Requirement (MIFID)
Article 48 Aggregation and allocation of orders
Requirements MIFID - DIRECTIVE 2006/73/EC
Description
Description
1. Member States shall not permit investment firms to carry
out a client order or a transaction for own account in
aggregation with another client order unless the following
conditions are met:
(a) it must be unlikely that the aggregation of orders and
transactions will work overall to the disadvantage of any
client whose order is to be aggregated;
(b) it must be disclosed to each client whose order is to be
aggregated that the effect of aggregation may work to its
disadvantage in relation to a particular order;
(c) an order allocation policy must be established and
effectively implemented, providing in sufficiently precise
terms for the fair allocation of aggregated orders and
transactions, including how the volume and price of orders
determines allocations and the treatment of partial
executions.
2. Member States shall ensure that where an investment firm
aggregates an order with one or more other client orders and the
aggregated order is partially executed, it allocates the related
trades in accordance with its order allocation policy.
Comment
Applies to Articles 22(1) and 19(1) of Directive 2004/39/EC