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PRIN 4.1 Principles: MiFID business

PRIN 4.1.1 G

2 PRIN 3.1.6 R ensures that the Principles do not impose obligations upon firms which are inconsistent with an5EU5instrument4. If a Principles does purport to impose such an obligation PRIN 3.1.6 R disapplies that Principle but only to the extent necessary to ensure compliance with European law. This disapplication has practical effect only for certain matters covered by MiFID, which are explained in this section.

4 5

Where?

PRIN 4.1.2 G

Under PRIN 3.3.1 R, the territorial application of a number of Principles to a UK MiFID investment firm is extended to the extent that another applicable rule which is relevant to an activity has a wider territorial scope. Under PRIN 3.1.1 R, the territorial application of a number of Principles to an EEAMiFID investment firm is narrowed to the extent that responsibility for the matter in question is reserved to the firm'sHome State regulator. These modifications are relevant to Principles 1, 2, 3, 6, 7, 8, 9 and 10. We have added further guidance in PERG on the ability of a Host State to impose conduct of business requirements (see Q67).3

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PRIN 4.1.3 G

Principles 4, 5 and 11 will have the same scope of territorial application for MiFID business as for other business.

What?

PRIN 4.1.4 G
  1. (1)

    Certain requirements under MiFID are disapplied for:

    1. (a)

      eligible counterparty business;

    2. (b)

      transactions concluded under the rules governing a multilateral trading facility between its members or participants or between the multilateral trading facility and its members or participants in relation to the use of the multilateral trading facility;

    3. (c)

      transactions concluded on a regulated market between its members or participants.

  2. (2)

    Under PRIN 3.1.6 R, these disapplications may affect Principles 1, 2, 6 and 9. PRIN 3.1.6 R applies only to the extent that the application of a Principle would be contrary to the UK's obligations under a Single Market Directive in respect of a particular transaction or matter. In line with MiFID, these limitations relating to eligible counterparty business and transactions under the rules of a multilateral trading facility or on a regulated market only apply in relation to a firm's conduct of business obligations to its clients under MiFID. They do not limit the application of those Principles in relation to other matters, such as client asset protections, systems and controls, prudential requirements and market integrity. Further information about these limitations is contained in 1COBS 1 Annex 1.1

  3. (3)

    Principles 3, 4, 5, 7, 8, 10 and 11 are not limited in this way.

PRIN 4.1.5 G

Although Principle 8 does not apply to eligible counterparty business, a firm will owe obligations in respect of conflicts of interest set out in SYSC 10 which are wider than those contained in Principle 8 in that they apply to eligible counterparty business.