1. In this Regulation, ‘IP completion day’ has the meaning given in the European Union (Withdrawal) Act 2020.

This Regulation applies to:

1. (1)

   those persons described in Article 1(2) of Regulation 600/2014/EU; and

2. (2)

   the Financial Conduct Authority as a competent authority.

1. Where a term is defined in Directive 2014/65/EU (as that directive applied in the European Union immediately before IP completion day) that definition shall apply for the purposes of this Regulation except where it is defined in article 2 of Regulation No 600/2014/EU in which case that definition shall apply for the purposes of this Regulation.

2. The definition of all other terms defined in article 2 of Regulation 600/2014/EU shall apply for the purposes of this Regulation.

3. Article 2(1)(62) of Regulation 600/2014/EU applies for the purposes of this Regulation unless otherwise stated.

4. Any reference in these Regulations to a sourcebook is to a sourcebook in the Handbook of Rules and Guidance published by the FCA containing rules made by the FCA under FSMA, as the sourcebook has effect on IP completion day.

5. The ‘relevant area’ in relation to a financial instrument means the United Kingdom and such other countries or regions as have been specified by the FCA by direction for the purposes of Article 5 or Article 14 of Regulation (EU) No 600/2014, as the context requires.

6. References to the date of application of Regulation (EU) No 600/2014 mean the date of application of that Regulation in the European Union.

For the purposes of this Regulation, the following definitions apply:

1. (1)

   "portfolio trade" means transactions in five or more different financial instruments where those transactions are traded at the same time by the same client and as a single lot against a specific reference price;

2. (2)

   "give-up transaction" or "give-in transaction" means a transaction where an investment firm passes a client trade to, or receives a client trade from, another investment firm for the purpose of post-trade processing;

3. (3)

   "securities financing transaction" means a securities financing transaction as defined in Article 3(6) of Delegated Regulation (EU) 2017/577;

4. (5)

   "the Recognition Requirements Regulations" means the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 (SI 2001/995);

5. (6)

   "the AIFM Regulations" means the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773).

A transaction in shares does not contribute to the price discovery process where any of the following circumstances apply:

1. (a)

   the transaction is executed by reference to a price that is calculated over multiple time instances according to a given benchmark, including transactions executed by reference to a volume-weighted average price or a time-weighted average price;

2. (b)

   the transaction is part of a portfolio trade;

3. (c)

   the transaction is contingent on the purchase, sale, creation or redemption of a derivative contract or other financial instrument where all the components of the trade are to be executed only as a single lot;

4. (d)

   the transaction is executed by a management company as defined in section 237(2) of FSMA, or a UK AIFM as defined in the AIFM Regulations, which transfers the beneficial ownership of shares from one collective investment undertaking to another and where no investment firm is a party to the transaction;

5. (e)

   the transaction is a give-up transaction or a give-in transaction;

6. (f)

   the purpose of the transaction is to transfer shares as collateral in bilateral transactions or in the context of central counterparty (CCP) margin or collateral requirements or as part of the default management process of a CCP;

7. (g)

   the transaction results in the delivery of shares in the context of the exercise of convertible bonds, options, covered warrants or other similar derivatives;

8. (h)

   the transaction is a securities financing transaction;

9. (i)

   the transaction is carried out under the rules or procedures of a trading venue, a CCP or a central securities depository to effect a buy-in of unsettled transactions in accordance with Regulation (EU) No 909/2014 (or a similar third country law for the same type of transactions, where applicable).