No. 982/2023

8 September 2023

RULES

on operating licences and organisational requirements for securities firms, information disclosure regarding qualifying holdings and criteria for ancillary activities.

Article 1 Scope.

These Rules apply to the detailed implementation of Act No. 115/2021 on markets for financial instruments with regard to:

• The criteria specifying when an activity is considered ancillary to the main activity, pursuant to point (a) of the second paragraph of point 10 of the first paragraph of Article 2 of the Act.

• An exhaustive list of the information that proposed owners must include in a notification of a proposed acquisition of a qualifying holding in a securities firm, pursuant to Article 12 of the Act.

• Organisational requirements for securities firms engaged in trading using algorithmic trading, pursuant to Articles 25 and 27 of the Act.

• Operating licences and additional operating licences of securities firms pursuant to Chapter I of Part 2 of the Act.

• Consultation with competent authorities in other Member States before an operating licence is granted, pursuant to Article 140 of the Act.

• Notifications by securities firms outside the EEA regarding activities, pursuant to Article 46. MiFIR.

Article 2 References.

Market-making agreement: References in these Rules to a market-making agreement pursuant to Articles 17 and 48 of Directive 2014/65/EU shall be understood as references to a market-making agreement pursuant to Articles 26 and 84 of Act No. 115/2021 on markets for financial instruments.

Commodity derivatives pursuant to point 10 of Section C of Annex I to MiFID II: References in these Rules to derivatives pursuant to point 10 of Section C of Annex I to Directive 2014/65/EU shall be understood as references to derivatives pursuant to point (g) of item 2 of the first paragraph of Article 4 of Act No. 115/2021 on markets for financial instruments.

Overall compliance with Article 17. MiFID II: References in these Rules to overall compliance with Article 17 of Directive 2014/65/EU shall be understood as references to compliance with Articles 25-27 of Act No. 115/2021 on markets for financial instruments.

Requirements pursuant to the fifth paragraph of Article 17. MiFID II: References in these Rules to requirements in accordance with the fifth paragraph of Article 17 of Directive 2014/65/EU shall be understood as references to compliance with Article 27 of Act No. 115/2021 on markets for financial instruments.

Competent authority: The Central Bank of Iceland is the competent authority pursuant to point 33 of the first paragraph of Article 4 of Act No. 115/2021.

Money laundering and terrorist financing: References to money laundering or terrorist financing, within the meaning of Article 1 of Directive 2005/60/EC, shall be understood as references to money laundering or terrorist financing pursuant to Act No. 140/2018 on measures against money laundering and terrorist financing.

Matched principal trading: References in these Rules to matched principal trading, cf. point 38 of the first paragraph of Article 4 of Directive 2014/65/EU, shall be understood as references to matched principal trading pursuant to the first paragraph of Article 4 of Act No. 115/2021 on markets for financial instruments.

Consultation pursuant to Article 84. MiFID II: References in these Rules to consultation pursuant to Article 84 of Directive 2014/65/EU shall be understood as references to consultation before an operating licence is granted pursuant to Article 140 of Act No. 115/2021 on markets for financial instruments.

Agreement pursuant to the sixth paragraph of Article 17. MiFID II: References in these Rules to the agreement referred to in the sixth paragraph of Article 17 of Directive 2014/65/EU shall be understood as references to the agreement pursuant to Article 25 of Act No. 115/2021 on markets for financial instruments.

Operating licence for portfolio management: References in these Rules to an operating licence to provide the investment service "portfolio management", referred to in point 4 of Part A of Annex I to Directive 2004/39/EC, shall be understood as references to portfolio management pursuant to the first paragraph of Article 4 of Act No. 115/2021 on markets for financial instruments.

Operating licence pursuant to CRD IV: References in these Rules to an operating licence in accordance with Directive 2013/36/EU shall be understood as references to an operating licence pursuant to Act No. 161/2002 on financial undertakings.

Operating licence pursuant to MiFID II: References in these Rules to an operating licence in accordance with Directive 2014/65/EU shall be understood as references to an operating licence pursuant to Act No. 115/2021 on markets for financial instruments.

Section II of MiFID II: References in these Rules to Section II of Directive 2014/65/EU shall be understood as references to Part 2 of Act No. 115/2021 on markets for financial instruments.

Time limit pursuant to the third paragraph of Article 7. MiFID II: References in these Rules to the time limit set out in the third paragraph of Article 7 of Directive 2014/65/EU shall be understood as references to the time limit pursuant to the second paragraph of Article 7 of Act No. 115/2021 on financial undertakings.

Prudential requirements pursuant to Directives 2002/87/EC and 2013/36/EU: References in these Rules to prudential requirements pursuant to Directives 2002/87/EC and 2013/36/EU shall be understood as references to prudential requirements under Act No. 61/2017 on supplementary supervision of financial conglomerates and Act No. 161/2002 on financial undertakings.

Securities firm pursuant to MiFID II: References in these Rules to a securities firm in accordance with Directive 2014/65/EU shall be understood as references to a securities firm in accordance with Act No. 115/2021 on markets for financial instruments.

Ancillary activity pursuant to points (i) and (ii) of point (j) of the first paragraph of Article 2. MiFID II: References in these Rules to ancillary activity pursuant to points (i) and (ii) of point (j) of the first paragraph of Article 2 of Directive 2014/65/EU shall be understood as references to activity pursuant to points (a) and (b) of the first paragraph of point 10 of the first paragraph of Article 2 of Act No. 115/2021 on markets for financial instruments.

Dealing on own account or underwriting: References in these Rules to activities involving "dealing on own account" or "underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis", referred to in points 3 and 6 of Part A of Annex I to Directive 2004/39/EC, shall be understood as references to the first paragraph of Article 4 of Act No. 115/2021 on markets for financial instruments.

