ESMA · ESMA_QA_1494 Answer Published

Tick size regime - Periodic auctions systems

Regulation
Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Topic
Tick size regime
Submitted
2019-10-02
Answered
2019-10-02
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Question

Are periodic auctions systems subject to the tick size regime?

Answer

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 4.11] Yes, periodic auction trading systems are subject to the tick size regime defined under Article 49 of MiFID II and further specified under CDR (EU) 2017/588. Therefore, market operators and investment firms operating such trading systems need to ensure that orders are submitted and that transactions are executed at a price that is in line with the mandatory tick size regime. For periodic auction systems that do not benefit from a reference price waiver, this prohibits the execution of transactions at a price that corresponds to the mid-point in cases where the spread consists of an uneven number of ticks.
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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.

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