Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021 amending Directive 2014/65/EU as regards information requirements, product governance and position limits, and Directives 2013/36/EU and (EU) 2019/878 as regards their application to investment firms, to help the recovery from the COVID-19 crisis (Text with EEA relevance)

‘4 By 31 July 2021, the Commission shall adopt a delegated act in accordance with Article 89 in order to supplement this Directive by specifying, for the purpose of point (j) of paragraph 1 of this Article, the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level. Those criteria shall take into account the following elements: (a) whether the net outstanding notional exposure in commodity derivatives or emission allowances or derivatives thereof for cash settlement traded in the Union, excluding commodity derivatives or emission allowances or derivatives thereof traded on a trading venue, is below an annual threshold of EUR 3 billion; or (b) whether the capital employed by the group to which the person belongs is predominantly allocated to the main business of the group; or (c) whether or not the size of the activities referred to in point (j) of paragraph 1 exceeds the total size of the other trading activities at group level. The activities referred to in this paragraph shall be considered at group level. The elements referred to in the second subparagraph of this paragraph shall exclude: (a) intragroup transactions as referred to in Article 3 of Regulation (EU) No 648/2012 that serve group-wide liquidity or risk management purposes; (b) transactions in commodity derivatives or emission allowances or derivatives thereof that are objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity; (c) transactions in commodity derivatives or emission allowances or derivatives thereof entered into to fulfil obligations to provide liquidity on a trading venue, where such obligations are required by regulatory authorities in accordance with Union law or with national laws, regulations and administrative provisions, or by trading venues.’;

An investment firm shall be exempted from the requirements set out in the second to fifth subparagraphs of Article 16(3) and in Article 24(2), where the investment service it provides relates to bonds with no other embedded derivative than a make-whole clause or where the financial instruments are marketed or distributed exclusively to eligible counterparties.’;

1 The requirements laid down in point (c) of Article 24(4) shall not apply to services provided to professional clients except for investment advice and portfolio management.

2 The requirements laid down in the third subparagraph of Article 25(2) and in Article 25(6) shall not apply to services provided to professional clients, unless those clients inform the investment firm either in electronic format or on paper that they wish to benefit from the rights provided for in those provisions.

3 Member States shall ensure that investment firms keep a record of the client communications referred to in paragraph 2.’;

‘1 Member States shall adopt and publish, by 28 December 2020, the measures necessary to comply with: (a) provisions of this Directive insofar as they concern credit institutions; (b) Article 1(1) and (9) of this Directive as regards Article 2(5) and (6) and Article 21b of Directive 2013/36/EU, insofar as they concern credit institutions and investment firms. They shall immediately inform the Commission thereof. They shall apply those measures from 29 December 2020. However, the provisions necessary to comply with the amendments set out in point (21) and points (29)(a), (b) and (c) of Article 1 of this Directive as regards Article 84 and Article 98(5) and (5a) of Directive 2013/36/EU shall apply from 28 June 2021 and the provisions necessary to comply with the amendments set out in points (52) and (53) of Article 1 of this Directive as regards Articles 141b, 141c and Article 142(1) of Directive 2013/36/EU shall apply from 1 January 2022. Member States shall adopt, publish and apply by 26 June 2021 the measures necessary to comply with the provisions of this Directive insofar as they concern investment firms, except for those measures referred to in point (b) of the first subparagraph. When Member States adopt those measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.’.

The third, fourth and fifth subparagraphs of Article 94(2) are replaced by the following: ‘For the purpose of identifying staff whose professional activities have a material impact on the institution’s risk profile as referred to in Article 92(3), except as regards staff in investment firms, EBA shall develop draft regulatory technical standards setting out the criteria to define the following: (a) managerial responsibility and control functions; (b) material business unit and significant impact on the relevant business unit’s risk profile; and (c) other categories of staff not expressly referred to in Article 92(3) whose professional activities have an impact on the institution’s risk profile comparably as material as that of those categories of staff referred to therein. EBA shall submit those draft regulatory technical standards to the Commission by 28 December 2019. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010. As regards regulatory technical standards applying to investment firms, the empowerment laid down in Article 94(2) of this Directive as amended by Directive (EU) 2018/843 of the European Parliament and of the Council shall continue to apply until 26 June 2021.

1 Member States shall adopt and publish by 28 November 2021 the laws, regulations and administrative provisions necessary to comply with this Directive. They shall immediately communicate the text of those measures to the Commission. They shall apply those measures from 28 February 2022.

2 Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.

3 By way of derogation from paragraph 1, the amendments to Directives 2013/36/EU and (EU) 2019/878 shall apply from 28 December 2020.

By 31 July 2021, and based on the outcome of a public consultation conducted by the Commission, the Commission shall review, inter alia, (a) the operation of the structure of the securities markets, reflecting the new economic reality after 2020, data and data quality issues related to market structure, and the transparency rules, including issues related to third countries; (b) the rules on research; (c) the rules on all forms of payments to advisers and their level of professional qualification; (d) product governance; (e) loss reporting; and (f) client categorisation. If appropriate, the Commission shall submit a legislative proposal to the European Parliament and to the Council.

This Directive shall enter into force on the day following that of its publication in the Official Journal of the European Union.

This Directive is addressed to the Member States.