The revised Markets in Financial Instruments Directive (MiFID II) imposes a new regulatory and compliance regime on providers of direct electronic access (DEA) to European trading venues. In particular, the relevant regulatory technical standards (RTS) require investment firms acting as DEA providers to undertake a due diligence review of their DEA clients to ensure that such clients comply with the provisions of the RTS and the rules of the relevant European trading venue. On September 8, the Futures Industry Association’s European E-Trading Committee published a template due diligence questionnaire (Template) to facilitate the reviews that must be undertaken by DEA providers.
The Template requires a DEA client to provide identifying information about itself, such as its name and legal entity identifier, as well as more descriptive information such as the DEA client’s governance, financial and technology arrangements. The Template is also designed to ensure that DEA providers are able to identify where a given DEA client is itself “sub-delegating” DEA to one of its own clients. Completion of the Template is not mandated by law, nor is the order or content of the questions set out in the Template; however the associations believe that generating a reasonably standardized set of questions will facilitate the ability of DEA providers to comply with their obligations under the RTS.
The Template was prepared in cooperation with the Association for Financial Markets in Europe, the Alternative Investment Management Association and the Managed Funds Association. The Template is available here.