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Client consent to execution policy and execution of orders outside a regulated market or MTF - COBS Provision: Difference between revisions
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Client consent to execution policy and execution of orders outside a regulated market or MTF - COBS Provision (view source)
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===Commentary=== | ===Commentary=== | ||
====Instruments that are not admitted to trading on a Regulated Market or MTF==== | |||
While {{cobsprov|11.2.26}} seems to apply to all orders, even those which cannot be traded on a [[regulated market]] in any circumstances, 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|However, 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]].}} | |||
From the CESR "[http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB4QFjAA&url=http%3A%2F%2Fwww.esma.europa.eu%2Fsystem%2Ffiles%2F07_320.pdf&ei=2vb1U-q2FKjmyQOEi4KQBg&usg=AFQjCNFc-U4kGgJ5xTP_JA0wMBneaHUF-w&sig2=TnOHrS2bIjiEIrG_HubFxw&bvm=bv.73231344,d.bGQ Best Execution under MiFID" Questions and Answers document of May 2007] (CESR/07-320): | From the CESR "[http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB4QFjAA&url=http%3A%2F%2Fwww.esma.europa.eu%2Fsystem%2Ffiles%2F07_320.pdf&ei=2vb1U-q2FKjmyQOEi4KQBg&usg=AFQjCNFc-U4kGgJ5xTP_JA0wMBneaHUF-w&sig2=TnOHrS2bIjiEIrG_HubFxw&bvm=bv.73231344,d.bGQ Best Execution under MiFID" Questions and Answers document of May 2007] (CESR/07-320): | ||
'''''Q20 How do clients consent to the execution policy?''''' <br> | {{quote|'''''Q20 How do clients consent to the execution policy?''''' <br> | ||
20.1 An investment firm that executes orders or decisions to deal should obtain the prior consent of its clients to its execution policy. CESR observes that for consent to be valid, the legal provisions of the relevant Member State relating to the giving of consent must be satisfied, without prejudice to what is said in Q14 through Q16 about the information that the firm should provide to clients. <br> | 20.1 An investment firm that executes orders or decisions to deal should obtain the prior consent of its clients to its execution policy. CESR observes that for consent to be valid, the legal provisions of the relevant Member State relating to the giving of consent must be satisfied, without prejudice to what is said in Q14 through Q16 about the information that the firm should provide to clients. <br> | ||
20.2 '''A firm should obtain the prior express consent of its clients before executing their orders outside a regulated market or MTF'''. <br> | 20.2 '''A firm should obtain the prior express consent of its clients before executing their orders outside a regulated market or MTF'''. <br> | ||
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'''''Q21 What is the difference between "consent" and "express consent"?'''''<br> | '''''Q21 What is the difference between "consent" and "express consent"?'''''<br> | ||
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> | 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> | ||
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. | 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.}} | ||
{{cobsanatomy}} | {{cobsanatomy}} | ||