ESMA · ESMA_QA_1487 Answer Published

Direct Electronic Access (DEA) and algorithmic trading - Article 19 of CDR 2017/565 - high frequency trading techniques tests

Regulation
Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Topic
Direct Electronic Access and algorithmic trading
Submitted
2019-02-01
Answered
2019-02-01
Browse MiFID Register → More Q&As on this regulation →

Question

How should the tests to identify high frequency trading techniques, described in Article 19 of CDR 2017/565, be undertaken?

Answer

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.30] Article 19 of Commission Delegated Regulation (EU) 2017/565 states the requirements for a trading technique to be deemed as high frequency algorithmic trading. Regarding the indicators in Articles 19(1)(a) & (b) firms should assess each instrument based on the relevant trading hours of that instrument for Article 19(1)(a), and sum those calculated indicators for all relevant instruments traded on a trading venue together for Article 19(1)(b). Regarding the applicability established in Article 19(2) firms should apply these calculations to liquid instruments according to the relevant ESMA publications at the time of calculation.
View original on European Securities and Markets Authority ↗

This Q&A is published by European Securities and Markets Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

Similar Q&As

High-Frequency Trading (HFT) technique - Identification and authorisation

Answered 2017-04-03

DEA users - HFT technique

Answered 2017-04-03

Direct Electronic Access (DEA) and algorithmic trading - Trading functionalities with automated management of orders

Answered 2022-07-15

Direct Electronic Access (DEA) and algorithmic trading - Article 17 of MiFID II and RTS 6 - Third party systems with algorithmic trading functionalities

Answered 2022-07-15

Direct Electronic Access (DEA) and algorithmic trading - Trading systems - RTS 7

Answered 2019-12-05

More Q&As on this topic

Market making in securitised derivatives

Answered 2024-01-08

Direct Electronic Access (DEA) and algorithmic trading - Trading venues

Answered 2022-09-23

Direct Electronic Access (DEA) and algorithmic trading - Article 17 of MiFID II and RTS 6 - Third party systems with algorithmic trading functionalities

Answered 2022-07-15

Direct Electronic Access (DEA) and algorithmic trading - Trading functionalities with automated management of orders

Answered 2022-07-15

Direct Electronic Access (DEA) and algorithmic trading

Answered 2021-02-03

📋 Track EU financial regulation continuously

Forseti monitors EU financial regulation and delivers personalised alerts anchored to verified official sources.

Start free trial → Learn more

14-day free trial. No credit card required.