Transactions pursuant to points (a), (b) and (c) of the fifth subparagraph of the fourth paragraph of Article 2. MiFID II: References in these Rules to transactions referred to in points (a), (b) and (c) of the fifth subparagraph of the fourth paragraph of Article 2 of Directive 2014/65/EU shall be understood as transactions:

• A group as referred to in Article 3 of Regulation (EU) No 648/2012, cf. Act No 15/2018 on derivative transactions, central counterparties and trade repositories, which serves the purpose of providing the group with liquidity or for risk management purposes.

• Derivatives that can be objectively measured as reducing risk directly related to commercial activity or financing.

• Commodity derivatives and emission allowances executed to fulfil obligations to provide liquidity on a trading venue where supervisory authorities, or a trading venue, require such obligations in accordance with national law.

Article 3. Implementation of regulations.

With these rules, the following Commission regulations (EU) shall enter into force in this country:

• Commission Delegated Regulation (EU) 2016/2022 of 14 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards on the information to be notified when firms from third countries apply for registration and on the format of information to be provided to clients, published in the EEA Supplement to the Official Journal of the European Union No 20 of 24 March 2022, pp. 1-3, with the adaptations resulting from Decision of the Joint EEA Committee No 85/2019 published in the EEA Supplement to the Official Journal of the European Union No 85 of 29 March 2019 pp. 7-19, cf. also Protocol 1 on horizontal adaptation to the Agreement on the European Economic Area, cf. the Act on the European Economic Area, No 2/1993, in which the Protocol is incorporated into law.

Commission regulations (EU) published in the EEA Supplement to the Official Journal of the European Union No 55 of 26 August 2021, pp. 214-221 and 261-272, with the adaptations resulting from Decision of the Joint EEA Committee No 85/2019 published in the EEA Supplement to the Official Journal of the European Union No 88 of 31 October 2019 pp. 7-19, cf. also Protocol 1 on horizontal adaptation to the Agreement on the European Economic Area, cf. the Act on the European Economic Area, No 2/1993, in which the Protocol is incorporated into law:

• Commission Delegated Regulation (EU) 2017/1943 of 14 July 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards on information and requirements for the authorisation of investment firms.

• Commission Delegated Regulation (EU) 2017/1945 of 19 June 2017 on implementing technical standards with regard to notifications by investment firms that have applied for or been granted authorisation under Directive 2014/65/EU of the European Parliament and of the Council, or to such firms.

Commission regulations (EU) published in the EEA Supplement to the Official Journal of the European Union No 72 of 11 November 2021, pp. 216-247 and 261-272, with the adaptations resulting from Decision of the Joint EEA Committee No 85/2019 published in the EEA Supplement to the Official Journal of the European Union No 88 of 31 October 2019 pp. 7-19, cf. also Protocol 1 on horizontal adaptation to the Agreement on the European Economic Area, cf. the Act on the European Economic Area, No 2/1993, in which the Protocol is incorporated into law:

• Commission Delegated Regulation (EU) 2017/589 of 19 July 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the organisational requirements of investment firms engaging in algorithmic trading.

• Commission Delegated Regulation (EU) 2017/1946 of 11 July 2017 supplementing Directives 2004/39/EC and 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for an exhaustive list of information to be included by proposed acquirers in a notification of a proposed acquisition of a qualifying holding in an investment firm.

• Commission Implementing Regulation (EU) 2017/981 of 7 June 2017 on implementing technical standards with regard to standard forms, templates and procedures for consultation of other competent authorities before granting authorisation in accordance with Directive 2014/65/EU of the European Parliament and of the Council, published in the EEA Supplement to the Official Journal of the European Union No 20 of 24 March 2022, pp. 21-28, with the adaptations resulting from Decision of the Joint EEA Committee No 85/2019 published in the EEA Supplement to the Official Journal of the European Union No 88 of 31 October 2019 pp. 7-19, cf. also Protocol 1 on horizontal adaptation to the Agreement on the European Economic Area, cf. the Act on the European Economic Area, No 2/1993, in which the Protocol is incorporated into law.

• Commission Delegated Regulation (EU) 2021/1833 of 14 July 2021 supplementing Directive 2014/65/EU of the European Parliament and of the Council in order to specify criteria for determining when an activity is to be considered an ancillary activity to the main activity at group level, published in the EEA Supplement to the Official Journal of the European Union No. 40 of 25 May 2023, pp. 37-46, with the adaptations resulting from Decision of the EEA Joint Committee No. 283/2022 published in the EEA Supplement to the Official Journal of the European Union No. 35 of 4 May 2023 p. 11, cf. also Protocol 1 on horizontal adaptations to the Agreement on the European Economic Area, cf. the Act on the European Economic Area, No. 2/1993, in which the Protocol is incorporated into law.

Article 4. Entry into force.

These Rules, which are issued pursuant to the authorisation in the third paragraph of Article 2, the fourth paragraph of Article 7, the seventh paragraph of Article 12, the eighth paragraph of Article 25, the sixth paragraph of Article 27, the fourth paragraph of Article 140 and item 35 of the second paragraph of Article 145 of Act No. 115/2021 on markets for financial instruments, enter into force immediately. At the same time, Rules No. 853/2022 on organisational requirements for securities firms, disclosure of qualifying holdings and criteria for ancillary activities shall cease to be in force.

Central Bank of Iceland, 8 September 2023.

	Ásgeir Jónsson Governor of the Central Bank.	Rannveig Júníusdóttir Managing Director.

Section B - Publication: 25 September 2023