MiFID2 Delegated Regulation April 2016
SECTION6CLIENT ORDERHANDLING
Article67
Generalprinciples
(Articles 28(1) and 24(1) of Directive2014/65/EU)
1.Investment firms shall satisfy the following conditions when carrying outclient orders:
(a)ensurethatordersexecutedonbehalfofclientsarepromptlyandaccurately recorded andallocated;
(b)carry out otherwise comparable client orders sequentially and promptlyunless the characteristics of the order or prevailing market conditions makethis impracticable, or the interests of the client requireotherwise;
(c)inform a retail client about any material difficulty relevant to theproper carrying out of orders promptly upon becoming aware of thedifficulty.
2.Whereaninvestmentfirmisresponsibleforoverseeingorarrangingthesettlement ofanexecutedorder,itshalltakeallreasonablestepstoensurethatanyclient financial instruments or client funds received in settlement of that executed orderare promptly and correctly delivered to the account of the appropriateclient.
3.Aninvestmentfirmshallnotmisuseinformationrelatingtopendingclientorders, andshalltakeallreasonablestepstopreventthemisuseofsuchinformationbyany of its relevantpersons.
Article68
Aggregation and allocation oforders
(Articles 28(1) and 24(1) of Directive2014/65/EU)
1.Investment firms shall not carry out a client order or a transaction for own accountin aggregation with another client order unless the following conditions aremet:
(a)itisunlikelythattheaggregationofordersandtransactionswillworkoverall to the disadvantage of any client whose order is to beaggregated;
(b)itisdisclosedtoeachclientwhoseorderistobeaggregatedthattheeffectof aggregation may work to its disadvantage in relation to a particularorder;
(c)an order allocation policy is established and effectively implemented, providing for the fair allocation of aggregated orders and transactions, includinghowthevolumeandpriceofordersdeterminesallocationsandthe treatment of partialexecutions.
2.Whereaninvestmentfirmaggregatesanorderwithoneormoreotherclientorders andtheaggregatedorderispartiallyexecuted,itshallallocatetherelatedtradesin accordance with its order allocationpolicy.
Article69
Aggregation and allocation of transactions for ownaccount
(Articles 28(1) and 24(1) of Directive2014/65/EU)
1.Investment firms which have aggregated transactions for own account with oneor more client orders shall not allocate the related trades in a way that is detrimental toa client.
2.Where an investment firm aggregates a client order with a transaction forown accountandtheaggregatedorderispartiallyexecuted,itshallallocatetherelated trades to the client in priority to thefirm.
Where an investment firm is able to demonstrate on reasonable grounds thatwithout the combination it would not have been able to carry out the order onsuch advantageous terms, or at all, it may allocate the transaction for ownaccount proportionally,inaccordancewithitsorderallocationpolicyreferredtoin Article 68(1)(c).
3.As part of the order allocation policy referred to in Article 68(1)(c), investmentfirms shallputinplaceproceduresdesignedtopreventthereallocation,inawaythatis detrimentaltotheclient,oftransactionsforownaccountwhichareexecutedin combination with clientorders.
Article70
Prompt fair and expeditious execution of client orders and publication ofunexecuted client limit orders for shares traded on a tradingvenue
(Article 28 of Directive2014/65/EU)
1.A client limit order in respect of shares admitted to trading on a regulated marketor traded on a trading venue which have not been immediately executedunder prevailing market conditions as referred to in Article 28(2) of Directive2014/65/EU shallbeconsideredavailabletothepublicwhentheinvestmentfirmhassubmitted the order for execution to a regulated market or a MTF or the order hasbeen
published by a data reporting services provider located in one Member State andcan be easily executed as soon as market conditionsallow.
2.RegulatedmarketsandMTFsshallbeprioritisedaccordingtothefirm’sexecution policy to ensure execution as soon as market conditionsallow.