Related provisions for LR 15.5.3
1Paragraph 7BA – Position management |
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(1) |
A [UK RIE] operating a trading venue which trades commodity derivatives must apply position management controls on that venue, which must at least enable the [UK RIE] to - |
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(a) |
monitor the open interest positions of persons; |
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(b) |
access information, including all relevant documentation, from persons about- |
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(i) |
the size and purpose of a position or exposure entered into; |
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(ii) |
any beneficial or underlying owners; |
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(iii) |
any concert arrangements; and |
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(iv) |
any related assets or liabilities in the underlying market; |
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(c) |
require a person to terminate or reduce a position on a temporary or permanent basis as the specific case may require and to unilaterally take appropriate action to ensure the termination or reduction if the person does not comply; and |
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(d) |
where appropriate, require a person to provide liquidity back into the market at an agreed price and volume on a temporary basis with the express intent of mitigating the effects of a large or dominant position. |
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(2) |
The position management controls must take account of the nature and composition of market participants and of the use they make of the contracts submitted to trading and must- |
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(a) |
be transparent; |
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(b) |
be non-discriminatory; and |
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(c) |
specify how they apply to persons. |
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(3) |
A [UK RIE] must inform the FCA of the details of the position management controls in relation to each trading venue it operates. |
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Paragraph 7BB – Position reporting |
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(1) |
This paragraph applies to a [UK RIE] operating a trading venue which trades commodity derivatives, emission allowances, or emission allowance derivatives. |
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(2) |
The [UK RIE] must - |
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(a) |
where it meets the minimum threshold, as specified in article 83 (position reporting) of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive2, make public a weekly report with the aggregate positions held by the different categories of persons for the different commodity derivatives, emission allowances, or emission allowance derivatives traded on the trading venue specifying - |
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(i) |
the number of long and short positions by such categories; |
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(ii) |
changes of those positions since the previous report; |
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(iii) |
the percentage of the total open interest represented by each category; and |
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(iv) |
the number of persons holding a position in each category; and |
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(b) |
provide the FCA with a complete breakdown of the positions held by all persons, including the members and participants and their clients, on the trading venue on a daily basis, or more frequently if that is required by the FCA. |
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(3) |
For the weekly report mentioned in sub-paragraph (2)(a) the [UK RIE] must - |
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(a) |
categorise persons in accordance with the classifications required under sub-paragraph (4); and |
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(b) |
differentiate between positions identified as- |
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(i) |
positions which in an objectively measurable way reduce risks directly relating to commercial activities; or |
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(ii) |
other positions. |
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(4) |
The [UK RIE] must classify persons holding positions in commodity derivatives, emission allowances, or emission allowance derivatives according to the nature of their main business, taking account of any applicable authorisation or registration, as - |
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(a) |
an investment firm or qualifying2 credit institution; |
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(b) |
an investment fund, either as an undertaking for collective investment in transferrable securities within the meaning of section 236A of the Act, an AIF or an AIFM within the meaning of regulations 3 and 4 respectively of the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773)2; |
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(c) |
another financial institution, including an insurance undertaking within the meaning of section 417 of the Act, a reinsurance undertaking within the meaning of section 417 of the Act, and an occupational pension scheme within the meaning of section 1(1) of the Pension Schemes Act 1993;2 |
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(d) |
a commercial undertaking; or |
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(e) |
in the case of emission allowances, or emission allowance derivatives, an operator with compliance obligations under Directive 2003/87/EC of the European Parliament and the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community. |
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[Note: 1993 c.48. Section 1 was amended by section 239 of the Pension Schemes Act 2004 (c. 35) and S.I. 2007/3014.]2 |
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(5) |
The [UK RIE] must communicate the weekly report mentioned in sub-paragraph (2)(a) to the FCA2. |
1Activity |
Products/Sectors |
Is there an appropriate qualification4requirement? 4 |
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Designated investment business carried on for a retail client |
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Providing basic advice |
1. |
Stakeholder products excluding a deposit-based stakeholder product |
No |
Advising or giving personal recommendations (as relevant)13 |
2. |
Giving personal recommendations on securities13 which are not stakeholder pension schemes, personal pension schemes7 or broker funds |
Yes |
3. |
Giving personal recommendations on derivatives13 |
Yes2 |
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4. |
Giving personal recommendations on retail investment products13 which are not broker funds 66 |
Yes2 |
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5. |
Giving personal recommendations on13Friendly Societylife policies where the employee is not reasonably expected to receive a remuneration of greater than £1000 a year in respect of such sales |
No2 |
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6. |
Giving personal recommendations on13Friendly Society tax-exempt policies (other than Holloway sickness policies where the Holloway policy special application conditions are met)5 |
Yes2 |
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7. |
Giving personal recommendations on long-term care insurance contracts13 |
Yes2 |
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8. |
Giving personal recommendations on investments13 in the course of corporate finance business |
Yes2 |
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9. |
Yes2 |
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129A. |
Yes |
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Undertaking the activity in column 2 |
10. |
Yes |
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11. |
Yes2 |
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Giving personal recommendations13 and dealing |
12. |
Giving personal recommendations on and dealing in securities13 which are not stakeholder pension schemes, personal pension schemes7 or broker funds |
