Q&A · ESMA

EU trading venue through sub-delegated DEA and exemption offered under Article 2(1)(d) of MiFID II

Answered

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

AI-generated Summary

Only Tier 1 DEA clients, who obtain the use of a member's trading code directly, have direct electronic access and so lose the own-account dealing exemption in Article 2(1)(d) MiFID II; Tier 2 clients using sub-delegated access do not hold the code and can still rely on the exemption.

Details

Reference	ESMA_QA_1619
Issuer	ESMA
Published	15 Nov 2017
Answered	15 Nov 2017
Submitted	15 Nov 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 3.24

Provisions it relates to

Article 2 MiFID II · Exemptions
MiFID II
Explicit reference · 90%
MiFID II (whole act)
Explicit reference

Documents it refers to

RTSIn forceExplicit reference
Commission Delegated Regulation (EU) 2017/584 of 14 July 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying organisational requirements of trading venues
European Commission · 31 Mar 2017 · EUR-Lex
AI summaryRTS 7 on organisational requirements of trading venues that permit or enable algorithmic trading: covers governance, compliance, staffing and outsourcing, member due diligence, conformance and algorithm testing, capacity, monitoring, business continuity, volatility mechanisms, pre- and post-trade controls, and conditions for direct electronic and sponsored access.
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.