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Version date: 16 December 2016 - onwards

Question 3 Reporting on the depreciation of leveraged financial instruments or contingent liability transactions [Last update: 16 December 2016]

Art. 62 of the MiFID II Delegated Regulation

How does a firm fulfil the obligation to report if the values of a client’s leveraged financial instruments or contingent liability transactions depreciate by a 10% threshold on a particular business day, if a firm’s automated systems do not provide valuations throughout the day for all the instruments held?

Answer 3

In line with the response to Q&A 1 (on portfolio reporting), in order to identify whether there has been a depreciation by 10% or more, a firm could set a fixed daily valuation point for its leveraged financial instruments and inform clients in the same time frame set out in Q&A 1.

Article 62(2) of the MiFID II Delegated Regulation requires firms to report to clients that hold positions in leveraged financial instruments or contingent liability transactions, where the initial value (original cost) of each instrument depreciates by 10% and thereafter at multiples of 10%. It applies on an instrument-by-instrument bas

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