(Second subparagraph of Article 25(3) of Directive 2004/39/EC)
1. The most relevant market in terms of liquidity for a financial instrument which is admitted to trading on a regulated market, hereinafter ‘the most relevant market’, shall be determined in accordance with paragraphs 2 to 8.
2. In the case of a share or other transferable security covered by Article 4(1)(18)(a) of Directive 2004/39/EC or of a unit in a collective investment undertaking, the most relevant market shall be the Member State where the share or the unit was first admitted to trading on a regulated market.
3. In the case of a bond or other transferable security covered by Article 4(1)(18)(b) of Directive 2004/39/EC or of a money market instrument which, in either case, is issued by a subsidiary, within the meaning of Seventh Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts ( 5 ) , of an entity which has its registered office in a Member State, the most relevant market shall be the Member State where the registered office of the parent entity is situated.
4. In the case of a bond or other transferable security covered by Article 4(1)(18)(b) of Directive 2004/39/EC or of a money market instrument which, in either case, is issued by a Community issuer and which is not covered by paragraph 3 of this Article, the most relevant market shall be the Member State where the registered office of the issuer is situated.
5. In the case of a bond or other transferable security covered by Article 4(1)(18)(b) of Directive 2004/39/EC or a money market instrument which, in either case, is issued by a third country issuer and which is not covered by paragraph 3 of this Article, the most relevant market shall be the Member State where that security was first admitted to trading on a regulated market.
6. In the case of a derivative contract or a financial contract for differences or a transferable security covered by Article 4(1)(18)(c) of Directive 2004/39/EC, the most relevant market shall be:
(a)
where the underlying security is a share or other transferable security covered by Article 4(1)(18)(a) of Directive 2004/39/EC which is admitted to trading on a regulated market, the Member State deemed to be the most relevant market in terms of liquidity for the underlying security, in accordance with paragraph 2;
(b)
where the underlying security is a bond or other transferable security covered by Article 4(1)(18)(b) of Directive 2004/39/EC or a money market instrument which is admitted to trading on a regulated market, the Member State deemed to be the most relevant market in terms of liquidity for that underlying security, in accordance with paragraphs 3, 4 or 5;
(c)
where the underlying is an index composed of shares all of which are traded on a particular regulated market, the Member State where that regulated market is situated.
7. In any case not covered by paragraphs 2 to 6, the most relevant market shall be the Member State where the regulated market that first admitted the transferable security or derivative contract or financial contract for differences to trading is located.
8. Where a financial instrument covered by paragraphs 2, 5 or 7, or the underlying financial instrument of a financial instrument covered by paragraph 6 to which one of paragraphs 2, 5 or 7 is relevant, was first admitted to trading on more than one regulated market simultaneously, and all those regulated markets share the same home Member State, that Member State shall be the most relevant market.
Where the regulated markets concerned do not share the same home Member State, the most relevant market in terms of liquidity for that instrument shall be the market where the turnover of that instrument is highest.
For the purposes of determining the most relevant market where the turnover of the instrument is highest, each competent authority that has authorised one of the regulated markets concerned shall calculate the turnover for that instrument in its respective market for the previous calendar year, provided that the instrument was admitted to trading at the beginning of that year.
Where the turnover for the relevant financial instrument cannot be calculated by reason of insufficient or non-existent data and the issuer has its registered office in a Member State, the most relevant market shall be the market of the Member State where the registered office of the issuer is situated.
However, where issuer does not have its registered office in a Member State, the most relevant market for that instrument shall be the market where the turnover of the relevant instrument class is the highest. For the purposes of determining that market, each competent authority that has authorised one of the regulated markets concerned shall calculate the turnover for the instruments of the same class in its respective market for the preceding calendar year.
The relevant classes of financial instrument are the following:
(a)
shares;
(b)
bonds or other forms of securitised debt;
(c)
any other financial instruments.
(Second subparagraph of Article 25(3) of Directive 2004/39/EC)
1. A competent authority may, in January every year, notify the relevant competent authority for a particular financial instrument that it intends to contest the determination, made in accordance with Article 9, of the most relevant market for that instrument.
2. Within four weeks of the sending of the notification, both authorities shall calculate the turnover for that financial instrument in their respective markets over the period of the previous calendar year.
If the results of that calculation indicate that the turnover is higher in the market of the contesting competent authority, that market shall be the most relevant market for that financial instrument. Where that financial instrument is of a type specified in Article 9(6)(a) or (b), that market shall also be the most relevant market for any derivative contract or financial contract for differences or transferable security which is covered by Article 4(1)(18)(c) of Directive 2004/39/EC and in respect of which that financial instrument is the underlying.
(Article 25(3) of Directive 2004/39/EC)
The relevant competent authority for one or more financial instruments shall ensure that there is established and maintained an updated list of those financial instruments. That list shall be made available to the single competent authority designated as a contact point by each Member State in accordance with Article 56 of Directive 2004/39/EC. That list shall be made available for the first time on the first trading day in June 2007.
In order to assist competent authorities to comply with the first subparagraph, each regulated market shall submit identifying reference data on each financial instrument admitted to trading in an electronic and standardised format to its home competent authority. This information shall be submitted for each financial instrument before trading commences in that particular instrument. The home competent authority shall ensure the data is transmitted to the relevant competent authority for the financial instrument concerned. The reference data shall be updated whenever there are changes to the data with respect to an instrument. The requirements in this subparagraph may be waived if the relevant competent authority for that financial instrument obtains the relevant reference data by other means.
