Q&A · ESMA

Incentives to be provided under stressed market conditions by the trading venues

Answered

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

AI-generated Summary

Under Article 6 of RTS 8, venues must offer incentives, monetary or not, that reward market makers who actually provide liquidity (presence, size and spread) in stressed conditions; schemes that reward all market makers regardless, or favour normal over stressed conditions, do not comply.

Details

Reference	ESMA_QA_1621
Issuer	ESMA
Published	4 Oct 2018
Answered	4 Oct 2018
Submitted	4 Oct 2018
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 3.26

Provisions it relates to

Article 48 MiFID II · Systems resilience, circuit breakers and electronic trading
MiFID II
Inferred · 85%
MiFID II (whole act)
Explicit reference

Documents it refers to

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.