On April 25, 2016, the European Commission adopted a Delegated Regulation supplementing the Markets in Financial Instruments Directive with regard to organizational requirements and operating conditions for investment firms. The adopted Delegated Regulation outlines specific organizational requirements for investment firms performing investment services and ancillary services. In particular, the adopted Delegated Regulation provides procedures for compliance, risk management, complaints handling, personal transactions, outsourcing and conflicts of interest as well as the additional organizational requirements for underwriting and placing services and the production and dissemination of investment research. The adopted Delegated Regulation outlines the operating conditions for investment firms. It also specifies the rules which an investment firm must comply when providing services or ancillary services to clients. For example, it requires information to be provided to clients and potential clients on the costs and charges associated with investment services and financial instruments. The adopted Delegated Regulation further specifies that information, which is to include an explanation of the risks arising from the insolvency of the issuer and related events, such as a bail in, must also be provided.

The adopted Delegated Regulation also specifies operating obligations for trading venues, including the circumstances where a removal or suspension of a financial instrument from trading would cause significant damage to investors’ interests and the conditions for position reporting of commodity derivatives, in particular, when an aggregate commitment of traders report shall be published on a specific commodity derivative, emission allowance or derivative.

The adopted Delegated Regulation provides guidance on data provision obligations for reporting service providers. The transparency framework under MiFID II, reporting services providers are required to provide market data on a reasonable commercial basis. The final chapter provides guidance for regulators when determining whether the operations of a multilateral trading facility or organized trading facility are of substantial importance to a host member state, specifying the consequences of that status, to reduce the likelihood of a trading venue being subject to regulation by more than one regulator where otherwise there would be no such obligation. The adopted Delegation is subject to approval by the European Parliament and the Council of the European Union.

The Delegated Regulation is available at: https://ec.europa.eu/transparency/regdoc/rep/3/2016/EN/3-2016-2398-EN-F1- 1.PDF.