Requirement (MIFID)
Article 17 Depositing client financial instruments
Requirements MIFID - DIRECTIVE 2006/73/EC
Description
Description
1. Member States shall permit investment firms to deposit
financial instruments held by them on behalf of their clients into
an account or accounts opened with a third party provided that
the firms exercise all due skill, care and diligence in the selection,
appointment and periodic review of the third party and of the
arrangements for the holding and safekeeping of those financial
instruments.
In particular, Member States shall require investment firms to
take into account the expertise and market reputation of the
third party as well as any legal requirements or market practices
related to the holding of those financial instruments that could
adversely affect clients’ rights.
2. Member States shall ensure that, if the safekeeping of
financial instruments for the account of another person is subject
to specific regulation and supervision in a jurisdiction where an
investment firm proposes to deposit client financial instruments
with a third party, the investment firm does not deposit those
financial instruments in that jurisdiction with a third party which
is not subject to such regulation and supervision.
3. Member States shall ensure that investment firms do not
deposit financial instruments held on behalf of clients with a
third party in a third country that does not regulate the holding
and safekeeping of financial instruments for the account of
another person unless one of the following conditions is met:
(a) the nature of the financial instruments or of the investment
services connected with those instruments requires them to
be deposited with a third party in that third country;
(b) where the financial instruments are held on behalf of a
professional client, that client requests the firm in writing to
deposit them with a third party in that third country.
Comment
Applies to Article 13(7) of Directive 2004/39/EC