Q&A · ESMA

Direct Electronic Access (DEA) and algorithmic trading

Answered

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AI-generated Summary

Orders should be flagged as part of a market making strategy under RTS 24 (and RTS 6) only once the firm has concluded a market making agreement with the venue, since the flag distinguishes agreed market making from the firm's discretionary order flow.

Details

Reference	ESMA_QA_1613
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 3.17

Provisions it relates to

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

Documents it refers to

RTSIn forceExplicit reference · 90%
Commission Delegated Regulation (EU) 2017/580 of 24 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the maintenance of relevant data relating to orders in financial instruments
European Commission · 31 Mar 2017 · EUR-Lex
AI summaryRTS 24 setting the content, standards and format of order data that trading venue operators must keep for at least five years and provide to competent authorities on request under Article 25(2) MiFIR, including party identification, trading capacity, timestamps, order events, types, prices and instructions, and auction data.
RTSIn forceExplicit reference · 90%
Commission Delegated Regulation (EU) 2017/578 of 13 June 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards specifying the requirements on market making agreements and schemes
European Commission · 31 Mar 2017 · EUR-Lex
AI summaryRTS 8 on market making: specifies when algorithmic traders pursuing a market making strategy must sign a market making agreement with a trading venue, the agreement's minimum content and the exceptional circumstances that suspend obligations, and requires venues to run fair and non-discriminatory market making schemes for specified liquid instruments.