Delegated Regulation (MiFID II) organizational requirements and conditions for the performance of investment companies' activities 2021/1254

Commission Delegated Regulation (EU) 2021/1254 (MIFID II) Markets in Financial Instruments Directive II of 21 April 2021 amending Delegated Regulation (EU) 2017/565 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organizational requirements and performance conditions activities of investment companies, as well as defined terms for the purposes of the aforementioned directive (Text with meaning for the EEA).

This regulation enters into force on the twentieth day after its publication in the Official Journal of the European Union.

Publication date

2. 8. 2021

This Regulation essentially amends the previous Commission Delegated Regulation (EU) 2017/565, which supplemented Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments. The correction mainly concerns the organizational requirements and conditions for the performance of the activities of investment companies.

The reason for the correction was several errors in the original text:

• Incorrect references to articles under Delegated Regulation (EU) 2017/565.
• Errors in the cross-references in Annex I to this Regulation, specifically in the sections relating to client assessment, processing of instructions, client instructions and transactions, client reporting, client communication and organizational requirements.

The most important change is the replacement of the entire Annex I with new text. This attachment contains minimal list of records, which investment companies must conduct depending on the nature of their activities.

For better clarity, the list in the appendix is structured in a table with the following columns:

• Nature of duty: Describes the field of activity to which the record relates.
• Record Type: Specifies the type of document or information to be recorded.
• Summary of Contents: A brief summary of the information that the record should contain.
• Reference to legislation: It lists the relevant articles of directives and regulations that impose the obligation to keep a given type of record.

Examples of the types of records investment companies must keep include:

• Information for clients
• Contracts with clients
• Records on assessment of suitability and appropriateness of investments
• Records of the processing of client instructions
• Records of client instructions and transactions
• Reports on compliance with regulations
• Conflict of interest records
• Complaint handling records

The Regulation entered into force on the 20th day after its publication in the Official Journal of the European Union.