Requirement (MIFID)
Article 32 Information requirements concerning safeguarding of client financial instruments or client funds
Requirements MIFID - DIRECTIVE 2006/73/EC
Description
Description
1. Member States shall ensure that, where investment firms
hold financial instruments or funds belonging to retail clients,
they provide those retail clients or potential retail clients with
such of the information specified in paragraphs 2 to 7 as is
relevant.
2. The investment firm shall inform the retail client or
potential retail client where the financial instruments or funds
of that client may be held by a third party on behalf of the
investment firm and of the responsibility of the investment firm
under the applicable national law for any acts or omissions of the
third party and the consequences for the client of the insolvency
of the third party.
3. Where financial instruments of the retail client or potential
retail client may, if permitted by national law, be held in an
omnibus account by a third party, the investment firm shall
inform the client of this fact and shall provide a prominent
warning of the resulting risks.
4. The investment firm shall inform the retail client or
potential retail client where it is not possible under national
law for client financial instruments held with a third party to be
separately identifiable from the proprietary financial instruments
of that third party or of the investment firm and shall provide a
prominent warning of the resulting risks.
5. The investment firm shall inform the client or potential
client where accounts that contain financial instruments or funds
belonging to that client or potential client are or will be subject
to the law of a jurisdiction other than that of a Member State and
shall indicate that the rights of the client or potential client
relating to those financial instruments or funds may differ
accordingly.
6. An investment firm shall inform the client about the
existence and the terms of any security interest or lien which the
firm has or may have over the client's financial instruments or
funds, or any right of set-off it holds in relation to those
instruments or funds. Where applicable, it shall also inform the
client of the fact that a depository may have a security interest or
lien over, or right of set-off in relation to those instruments or
funds.
7. An investment firm, before entering into securities financing
transactions in relation to financial instruments held by it on
behalf of a retail client, or before otherwise using such financial
instruments for its own account or the account of another client,
shall in good time before the use of those instruments provide
the retail client, in a durable medium, with clear, full and accurate
information on the obligations and responsibilities of the
investment firm with respect to the use of those financial
instruments, including the terms for their restitution, and on the
risks involved.
Comment
Applies to first indent of Article 19(3) of Directive 2004/39/EC