Guidelines For Individual Investment Services Regulatory Financial Instruments Market Law, The Application Of The Rules

Original Language Title: Vadlīnijas par atsevišķu ieguldījumu pakalpojumu sniegšanu regulējošo Finanšu instrumentu tirgus likuma normu piemērošanu

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Financial and capital market Commission guidelines no 59 in 2015 on 14 April (financial and capital market Commission minutes no. 15 padomessēd 2 p.) Guidelines for individual investment services regulatory financial instruments market law rules issued in accordance with the financial and capital market Commission of law article 6, paragraph 2, and article 7, first paragraph, point 1 1. General questions 1. "guidelines for individual investment services regulatory financial instruments market law rules" contain financial and capital market Commission on investment services legislation of the individual interpretation of the rules. The Commission shall issue guidelines to facilitate this, all market participants a common understanding of the law and the protection of investors. 2. the terms used in the guidelines: 2.1 Commission-financial and capital market Commission; 2.2. the authority – investment services provider; 2.3. The law-financial instruments market law; 2.4. rules – Commission Regulation No 153 09.11.2007. ' ' the legislative provisions on information the investment service provided to the customer in the course of investment services, financial instruments, the cost of the service and transactions ' '; 2.5. General use of the term complies with the law for the use of the term. 2. Guidelines for guidelines 1 (fifth subparagraph of article 124.1 application) authority does not invite the customer to submit an application for change of status. Client request change of status are presented as a separate application, and it is not included in the financial instruments account opening package. Good practice examples (A). the authority shall provide customer information, indicating that the client, if it considers itself competent in matters of investment, may be asked to change the assigned private client status against the professional status of the client. The authority shall provide the information objectively, stating, what matters is the meaning, status change, and when it is reasonable. B. Authority discuss individually with each customer who expressed interest in changing the status, nature of this process and make sure that the customer's competence. Authority record these interviews and retain such records as long as is kept in the relevant investment services contract with this client. Bad practices (C). the application of a financial instrument account opening to serve at the same time as the application to change the status of the client, which can contribute to the fact that the authority granted in the massive Professional client status to private customers. D. the authority formally treats the client's competency assessment (chevrons tagging), not observing the principle that the status change of the status of professional clients require an individual approach to the client's evaluation. 2. in the guidelines (article 124.1 of the Act and the sixth subparagraph of article 126.2 fifth application) authority, assessing the customer's expertise, experience and knowledge of the law in accordance with article 124.1 of the sixth part, it can be considered that the client understands a specific financial instrument, product or transaction-related risks, if the customer has knowledge and experience in transactions with such financial instruments, products or types of transactions or with them essentially equivalent financial instruments , products or transactions. When the body forms a product group, it followed the breakdown of financial instruments and complex financial instruments in European securities markets regulators Committee (Committee of European Securities Regulators since 01.01.2011. The European Securities and markets authority (European Securities and markets Authority) published the consultative document) "Consultation paper-MiFID complex and non-complex financial instruments for the purpose of the directive's requirements by the appropriatenes (Ref. CESR/09-295) ", a group including the complexity of similar financial instruments, products or types of transactions. Good practice examples a. Authority asks for the customer's expertise (experience and knowledge) of the financial instrument, product and business diversity and the contribution of the authorities of the nature of the service, such as distributing the following groups: (a) a depositary certificates) shares, which are traded on a regulated market, the units of investment funds (UCITS); b) shares, depositary certificates, which are not admitted to trading on a regulated market, alternative investment funds (AIF) units; (c)) the conventional bonds, notes, etc. simply debt instruments; (d)) usable, exchangeable bonds, bonds with sales (pets) and purchase (call), debt securities with embedded derivatives; e) exchange traded future contracts (Futures), financial contracts for difference (CFD); f) interest rate swaps (interest rate swaps), shares and other financial asset swaps (equity swap, etc.); the structured deposits with g) risk premium; h) currency futures and swap contracts (FX forwards, FX swaps); I) options (options), stock and bond short selling (uncovered positions); j) repo and reverse repo transactions, if the financial instrument is purchased on the transaction invoice financing, shares or other financial instruments for margin trading. Bad practices (B). the authority asking about the client's knowledge and experience, without regard to financial instruments, products and business diversity, for example, are asked without relation to the type of product or used too simplistic distribution of products such as shares, bonds, derivative financial instruments ". 3. in the guidelines (article 124.1 of the Act the fifth part 2 of the application) the authority, in determining whether a transaction is essential to take into account the following minimum essential level of transactions for different groups of financial instruments: 1. shares and investment funds – 50 000 euros per transaction; 2. State and corporate bonds – 200 000 euro per transaction; 3. derivative contracts the notional value of the contract is at least 1 000 000 euro per transaction. * Or the equivalent in another currency. The authority may use other thresholds, if it can be substantiated with specific factual information. Good practice examples (A) to assess the compliance of the customer. the rule of the fifth subparagraph of article 124.1 (1), the authority asked customers to specify the particulars of the transactions (including and) period and the types of financial instruments with which those transactions are carried out. B. evaluate the client's transaction authority about, comparing them with the market concerned about the normal transactions between professional players. Bad practices C. client questionnaire, the question is worded so that the client himself decides whether it carried out subjectively in deal size may be regarded as an important market in question, such as "are you in the last 12 months you have made at least 10 significant amount of transactions". D. ask about deals, questions and answers are not linked to a specific financial instrument, product or transaction. 