Q&A · ESMA

Direct Electronic Access (DEA) and algorithmic trading

Answered

Read the official text on the ESMA website(opens in a new tab)

AI-generated Summary

Where the RTS 26 exemption from order-by-order pre-trade checks for venue-traded cleared derivatives applies, general clearing members still need other pre-trade procedures, such as appropriate margining, to manage the risk of clients breaching position limits under Article 26(2) of RTS 6.

Details

Reference	ESMA_QA_1611
Issuer	ESMA
Published	7 Jul 2017
Answered	7 Jul 2017
Submitted	7 Jul 2017
ESMA topics	Direct Electronic Access and algorithmic trading
Earlier Q&A document	ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.15

Provisions it relates to

Article 17 MiFID II · Algorithmic trading
MiFID II
Inferred · 85%
MiFID II (whole act)
Explicit reference

Documents it refers to

RTSIn forceExplicit reference
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 engaged in algorithmic trading
European Commission · 31 Mar 2017 · EUR-Lex
AI summaryRTS 6 on organisational requirements for investment firms engaged in algorithmic trading, providing direct electronic access or acting as general clearing members: covers governance and compliance, testing and deployment of algorithms, annual self-assessment, stress testing, kill functionality, market abuse surveillance, pre- and post-trade controls, DEA client due diligence and order record keeping.