Requirement (MIFID)
Article 12 Personal transactions
Requirements MIFID - DIRECTIVE 2006/73/EC
Description
Description
1. Member States shall require investment firms to establish,
implement and maintain adequate arrangements aimed at
preventing the following activities in the case of any relevant
person who is involved in activities that may give rise to a
conflict of interest, or who has access to inside information
within the meaning of Article 1(1) of Directive 2003/6/EC or to
other confidential information relating to clients or transactions
with or for clients by virtue of an activity carried out by him on
behalf of the firm:
(a) entering into a personal transaction which meets at least
one of the following criteria:
(i) that person is prohibited from entering into it under
Directive 2003/6/EC;
(ii) it involves the misuse or improper disclosure of that
confidential information;
(iii) it conflicts or is likely to conflict with an obligation of
the investment firm under Directive 2004/39/EC;
(b) advising or procuring, other than in the proper course of
his employment or contract for services, any other person
to enter into a transaction in financial instruments which, if
a personal transaction of the relevant person, would be
covered by point (a) or Article 25(2)(a) or (b) or
Article 47(3);
(c) without prejudice to Article 3(a) of Directive 2003/6/EC,
disclosing, other than in the normal course of his
employment or contract for services, any information or
opinion to any other person if the relevant person knows,
or reasonably ought to know, that as a result of that
disclosure that other person will or would be likely to take
either of the following steps:
(i) to enter into a transaction in financial instruments
which, if a personal transaction of the relevant person,
would be covered by point (a) or Article 25(2)(a) or (b)
or Article 47(3);
(ii) to advise or procure another person to enter into such
a transaction.
2. The arrangements required under paragraph 1 must in
particular be designed to ensure that:
(a) each relevant person covered by paragraph 1 is aware of the
restrictions on personal transactions, and of the measures
established by the investment firm in connection with
personal transactions and disclosure, in accordance with
paragraph 1;
(b) the firm is informed promptly of any personal transaction
entered into by a relevant person, either by notification of
that transaction or by other procedures enabling the firm to
identify such transactions;
In the case of outsourcing arrangements the investment
firm must ensure that the firm to which the activity is
outsourced maintains a record of personal transactions
entered into by any relevant person and provides that
information to the investment firm promptly on request.
(c) a record is kept of the personal transaction notified to the
firm or identified by it, including any authorisation or
prohibition in connection with such a transaction.
3. Paragraphs 1 and 2 shall not apply to the following kinds of
personal transaction:
(a) personal transactions effected under a discretionary
portfolio management service where there is no prior
communication in connection with the transaction
between the portfolio manager and the relevant person or
other person for whose account the transaction is executed;
(b) personal transactions in units in collective undertakings
that comply with the conditions necessary to enjoy the
rights conferred by Directive 85/611/EEC or are subject to
supervision under the law of a Member State which requires
an equivalent level of risk spreading in their assets, where
the relevant person and any other person for whose
account the transactions are effected are not involved in the
management of that...
Comment
Applies to Article 13(2) of Directive 2004/39/EC