(Article 25(5) of Directive 2004/39/EC)
1. The reports of transactions in financial instruments shall be made in an electronic form except under exceptional circumstances, when they may be made in a medium which allows for the storing of the information in a way accessible for future reference by the competent authorities other than an electronic form, and the methods by which those reports are made shall satisfy the following conditions:
(a)
they ensure the security and confidentiality of the data reported;
(b)
they incorporate mechanisms for identifying and correcting errors in a transaction report;
(c)
they incorporate mechanisms for authenticating the source of the transaction report;
(d)
they include appropriate precautionary measures to enable the timely resumption of reporting in the case of system failure;
(e)
they are capable of reporting the information required under Article 13 in the format required by the competent authority and in accordance with this paragraph, within the time limits set out in Article 25(3) of Directive 2004/39/EC.
2. A trade-matching or reporting system shall be approved by the competent authority for the purposes of Article 25(5) of Directive 2004/39/EC if the arrangements for reporting transactions established by that system comply with paragraph 1 of this Article and are subject to monitoring by a competent authority in respect of their continuing compliance.
(Article 25(3) and (5) of Directive 2004/39/EC)
1. The reports of transactions referred to in Article 25(3) and (5) of Directive 2004/39/EC shall contain the information specified in Table 1 of Annex I to this Regulation which is relevant to the type of financial instrument in question and which the competent authority declares is not already in its possession or is not available to it by other means.
2. For the purposes of the identification of a counterparty to the transaction which is a regulated market, an MTF or other central counterparty, as specified in Table 1 of Annex I, each competent authority shall make publicly available a list of identification codes of the regulated markets and MTFs for which, in each case, it is the competent authority of the home Member State, and of any entities which act as central counterparties for such regulated markets and MTFs.
3. Member States may require reports made in accordance with Article 25(3) and (5) of Directive 2004/39/EC to contain information related to the transactions in question which is additional to that specified in Table 1 of Annex I where that information is necessary to enable the competent authority to monitor the activities of investment firms to ensure that they act honestly, fairly and professionally and in a manner that promotes the integrity of the market, and provided that one of the following criteria is met:
(a)
the financial instrument which is the subject of the report has characteristics which are specific to an instrument of that kind and which are not covered by the information items specified in that table;
(b)
trading methods which are specific to the trading venue where the transaction took place involve features which are not covered by the information items specified in that table.
4. Member States may also require a report of a transaction made in accordance with Article 25(3) and (5) of Directive 2004/39/EC to identify the clients on whose behalf the investment firm has executed that transaction.
(Article 25(3) and (5) of Directive 2004/39/EC)
1. The competent authorities shall establish arrangements designed to ensure that the information received in accordance with Article 25(3) and (5) of Directive 2004/39/EC is made available to the following:
(a)
the relevant competent authority for the financial instrument in question;
(b)
in the case of branches, the competent authority that has authorised the investment firm providing the information, without prejudice to its right not to receive this information in accordance with Article 25(6) of Directive 2004/39/EC;
(c)
any other competent authority that requests the information for the proper discharge of its supervisory duties under Article 25(1) of Directive 2004/39/EC.
2. The information to be made available in accordance with paragraph 1 shall contain the information items described in Tables 1 and 2 of Annex I.
3. The information referred to in paragraph 1 shall be made available as soon as possible.
With effect from 1 November 2008 that information shall be made available no later than the close of the next working day of the competent authority that received the information or the request following the day on which the competent authority has received the information or the request.
4. The competent authorities shall coordinate the following:
(a)
the design and establishment of arrangements for the exchange of transaction information between the competent authorities as required by Directive 2004/39/EC and this Regulation;
(b)
any future upgrading of the arrangements.
5. Before 1 February 2007, the competent authorities shall report to the Commission, which shall inform the European Securities Committee, on the design of the arrangements to be established in accordance with paragraph 1.
They shall also report to the Commission, which shall inform the European Securities Committee, whenever significant changes to those arrangements are proposed.
(Article 58(1) of Directive 2004/39/EC)
1. Where a competent authority wishes another competent authority to supply or exchange information in accordance with Article 58(1) of Directive 2004/39/EC, it shall submit a written request to that competent authority containing sufficient detail to enable it to provide the information requested.
However, in a case of urgency, the request may be transmitted orally provided that it is confirmed in writing.
The competent authority which receives a request shall acknowledge receipt as soon as practicable.
2. Where the information requested under paragraph 1 is internally available to the competent authority that receives the request, that authority shall transmit the requested information without delay to the competent authority which made the request.
However, if the competent authority that receives the request does not possess or control the information requested, it shall immediately take the necessary steps to obtain that information and to comply fully with the request. That competent authority shall also inform the competent authority that made the request of the reasons for not sending immediately the information requested.
(Article 56(2) of Directive 2004/39/EC)
The operations of a regulated market in a host Member State shall be considered to be of substantial importance for the functioning of the securities markets and the protection of investors in that host State where one of the following criteria is met:
(a)
the host Member State has formerly been the home Member State of the regulated market in question;
(b)
the regulated market in question has acquired through merger, takeover, or any other form of transfer the business of a regulated market which had its registered office or head office in the host Member State.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
