Requirement (MIFID)
Article 40 Reporting obligations in respect of execution of orders other than for portfolio management
Requirements MIFID - DIRECTIVE 2006/73/EC
Description
Description
1. Member States shall ensure that where investment firms
have carried out an order, other than for portfolio management,
on behalf of a client, they take the following action in respect of
that order:
(a) the investment firm must promptly provide the client, in a
durable medium, with the essential information concerning
the execution of that order;
(b) in the case of a retail client, the investment firm must send
the client a notice in a durable medium confirming
execution of the order as soon as possible and no later
than the first business day following execution or, if the
confirmation is received by the investment firm from a
third party, no later than the first business day following
receipt of the confirmation from the third party.
Point (b) shall not apply where the confirmation would contain
the same information as a confirmation that is to be promptly
dispatched to the retail client by another person.
Points (a) and (b) shall not apply where orders executed on behalf
of clients relate to bonds funding mortgage loan agreements with
the said clients, in which case the report on the transaction shall
be made at the same time as the terms of the mortgage loan are
communicated, but no later than one month after the execution
of the order.
2. In addition to the requirements under paragraph 1, Member
States shall require investment firms to supply the client, on
request, with information about the status of his order.
3. Member States shall ensure that, in the case of orders for a
retail clients relating to units or shares in a collective investment
undertaking which are executed periodically, investment firms
either take the action specified in point (b) of paragraph 1 or
provide the retail client, at least once every six months, with the
information listed in paragraph 4 in respect of those transactions.
4. The notice referred to in point (b) of paragraph 1 shall
include such of the following information as is applicable and,
where relevant, in accordance with Table 1 of Annex I to
Regulation (EC) No 1287/2006:
(a) the reporting firm identification;
(b) the name or other designation of the client;
(c) the trading day;
(d) the trading time;
(e) the type of the order;
(f) the venue identification;
(g) the instrument identification;
(h) the buy/sell indicator;
(i) the nature of the order if other than buy/sell;
(j) the quantity;
(k) the unit price;
(l) the total consideration;
(m) a total sum of the commissions and expenses charged and,
where the retail client so requests, an itemised breakdown;
(n) the client's responsibilities in relation to the settlement of
the transaction, including the time limit for payment or
delivery as well as the appropriate account details where
these details and responsibilities have not previously been
notified to the client;
(o) if the client's counterparty was the investment firm itself or
any person in the investment firm's group or another client
of the investment firm, the fact that this was the case unless
the order was executed through a trading system that
facilitates anonymous trading.
For the purposes of point (k), where the order is executed in
tranches, the investment firm may supply the client with
information about the price of each tranche or the average price.
Where the average price is provided, the investment firm shall
supply the retail client with information about the price of each
tranche upon request.
5. The investment firm may provide the client with the
information referred to in paragraph 4 using standard codes if it
also provides an explanation of the codes used.
Comment
Applies to Article 19(8) of Directive 2004/39/EC