Changes from plenary report to adopted text

Removed(a) the following paragraphs ▌are inserted:

Removed‘3a. research used or distributed to clients or potential clients by▌ investment firms providing portfolio management or other investment or ancillary services that has been produced by those firms, or produced by third parties and provided to those firms, shall be fair, clear and not misleading. Research shall be clearly identifiable as such or in similar terms, provided that all conditions applicable to the research are met.

Removed3b. Where the research is paid, fully or partially, by the issuer and disseminated to the public or to investment firms or to the clients of investment firms providing portfolio management or other investment or ancillary services, such research shall be labelled as “issuer-sponsored research” provided that it is produced in compliance with a Union code of conduct for issuer-sponsored research to be developed▌ by ESMA in accordance with the second subparagraph.

RemovedESMA shall develop draft regulatory technical standards to establish a harmonised Union code of conduct for issuer-sponsored research. The code of conduct shall set out minimum standards of independency and objectivity to be complied with by the providers of such research, and specify procedures for the identification and prevention of conflicts of interest.

RemovedFor the purpose of developing those regulatory technical standards, ESMA shall take into account relevant codes of conduct which have been established at national level. ESMA shall submit those draft regulatory technical standards to the Commission by … [12 months from the date of entry into force of this amending Directive].

RemovedPower is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council*.

RemovedThe Union-wide code of conduct for issuer-sponsored research shall be made publicly available on ESMA’s website.

Removed3c. Member States shall ensure that any issuer may submit its issuer-sponsored research, as referred to in paragraph 3b of this Article, to the relevant collection body as defined in [Article 2(2)] of▌ Regulation (EU) …/… of the European Parliament and of the Council**.

RemovedWhen submitting such information to the collection body, the issuer shall ensure that it is accompanied by metadata specifying that the information complies with the Union code of conduct for issuer-sponsored research but that it is not to be considered regulated information within the meaning of Directive 2004/109/EU of the European Parliament and of the Council*** nor investment research within the meaning of Directive 2014/65/EU and is therefore not subject to the same level of regulatory scrutiny as such regulated information or investment research.

Removed3d. Research that is labelled as issuer-sponsored research shall indicate on its front page in a clear and prominent way that it has been prepared in accordance with the Union code of conduct referred to in paragraph 3b. ▌ Any other research material paid fully or in part by the issuer but not prepared in compliance with the Union code of conduct as referred to in paragraph 3b shall be labelled as marketing communication. Member States shall ensure that competent authorities have the necessary supervisory and investigative powers to enforce compliance by investment firms producing or using issuer-sponsored research with the Union code of conduct referred to in paragraph 3b.’;

Removed(b) ▌paragraph 9a▌ is amended as follows:

Removed(i) the first subparagraph is replaced by the following;

Removed‘9a. Member States shall ensure that the provision of research by third parties to investment firms providing portfolio management or other investment or ancillary services to clients is to be regarded as fulfilling the obligations under paragraph 1 if:

Removed(a) an agreement has been entered into between the investment firm and the research provider, identifying the part of any combined charges or joint payments for execution services and research that is attributable to research;

Removed(b) the investment firm informs its clients about the separate or joint payments, as applicable, for execution services and research made to third party providers of research, and of the consequences of the choice of separate or joint payments for the client; and

Removed(c) the investment firm regularly assesses the quality and price of the research used based on robust quality and price criteria and its ability to contribute to better investment decisions. ESMA shall develop guidelines for investment firms for the purpose of conducting these assessments.

Removed(ii) the following subparagraphs are added:

RemovedMember States shall also ensure that the provision of research by third parties to investment firms providing portfolio management or other investment or ancillary services to clients is to be regarded as fulfilling the obligations under paragraph 1 if the research is provided by an independent research provider that is not engaged in execution services and is not part of a financial services group that includes an investment firm that offers execution or brokerage services.

RemovedInvestment firms shall keep a record of separate payments and gather information distinguishing the part of combined charges or joint payments for execution services and research that is attributable to research provided to them. Investment firms shall inform their clients annually, in an aggregated form, of their annual expenditure on research that is attributable to clients.

RemovedMember States shall ensure that third party providers of research are not required to facilitate joint payment for execution services and research from investment firms. Member States shall also ensure that investment firms purchasing research from third party providers of research shall always be able to pay separately for the execution services and research that they receive.

RemovedBy … [3 years from the date of entry into force of this amending Directive], ESMA shall prepare a report with a comprehensive assessment of the market developments regarding research within the meaning of this Article. That assessment shall incorporate at least the research coverage of listed firms, the costs and quality of that research, the impact of joint payments on best execution by investment firms, the share of separate and joint payments made by investment firms to third party providers for execution services and research, and the level of fulfillment of the demand for research by investors and other buyers.

RemovedBased on that report, the Commission may, if appropriate, submit to the European Parliament and the Council a legislative proposal concerning changes to the rules laid down in this Directive regarding research.

