In order to help firms which are subject to the requirements of MiFID to understand the full extent of those requirements, this sourcebook also reproduces a number of provisions of the directly applicable MiFID Org Regulation, marked with the status letters “EU”. The authentic provisions of the MiFID Org Regulation are directly applicable to firms in relation to their MiFID business.
This sourcebook does not reproduce the MiFID Org Regulation in its entirety. A firm to which provisions of the MiFID Org Regulation applies should refer to the electronic version of the Official Journal of the European Union for:
Where this sourcebook, or the rule in GEN 2.2.22AR, applies provisions of the MiFID Org Regulation as if they were rules, (2) applies to enable firms to correctly interpret and understand the application of those provisions.
In this sourcebook, a word or phrase found in a provision marked “EU” and referred to in column (1) of the table below has the meaning indicated in the corresponding row of column (2) of the table.
“client” and “potential client”
“conditions specified in Article 3(2)”
as defined in article 4(1)(49) of MiFID
“distributing units in collective investment undertakings”
distributing units in a UCITS
client money that a firm receives or holds for, or on behalf of, a client in the course of, or in connection with, its MiFID business and (if the context requires) its equivalent business of a third country investment firm.
as defined in article 4(1)(34) of MiFID
“investment firm” and “firm”
“investment service” and “investment services and activities”
“portfolio management” and “portfolio management service”
“professional client covered by Section 1 of Annex II to Directive 2014/65/EU”
“professional client in accordance with Section 2 of Annex II to Directive 2014/65/EU”
“Regulation (EU) No. 1286/2014”
In this sourcebook, where a reproduced provision of an article of the MiFID Org Regulation refers to another part of the MiFID Org Regulation, that other provision must also be read with reference to the table in (2).
In determining what constitutes the provision of information “in good time”, a firm should take into account, having regard to the urgency of the situation, the client’s need for sufficient time to read and understand the information before taking an investment decision.
A client is likely to require more time to review information given on a complex or unfamiliar product or service, or a product or service a client has no experience with, than a client considering a simpler or more familiar product or service, or where the client has relevant prior experience.
[Note: recital 83 of MiFID]
guidelines on certain aspects of the MiFID suitability requirements which also include guidelines on conduct of business obligations
. See [https://www.esma.europa.eu/system/files_force/library/esma35-43-869-_fr_on_guidelines_on_suitability.pdf?download=1];
guidelines on cross-selling practices. See [https://www.esma.europa.eu/sites/default/files/library/2016-574_en_guidelines_on_cross-selling_practices.pdf ]; and
guidelines on complex debt instruments and structured deposits. See [https://www.esma.europa.eu/sites/default/files/library/2015-1787_-_guidelines_on_complex_debt_instruments_and_structured_deposits.pdf ].