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EU MiFID II Org Reg Art 21

Outlines general organizational requirements for investment firms. Firms are required to establish, maintain and implement adequate systems and procedures in a number of key areas including personnel, reporting, records, business continuity, etc.

Rule Overview

Jurisdiction: European Union

Regulator: ESMA

Topic: General Requirements

Overview
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Key organizational requirements include:

  • establishing, implementing and maintaining decision-making procedures and organizational structure:
    • specifying reporting lines; and
    • allocating functions and responsibilities.
  • ensuring awareness by staff of the procedures to be followed for the proper discharge of their responsibilities;
  • establishing, implementing and maintaining adequate internal control mechanisms designed to secure compliance with decisions and procedures at all levels;
  • employing personnel with the skills, knowledge and expertise necessary for the discharge of their responsibilities;
  • establish, implement and maintain effective internal reporting and communication of information at all levels;
  • maintain adequate and orderly records of the business and internal organization; and
  • ensure that performing multiple functions does not prevent personnel from discharging any of these soundly, honestly and professionally.

Firms must take into account the nature, scale and complexity of their business and the nature and range of investment services and activities undertaken when complying with these requirements.

Article 21(2)
Establish, implement and maintain safeguard security, integrity and confidentiality of information
Article 21(3)
Establish, implement and maintain adequate business continuity policy
Article 21(4)
Establish, implement and maintain accounting policies and procedures enabling them to deliver financial reports reflecting a true and fair view of their financial position compliant with applicable accounting standards and rules
Article 21(5)
Monitor and evaluate the adequacy and effectiveness of their systems, internal control mechanisms and arranagements on a regular basis

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