5.III.4.2 Background

Many elements of the MiFID II quote access rules stem from MiFID I. Similar to the previous regime, does MiFID II permit SIs to protect themselves by permitting choice in who can be their clients, albeit within the legal boundaries set by MiFID II. The main change compared to MiFID I, is the rule-based nature of the MiFID II provisions:

MiFID II provides a definition of what constitutes the number and/or volume of orders sought by clients considerably exceeding the norm. In drafting MiFID II, ESMA was invited to provide develop recommendations for this criterion. ESMA noted that the risk management policy of an investment firm depends on a variety of aspects, including the nature, scale and complexity of the activities undertaken and on the risk appetite of the investment firm itself.1 For that reason, ESMA was of the view that it was not advisable to rigidly prescribe for all investment firms acting as SIs the number and/or volume of transactions exceeding the norm. Rather, ESMA recommended that each investment firm needed to determine in advance, in an objective and non-discriminatory way and consistently with its risk management policy, when the number or volume of orders was regarded as considerable exceeding the norm and expose the firm to undue risk.2

The Commission adopted the view of ESMA. This is evident in the final MiFID II text. MiFID II provides a definition of the criterion, but leaves room for SIs in determining the norm.