (b) the overall composition of its management body reflects an adequately broad range of experience.

• (2) A market operator shall ensure that the members of its management body shall, in particular, fulfil the requirements set out in paragraphs (3) to (7).

• (3) All members of the management body shall commit sufficient time to perform their functions in the market operator.

• (4) Subject to paragraph (7), the number of directorships which may be held by a member of the management body at the same time shall take into account individual circumstances and the nature, scale and complexity of the market operator’s activities.

• (5) The members of the management body shall possess adequate collective knowledge, skills and experience to be able to understand the market operator’s activities, including the main risks.

• (6) Each member of its management body shall act with honesty, integrity and independence of mind to effectively assess and challenge the decisions of the senior management where necessary and to effectively oversee and monitor decision-making.

• (7) Unless representing the State, members of the management body of a market operator that is significant in terms of its size, internal organisation and the nature, scale and the complexity of its activities shall, subject to paragraphs (8) and (9), not hold more than one of the following combinations of directorships at the same time:

• (a) one executive directorship with two non-executive directorships;

(b)4 non-executive directorships.

• (8) For the purposes of paragraph (7) the following shall count as a single directorship:

• (a) executive or non-executive directorships held within the same group;

• (b) executive or non-executive directorships held within undertakings in which the market operator holds a qualifying holding.

• (9) Directorships in organisations which do not pursue predominantly commercial objectives shall be exempt from the limitation on the number of directorships in paragraphs (4) and (7).

• (10) The Bank may authorise members of the management body of a market operator to hold one additional non-executive directorship.

• (11) The Bank shall regularly inform ESMA of authorisations under paragraph (10).

• (12) A market operator shall devote adequate human and financial resources to the induction and training of members of the management body.

Nomination committee

• (2) The nomination committee shall—

• (a) identify and recommend, for the approval of the management body or for approval of a general meeting, candidates to fill vacancies in the management body and, in doing so—

• (i) evaluate the balance of knowledge, skills, diversity and experience of the management body,

• (ii) prepare a description of the roles and capabilities for a particular appointment, and assess the time commitment expected, and

• (iii) if such underrepresentation exists, decide on a target for the representation of the underrepresented gender in the management body and prepare a policy on how to increase the number of the underrepresented gender in the management body in order to meet that target,

• (b) at least annually, assess the structure, size, composition and performance of the management body and make recommendations to the management body with regard to any changes,

• (c) at least annually, assess the knowledge, skills and experience of individual members of the management body and of the management body collectively, and report to the management body accordingly, and

• (d) periodically review the policy of the management body for selection and appointment of senior management and make recommendations to the management body.

• (3) The nomination committee shall in performing its duties—

• (a) to the extent possible and on an ongoing basis, take account of the need to ensure that the management body’s decision-making is not dominated by any one individual or small group of individuals in a manner that is detrimental to the interests of the market operator as a whole, and

• (b) use any forms of resources that it considers to be appropriate, including external advice.

Further requirements

• (2) A market operator shall ensure that its management body—