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AFTI-AMAFI
They understand that it refers to the confirmation of the allocation and of all information which will facilitate the settlement on the transaction on the intended settlement date. Therefore it doesn’t refer to the confirmation by the professional client of the acceptance of the terms of the transaction that follows the confirmation of the execution of the order, the latter being required under MiFID II (article 59 of Delegated regulation 2017/565). Indeed, such acceptance should not be given only when the broker has not received the necessary information in advance and doesn’t hold the client’s assets.
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SWIFT
SWIFT thanks the European Securities and Markets Authority for the opportunity to provide comments on the Consultation Paper Guidelines on standardised procedures and messaging protocols used between investment firms and their professional clients under Article 6(2) of CSDR
SWIFT is a member-owned cooperative headquartered in Belgium. SWIFT is organised under Belgian law and is owned and controlled by its shareholders, comprising more than 2,000 financial institutions. We connect more than 11,000 institutions in more than 200 countries and territories.
SWIFT provides banking, securities, and other regulated financial organisations, as well as corporates, with a comprehensive suite of messaging products and services. We support a range of financial functions, including payments, securities settlement, reporting, and treasury operations. SWIFT also has a proven track record of bringing the financial community together to work collaboratively, to shape market practice, define formal standards and debate issues of mutual interest.
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AFME
Throughout the consultation, the terms "investment firm" and "professional client" are used. AFME’s assumption is that ESMA is trying to differentiate between investment banks and their clients such as Investment/Asset Managers (as opposed to retail or private clients). However, many of the Asset/Fund Managers may be classed under MiFID as Investment Firms. Should two Investment Firms trade with each other, clarification to ensure that both parties should be held to the same standard would be welcomed.
For the purposes of this response, it has used the term “investment firm” to define the investment bank, and “client” or “professional client” to define the Investment/Asset Manager.
As a more general remark, AFME also finds the term “confirmation” when used in the context of this paper somewhat confusing. The term “allocation” also slightly diverges from its common use. Allocation is often linked to grouping orders . There are usually two parts to the confirmation process following the execution of a transaction:
- the confirmation by the Investment Firm to its Professional Client of the execution details of the transaction. This occurs as soon as the transaction has been completed. Further detail is added by the investment firm (e.g. addition of fees) and provided promptly to the Professional Client as required by Article 59 of the MIFID2 delegated regulation (2017/565). Allocations may follow from the Professional Client (for example, if there is more than one account involved.)
- the affirmation by the Professional Client. This occurs after the client checks and agrees all aspects of the allocations.
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Consultation Paper on CSDR GL on Art 6 standardised procedures and messaging protocols