Client consent to execution policy and execution of orders outside a regulated market or MTF - COBS Provision: Difference between revisions

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From {{tag|CESR}}'s "[[Media:CESR Best Execution QA 07_320.pdf|Best Execution under MiFID]]" Questions and Answers document of May 2007 (CESR/07-320):

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From the "[[Media:CESR Best Execution QA 07_320.pdf|Best Execution under MiFID]]" Q&A document:

21.1 Where {{tag|MiFID}} requires "prior express consent", CESR considers that this entails '''an actual demonstration of consent by the client which may be provided by signature in writing or an equivalent means''' (electronic signature), by a click on a web page or orally by telephone or in person, with appropriate record keeping in each case. <br>}}

While at first blush it reads as though {{cobsprov|11.2.26}} should apply to all orders, even those which cannot be traded on a [[regulated market]] in any circumstances (otc swaps for example), the confines of common sense and logic have not entirely escaped the {{tag|European Commission}}. In its "[http://ec.europa.eu/yqol/index.cfm?fuseaction=legislation.showIssue&issueId=69&browse=true&questionId=173 Questions on Single Market Legislation]" resource, it notes:

{{quote|21.2 CESR considers that on a purposive reading of the "express consent" requirement, an investment firm does not have to obtain express consent from its clients where the relevant instruments are not admitted to trading on a regulated market or MTF.}}

In order to comply with this rule, the safest course is to ask clients for a generic permission to execute trades off {{fcaprov|regulated markets}} or {{fcaprov|MTFs}} across the board. Some clients might object, however, to such a wide-ranging permission.