Yes |
13. |
Giving personal recommendations on and dealing in derivatives13 |
Yes2 |
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4Dealing |
13A.8 |
Securities which are not stakeholder pension schemes, personal pension schemes7 or broker funds |
No |
No |
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8 | [deleted]14 |
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Managing |
14. |
Yes |
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Overseeing on a day-to-day basis |
15. |
Operating a collective investment scheme or undertaking the activities of a trustee or depositary of a collective investment scheme |
Yes |
16. |
Safeguarding and administering investments or holding client money |
Yes2 |
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17. |
Administrative functions in relation to managing investments |
Yes2 |
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18. |
Administrative functions in relation to effecting or carrying out contracts of insurance which are life policies |
Yes2 |
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19. |
Administrative functions in relation to the operation of stakeholder pension schemes |
Yes2 |
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Mortgage Activity10 and reversion activity carried on for a customer 10 |
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910Advising; arranging (bringing about) an execution-only sale, excluding variations to an existing home finance transaction except where the effect is to change all or part of the home finance transaction from one interest rate to another. See Note 3, which for the avoidance of doubt forms part of this rule. |
20 |
Regulated mortgage contracts for a non-business purpose |
Yes |
20A |
Regulated mortgage contracts for a business purpose |
No |
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21 |
Yes |
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9Designing scripted questions for execution-only sales |
21A |
Regulated mortgage contracts for a non-business purpose |
Yes |
21B |
Regulated mortgage contracts for a business purpose |
No |
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22 |
Yes |
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Overseeing execution-only sales on a day-to-day basis9 9 |
23. |
Yes |
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11MCD credit agreement activities carried on for consumers |
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11manufacturing |
23A |
No |
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11entering into a regulated mortgage contract or entering into a regulated credit agreement as lender |
23B |
No |
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11arranging (bringing about) regulated mortgage contracts or acting as an MCD credit broker |
23C |
No |
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11advising on a regulated mortgage contract or advising on a regulated credit agreement for the acquisition of land |
23D |
No |
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11directly managing or supervising employees who carry on any of the MCD credit agreement activities 23A to 23D |
23E |
No |
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Non-investment insurance business carried on for a consumer |
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Giving personal recommendations13 |
24. |
Giving personal recommendations on non-investment insurance contracts13 |
No |
3Regulated sale and rent back activity carried on for a customer |
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Advising |
25. |
No |
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Overseeing an execution-only sale10 on a day-to-day basis 10 |
26. |
No |
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Notes: |
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1. |
In the Appendix the heading and types of business specified in the headings are to be read in conjunction with the paragraphs appearing beneath them. |
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2. |
Thus, for example, paragraph 24,13 consistent with the heading above it, refers only to personal recommendations given in relation to13non-investment insurance contracts given to a consumer.10 33 |
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122A. |
In relation to activity number 9A, see TC 2.1.5HR and TC 2.1.6R(2). There is no qualification for this activity in the list of qualifications set out in TC Appendix 4E. However, the effect of TC 2.1.5HR is that an employeeadvising on P2P agreements must be qualified to the same standard as if that employee were providing investment advice to retail clients on retail investment products. |
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103. |
For the purpose of product numbers 20, 20A and 21 the activity of arranging (bringing about) referred to in the activity column: (a) includes activity which would be arranging (bringing about) but for the exclusion in article 28A of the Regulated Activities Order; and (b) does not include activities which taken on their own would not fall within the definition of that activity. For these purposes no account should be taken of the fact that for an activity to be a regulated activity it must be carried on by way of business (see PERG 4.3). |
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4. |
In this Appendix, paragraphs 23A, 23B, 23C, 23D and 23E relate to the implementation of article 9(1) of the MCD. The specified activities do not, in and of themselves, attract a qualification requirement. However, where those activities overlap with those specified under the heading "mortgage activity and reversion activity carried on for a customer", qualification requirements may apply. |
Table 1: CRD activities6 6 |
Part II RAO Activities |
Part III RAO Investments |
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1. |
Taking6 deposits and other repayable funds from the public 6 |
Article 5 |
Article 74 |
2. |
Lending |
Article 61, 64 |
Article 88 |
3. |
Financial leasing |
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4. |
Money transmission services |
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5. |
Issuing and administering means of payment (eg credit cards, travellers' cheques and bankers' drafts) |
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6. |
Guarantees and commitments |
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7. |
Trading for own account or for account of customers in: (a) money market instruments (b) foreign exchange (c) financial futures and options (d) exchange and interest rate instruments (e) transferable securities |
Article 14, 21, 25 (see Note 1), 64 Article 14, 21, 25, 64 Article 14, 21, 25, 64 Article 14, 21, 25, 64 Article 14, 21, 25, 64 |
Article 77, 78, 80, 83-85, 89 Article 83-85, 89 Article 83-85, 89 Article 83-85, 89 Article 76-81, 89 |
8. |
Participation in share issues and the provision of services relating to such issues |
Article 14, 21, 25, 53(1)10, 64 |
Article 76-81, 89 |
9. |
Advice to undertakings on capital structure, industrial strategy and related questions and advice and services relating to mergers and the purchase of undertakings |
Article 14, 21, 25, 53(1)10, 64 |
Article 76-80, 83-85, 89 |
10. |
Money broking |
Article 25, 64 |
Article 77, 78, 89 |
11. |
Portfolio management and advice |
Article 14, 21, 25, 37, 53(1)10, 64 |
Article 76-81, 83-85, 89 |
12. |
Safekeeping and administration of securities |
Article 40, 45, 64 |
Article 76-81, 83-85, 89 |
13. |
Credit reference services |
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14. |
Safe custody services |
1 | 16 | 1
615. |
Issuing electric money |
Article 9B |
Article 74A |
3Note 12: The services and activities provided for in Sections A and B of Annex I of MiFID when referring to the financial instruments provided for in Section C of Annex I of that Directive are subject to mutual recognition according to the CRD from 1 January 2013.6See2 the table at SUP App 3.9.5 G below for mapping of MiFIDinvestment services and activities.For further details relating to this residual category, please see the "CRD"6section of the passporting forms entitled "Notification of intention to establish a branch in another EEA State" and "Notification of intention to provide cross border services in another EEA State".2 266 |