Removed(c) the following paragraph is inserted:

Removed9b. ESMA shall organise a procedure for the establishment of a voluntary Union-wide research marketplace focusing on research into small and medium-sized enterprises and initial public offerings (IPOs). The research marketplace shall be funded through fixed contributions by participating firms. Research shall be commissioned by independent research providers.

RemovedESMA shall develop draft regulatory technical standards setting out the conditions for establishment of a voluntary Union-wide research marketplace on research into small and medium-sized enterprises, including at least the following elements:

Removed(a) the conditions for joining the research marketplace;

Removed(b) the governance principles;

Removed(c) the funding arrangements;

Removed(d) the research coverage of the research marketplace.

RemovedESMA shall submit those draft regulatory technical standards to the Commission by … [12 months from the date of entry into force of this amending Directive].

RemovedPower is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the second subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Removed__________________

Removed* Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).

Removed** Regulation (EU) …/… of the European Parliament and of the Council of… establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability (OJ L... ELI:....).

Removed*** Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004, p. 38).’;

Removed(2a) Article 27 is amended as follows:

Removed(a) in paragraph 1, the first subparagraph is replaced by the following:

Removed‘1. Member States shall require that investment firms take all sufficient steps to obtain, when executing orders, the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature, the provision of investment research, or any other consideration relevant to the execution of the order. Nevertheless, where there is a specific instruction from the client the investment firm shall execute the order in accordance with that specific instruction.’;

Removed(ab) the following paragraph is inserted:

Removed‘1a. ESMA shall develop guidelines on how investment firms providing portfolio management or other investment or ancillary services to clients can comply with their best execution obligations when the investment firm uses joint payments for execution services and research as permitted under Article 24(9a).’;

Removed(3) Article 33 is amended as follows:

Removed(a) paragraphs 1 and 2 are replaced by the following:

Removed‘1. Member States shall provide that the operator of a MTF may apply to its home competent authority to have the MTF or a segment thereof, registered as an SME growth market.

Removed2. Member States shall provide that the home competent authority may register the MTF, or a segment thereof, as an SME growth market if the competent authority receives an application as referred to in paragraph 1 and is satisfied that the requirements in paragraph 3 are complied with in relation to the MTF, or that the requirements in paragraph 3a are complied with in relation to a segment of the MTF.’;

Removed(b) the following paragraph▌ is inserted:

Removed‘3a. Member States shall ensure that the relevant segment of the MTF is subject to effective rules, systems and procedures which ensure that the conditions referred to in paragraph 3 and all of the following conditions have been complied with:

Removed(a) the segment of the MTF registered as ‘SME growth market’ is clearly separated from the other market segments operated by the MTF operator, which is inter alia indicated by a different name, different rulebook, different marketing strategy, and different publicity, as well as a specific allocation of the market identification code to the SME growth market segment;

Removed(b) the transactions made on the specific SME growth market segment are clearly distinguished from other market activity within the other segments of the MTF;

Removed(c) upon request of the MTF’s home competent authority, the MTF shall provide a comprehensive list of the instruments listed on the SME growth market segment concerned, as well as any information on the operation of the SME growth market segment that the competent authority may request.’;

Removed(c) paragraphs 4 to 8 are replaced by the following:

Removed‘4. The criteria laid down in paragraphs 3 and 3a are without prejudice to compliance by the investment firm or market operator operating the MTF, or a segment thereof, with other obligations under this Directive relevant to the operation of MTFs. Those criteria do not prevent the investment firm or market operator operating the MTF from imposing additional requirements to those laid down in paragraphs 3 and 3a.

Removed5. Member States shall provide that the home competent authority may deregister a MTF, or a segment thereof, as an SME growth market in any of the following cases:

Removed(a) the investment firm or market operator operating the MTF, or a segment thereof, applies for its deregistration;

Removed(b) the requirements in paragraph 3 or 3a are no longer complied with in relation to the MTF, or a segment thereof.

Removed6. Members States shall require that if a home competent authority registers or deregisters a MTF, or a segment thereof, as an SME growth market under this Article, that authority shall as soon as possible notify ESMA of that registration or deregistration. ESMA shall publish on its website a list of SME growth markets and shall keep that list up to date.’;

Removed▌

Removed7. Member States shall require that a financial instrument of an issuer which is admitted to trading on an SME growth market is able to be traded on another trading venue only if the issuer has been duly informed and has not objected.

RemovedESMA shall develop guidelines on the communication methods used and the relevant timelines.

Removed8. The Commission is empowered to adopt delegated acts in accordance with Article 89 to supplement this Directive by further specifying the requirements laid down in paragraphs 3 and 3a of this Article. Those requirements shall take into account the need to maintain high levels of investor protection to promote investor confidence in those markets while minimising the administrative burdens for issuers on the market. They shall also take into account that de-registrations do not occur nor shall registrations be refused merely because of a temporary failure to comply with the requirement laid down in paragraph 3, point (a), of this Article.’;

Removed(4) the following article ▌ is inserted: