EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/5.III.1.2:5.III.1.2 Quantitative criteria

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/5.III.1.2

5.III.1.2 Quantitative criteria

Documentgegevens:

mr. J.E.C. Gulyás, datum 01-02-2021

Datum: 01-02-2021
Auteur: mr. J.E.C. Gulyás
JCDI: JCDI:ADS266850:1
Vakgebied(en): Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht

MiFID II replaces the MiFID I-phrase ‘organised, frequent and systematic’ to an investment firm which on ‘organised, frequent, systematic and substantial basis (emphasis writer)’ deals on own account when executing client orders.1MiFID II provides quantitative criteria (thresholds) to determine whether transactions are executed on a: (i) frequent and systematic; and (ii) substantial basis. The rationale behind adding the quantitative criteria is to ensure an objective and effective application of the SI-regime.2

5.III.1.2.1 Frequent and systematic basis 5.III.1.2.2 Substantial basis 5.III.1.2.3 Possibility to opt-in

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Art. 4(1)(20) MiFID II. ESMA has provided guidance for when an investment firm should be considered as ‘executing client orders’ when dealing on own account outside an RM or MTF (or OTF). In short, ESMA states that an investment firm dealing with a counterparty that is not a financial institution, the investment firm is deemed to be executing a client order. In case the counterparty is a financial institution, elements such as who initiated the trade should be considered (ESMA, Q&A on MiFID II and MiFIR transparency topics, 8 July 2020(ESMA70-872942901-35, Answer 7).

Recital 3 and 19 MiFIR.