Requirement (MIFID)
Article 13 Organisational requirements
Requirements MIFID - DIRECTIVE 2004/39/EC
Description
Description
1. The home Member State shall require that investment firms
comply with the organisational requirements set out in paragraphs 2 to
8.
2. An investment firm shall establish adequate policies and procedures
sufficient to ensure compliance of the firm including its managers,
employees and tied agents with its obligations under the provisions of
this Directive as well as appropriate rules governing personal transactions
by such persons.
3. An investment firm shall maintain and operate effective organisational
and administrative arrangements with a view to taking all reasonable
steps designed to prevent conflicts of interest as defined in
Article 18 from adversely affecting the interests of its clients.
4. An investment firm shall take reasonable steps to ensure continuity
and regularity in the performance of investment services and activities.
To this end the investment firm shall employ appropriate and proportionate
systems, resources and procedures.
5. An investment firm shall ensure, when relying on a third party for
the performance of operational functions which are critical for the provision
of continuous and satisfactory service to clients and the performance
of investment activities on a continuous and satisfactory basis,
that it takes reasonable steps to avoid undue additional operational risk.
Outsourcing of important operational functions may not be undertaken
in such a way as to impair materially the quality of its internal control
and the ability of the supervisor to monitor the firm's compliance with
all obligations.
An investment firm shall have sound administrative and accounting
procedures, internal control mechanisms, effective procedures for risk
assessment, and effective control and safeguard arrangements for information
processing systems.
6. An investment firm shall arrange for records to be kept of all
services and transactions undertaken by it which shall be sufficient to
enable the competent authority to monitor compliance with the requirements
under this Directive, and in particular to ascertain that the investment
firm has complied with all obligations with respect to clients or
potential clients.
7. An investment firm shall, when holding financial instruments
belonging to clients, make adequate arrangements so as to safeguard
clients' ownership rights, especially in the event of the investment firm's
insolvency, and to prevent the use of a client's instruments on own
account except with the client's express consent.
8. An investment firm shall, when holding funds belonging to clients,
make adequate arrangements to safeguard the clients' rights and, except
in the case of credit institutions, prevent the use of client funds for its
own account.
9. In the case of branches of investment firms, the competent
authority of the Member State in which the branch is located shall,
without prejudice to the possibility of the competent authority of the
home Member State of the investment firm to have direct access to
those records, enforce the obligation laid down in paragraph 6 with
regard to transactions undertaken by the branch.
10. In order to take account of technical developments on financial
markets and to ensure the uniform application of paragraphs 2 to 9, the
Commission shall adopt, in accordance with the procedure referred to in
Article 64(2), implementing measures which specify the concrete organisational
requirements to be imposed on investment firms performing
different investment services and/or activities and ancillary services or
combinations thereof.
Referenced requirement
Article 13 Meaning of critical and important operational functions
Article 16 Safeguarding of client financial instruments and funds
Article 11 Meaning of personal transaction
Article 18 Depositing client funds
Article 20 Reports by external auditors
Article 6 Compliance
Article 7 Risk management
Article 8 Record-keeping of transactions
Article 21 Conflicts of interest potentially detrimental to a client
Article 9 Responsibility of senior management
Article 10 Complaints handling
Article 51 Retention of records
Article 23 Record of services or activities giving rise to detrimental conflict of interest
Article 22 Conflicts of interest policy
Article 25 Additional organisational requirements where a firm produces and disseminates investment research
Article 19 Use of client financial instruments
Article 12 Personal transactions
Article 5 General organisational requirements
Article 15 Service providers located in third countries
Article 7 Record-keeping of client orders and decisions to deal
Article 14 Conditions for outsourcing critical or important operational functions or investment services or activities
Article 17 Depositing client financial instruments