4. in the guidelines (article 124.1 of the Act in paragraph 3 of part 5 of application) on the financial sector and take the position that requires knowledge of the transactions and services, in accordance with article 124.1 of the Act's fifth paragraph 3 can be considered to be such posts where is licensed and supervised financial market participant: a) financial market analyst (main responsibilities: financial instruments, market analysis, investment research development); b) broker, dealer, trader (main responsibilities: transactions with financial instruments and carrying clients, investment advice to clients); c) portfolio or investment fund manager, investment strategist (main responsibilities: investment strategy development and execution, managing authorities, customers, the Investment Fund's financial instruments portfolio, decision on transactions with financial instruments, transactions with financial instruments); d) investment consultant (main responsibilities: personal recommendations on the transactions with financial instruments); (e)) the provision of investment services for the surveillance expert (main responsibilities: the investment services sector); (f) other post), within which the substantive obligations to comply with the above posts within tasks. Good practice examples (A) to assess the compliance of the customer. the law article 124.1 of the fifth paragraph of part 3, the authority asked customers to provide details of the job position, job positions within the principal obligations of the authority and the period during which the person concerned was in Office. If you can't clearly conclude that the post is equivalent to named body, find out what were the duties of the person. Bad practices (B). client questionnaire, the question of the post in the financial sector has been defined so that the party itself decide whether they conceived the article 124.1 of the Act meets the fifth paragraph 3, such as, "have you taken his post in the financial sector". 5. in the guidelines (article 124.1 of the Act, the application of the sixth part) If a private customer looking to get professional customer's status with respect to any investment services, the types of transactions, financial instruments and products in General, the authority of article 124.1 of the Act scored the sixth part requirements for authority in General, available products, financial instruments or types of transactions, in the light of the diversity and the different level of complexity. The authority cannot provide customer service as a Professional client in relation to a financial instrument or product if this financial instrument or product is not considered suitable for the customer. Good practice examples (A). the authority shall refuse to grant private client Professional client status for all products, for example, if the customer does not have the experience or other authorities of repo transactions offered. Bad practices b. private client please assign Professional client status for all products. The authority shall assess the competence of customer client so far conducted transactions with shares and bonds, but does not evaluate the client's competence with regard to financial derivatives. 6. in the guidelines (article 124.1 of the Act in paragraph 1 the fifth part of the application) the authority may assess that the law is complied with article 124.1 fifth criteria referred to in paragraph 1-10 essential transactions about quarter past four quarters — regardless of whether these transactions are made with the same type or different types of financial instruments. A supportive guide assessing the customer transactions, the statistics authority takes into account only those transactions for which decisions are adopted by the client, but not taken into account for the transactions made to the customer's individual portfolio management, because they have accepted the decision of the institution, not the client. Good practice examples (A). the authority shall refuse to grant private customer customer's professional status, if the decisions on the right of the customer transactions are not accepted by the client independently. Bad practices b. private client please assign Professional client status. So far, the client has used the only portfolio management services, within which the decisions on transactions has adopted the relevant authorities authorized by the employee. Authority customer compliance with criterion of transactions valued at portfolio management service transactions. 7. guidelines (article 128 of the Act of the eighth part, the application of the provisions of paragraph 28) 1. the authority shall forward to the customer, who is a Professional client, notice of the order shall promptly, but not later than the end of the following working day, on the other hand, if the approval authority receives from third parties, then no later than the next working day after receiving confirmation from the third party. That communication shall specify at least the following information: a) Authority identificējošo data; b) customer identificējošo data; (c) the date and time of the trade); (d) the type of order) (restrictive order, order transaction at market price); (e) the designation of the place of execution); f) financial instrument identification data; (g)), whether the order is a purchase or sales order; (h) financial instruments); I) average unit price; (j) the total amount of the transactions); k) with business related fees and other charges imposed total amount; l) customer responsibilities for the settlement of the transaction; m) the approval, if the client's counterparty was the body itself or any other company within the group, the authority or other authorities. This requirement does not apply to the case where the order is executed through a trading system that provides anonymous trade. 2. the authority may specify in the notice what these guidelines in paragraph 1, "a"-"l" referred to in the information, if all the conditions listed below: a) the authority is clearly revealed this information prior to the acceptance of customer's order; (b) before making an order the customer) have announced the total fee or criteria; (c)), at the request of the customer discovers the client transaction price inclusive Commission fee and its components; (d)) the authority has informed the Commission that it act in accordance with these guidelines the provisions of paragraph 2. Supportive of the guidelines the Commission fee for the execution of the order shall include all amounts that the authority be withheld as a fee for the service, such amounts as additional Commission (mark-up), third-party expenses (such as regulators, payment fee exchange fee for settlement or similar charges), authorities charge, in accordance with a basic tariff. Good practice examples (A). the authority shall provide to the customer the information about the customer's order that includes the specified in the guidelines. B. authority as order execution price indicates price for which the order is fulfilled in real marketplace. Bad practices c. body masks part of commissions, including the deal price. D. the added benefit (mark-up, mark-down) is not indicated in the authorities charged the fee amount. E. authority as a possible order execution price (before the customer orders) indicate a price which differs from the authorities or the trade of a counteragent site available transaction price, to deduct from the client an additional benefit. Financial and capital market Commission Vice Chairman p. Bird

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