MIFIDPRU 4 Annex 12G Guidance on the interaction between K-AUM and K-COH

MIFIDPRU 4 Annex 12.1G01/12/2021

(1)
1This annex contains guidance on the interaction between the K-AUM requirement and the K-COH requirement in certain scenarios.
(2)
The scenarios contained in this annex are not intended to be exhaustive. MIFIDPRU investment firms should analyse any arrangement that is not covered by the guidance in this annex by reference to the rules and guidance in MIFIDPRU 4.7 (in relation to the K-AUM requirement) and MIFIDPRU 4.10 (in relation to the K-COH requirement). Firms should also refer to the guidance in MIFIDPRU 4.6.2G.

MIFIDPRU 4 Annex 12.2G01/12/2021

(1)
1The following table indicates whether a MIFIDPRU investment firm is required to calculate a K-AUM requirement or a K-COH requirement in a particular scenario.
(2)
In the table, a reference to:
1. (a)
  “DPM” is to the activity of discretionary portfolio management;
2. (b)
  “IF1” is to the first MIFIDPRU investment firm;
3. (c)
  “IF2” is to the second MIFIDPRU investment firm;
4. (d)
  “IF3” is to the third MIFIDPRU investment firm;
5. (e)
  a dash (-) indicates that there is no second MIFIDPRU investment firm involved in the relevant scenario;
6. (f)
  “Yes” means that the relevant requirement applies to that activity; and
7. (g)
  “No” means that the relevant requirement does not apply to that activity.

	IF1	IF1 K-AUM	IF1 K-COH	IF2	IF2 K-AUM	IF2 K-COH
1	DPM, executes the resulting orders	Yes	No	-	-	-
2	DPM, delegates DPM to IF2	Yes	No	Undertakes delegated DPM and executes the resulting orders	No	Yes
3	DPM, delegates DPM to IF2. Receives orders back from IF2 to execute	Yes	No	Undertakes delegated DPM and passes orders back to IF1 to execute	No	No
4	DPM, delegates DPM to IF2	Yes	No	Undertakes delegated DPM and passes orders back to IF3 to execute No No	No	No
5	DPM, delegates DPM to IF2. Receives orders back from IF2 and passes them to IF3 to execute	Yes	No	Undertakes delegated DPM and passes orders back to IF1	No	No
6	DPM, passes orders to IF2 for execution	Yes	No	Executes orders on behalf of IF1	No	Yes
7	DPM, receives ongoing advice from IF2	Yes	No	Gives ongoing advice on assets managed by IF1	Yes	No
8	Provides ongoing investment advice in relation to assets and executes resulting orders	Yes	No	-	-	-
9	Provides ongoing investment advice in relation to assets, with orders executed by IF2	Yes	No	Executes orders received from IF1 for execution	No	Yes
10	Provides “one-off” investment advice to a client. Any orders are passed to IF2 for execution	No	Yes	Executes orders received from IF1 for execution	No	Yes
11	Provides “one-off” investment advice to a client. Executes any resulting orders	No	Yes	-	-	-
12	Execution only of client orders	No	Yes	-	-	-
13	Client orders received are passed to IF2 for execution	No	Yes	Executes orders received from IF1 for execution	No	Yes

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