Investment services and activities: Difference between revisions

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{{a|mifid2|{{subtable|'''ANNEX I: LISTS OF SERVICES AND ACTIVITIES AND FINANCIAL INSTRUMENTS'''<br>
'''SECTION A''': [[Investment services and activities]]
 
(1) Reception and transmission of orders in relation to one or more [[financial instruments]];
 
(2) Execution of orders on behalf of clients;
 
(3) [[Dealing on own account]];
 
(4) Portfolio management;
 
(5) Investment advice;
 
(6) Underwriting of [[financial instruments]] [[and/or]] placing of financial instruments on a firm commitment basis;
 
(7) Placing of financial instruments without a firm commitment basis;
 
(8) Operation of an MTF;
 
(9) Operation of an OTF.
 
'''SECTION B:''' [[Ancillary services]]
 
(1) [[Safekeeping]] and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management and excluding maintaining securities accounts at the top tier level;
 
(2) Granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction;
 
(3) Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings;
 
(4) Foreign exchange services where these are connected to the provision of investment services;
 
(5) Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments;
 
(6) Services related to underwriting.
 
(7) Investment services and activities as well as ancillary services of the type included under Section A or B of Annex 1 related to the underlying of the derivatives included under points (5), (6), (7) and (10) of Section C where these are connected to the provision of investment or ancillary services.
 
'''SECTION C''': [[Financial instruments]]
 
(1) [[Transferable securities]];
 
(2) [[Money-market instrument|Money-market instruments]];
 
(3) [[Units in collective investment undertakings]];
 
(4) [[Options]], [[futures]], [[swaps]], forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, [[emission allowances]] or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash;
 
(5) Options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;
 
(6) Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, a MTF, or an OTF, except for wholesale energy products traded on an OTF that must be physically settled;
 
(7) Options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in point 6 of this Section and not being for commercial purposes, which have the characteristics of other [[derivative]] [[financial instruments]];
 
(8) Derivative instruments for the transfer of credit risk;
 
(9) Financial [[Contracts for difference|contracts for differences]];
 
(10) Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, OTF, or an MTF;
 
(11) [[Emission allowances]] consisting of any units recognised for compliance with the requirements of Directive 2003/87/EC (Emissions Trading Scheme).}}}}Points to note:
{{commodity regulation}}

Latest revision as of 09:03, 16 June 2022

MiFID 2 Anatomy™

ANNEX I: LISTS OF SERVICES AND ACTIVITIES AND FINANCIAL INSTRUMENTS
SECTION A: Investment services and activities

(1) Reception and transmission of orders in relation to one or more financial instruments;

(2) Execution of orders on behalf of clients;

(3) Dealing on own account;

(4) Portfolio management;

(5) Investment advice;

(6) Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;

(7) Placing of financial instruments without a firm commitment basis;

(8) Operation of an MTF;

(9) Operation of an OTF.

SECTION B: Ancillary services

(1) Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management and excluding maintaining securities accounts at the top tier level;

(2) Granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction;

(3) Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings;

(4) Foreign exchange services where these are connected to the provision of investment services;

(5) Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments;

(6) Services related to underwriting.

(7) Investment services and activities as well as ancillary services of the type included under Section A or B of Annex 1 related to the underlying of the derivatives included under points (5), (6), (7) and (10) of Section C where these are connected to the provision of investment or ancillary services.

SECTION C: Financial instruments

(1) Transferable securities;

(2) Money-market instruments;

(3) Units in collective investment undertakings;

(4) Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, emission allowances or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash;

(5) Options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;

(6) Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, a MTF, or an OTF, except for wholesale energy products traded on an OTF that must be physically settled;

(7) Options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in point 6 of this Section and not being for commercial purposes, which have the characteristics of other derivative financial instruments;

(8) Derivative instruments for the transfer of credit risk;

(9) Financial contracts for differences;

(10) Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, OTF, or an MTF;

(11) Emission allowances consisting of any units recognised for compliance with the requirements of Directive 2003/87/EC (Emissions Trading Scheme).

MiFID 2: Less fondly known as EU Directive 2014/65/EU (EUR Lex) | MiFID 1Articles: 16(7) (Recording of Communications)
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Points to note: You must have a taste for multi-dimensional chess if you want to understand what is required in the world of commodities, freight, weather derivatives and emission allowances. To wit:

Section C of Annex I to MiFID includes the following emissions and commodity products as within the scope for financial instruments:

(4) options, futures, swaps, forwards and any other derivative contracts relating to securities, currencies, interest rates or yields, emission allowances or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash;

(5) options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;

(6) options, futures, swaps, forwards and any other derivative contracts relating to commodities that can be physically settled provided that they are traded on a regulated market, a MTF, or an OTF, except for wholesale energy products traded on an OTF that must be physically settled;

(7) options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in point 6 of this Section and not being for commercial purposes, which have the characteristics of other derivative financial instruments;


In scope

Out of... In scope

Really out of scope

  • Actual commodities, being consumable, perishable, paint ’em yellow ’n’ pass ’em off as copper, real-world things that people actually need to live, are out of scope.
  • Physically-settled commodity derivatives (not falling into the no-man’s land bucket above) are out of scope ...
... unless they are traded on an EU trading venue, (i.e, OTC physically-settled commodity derivatives) in which case they are in scope ...
... unless they are “wholesale energy products traded on an OTF that must be physically settled” — which case they are out of scope again. I DON’T MAKE THE RULES FOLKS.