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

MIFIDPRU 4 Annex 12.1G
  1. (1)

    1This annex contains guidance on the interaction between the K-AUM requirement and the K-COH requirement in certain scenarios.

  2. (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 12.2G
  1. (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. (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.

  3. 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