AI Summary of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (Text with EEA relevance) (MiFID II Delegated Regulation)
This Commission Delegated Regulation (EU) 2017/565 supplements Directive 2014/65/EU by elaborating on the organisational requirements and operational conditions for investment firms. It mandates investment firms to maintain clear governance structures, effective internal controls, and robust risk management policies. Compliance functions must operate independently, ensuring adherence to legal obligations while managing potential conflicts of interest that can harm client interests.
Furthermore, the Regulation outlines stringent requirements for investment advice, client communications, and transparency regarding costs and charges associated with financial instruments. It also stipulates the need for accurate record-keeping to support regulatory oversight and protect investor interests. Each investment firm must demonstrate effective management of personal transactions to mitigate conflicts of interest, thereby fostering a fair and equitable investment environment.
