ESMA · ESMA_QA_1496 Answer Published

Multilateral and bilateral systems - Authorisation as trading venue for a system facilitating the multilateral interaction of trading interests in securities financing transactions

Regulation
Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Topic
Multilateral and bilateral systems
Submitted
2020-05-29
Answered
2020-05-29
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Question

Should the operation of a system facilitating the multilateral interaction of trading interests in securities financing transactions require authorisation as a trading venue?

Answer

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 5.9b] Multilateral systems are defined by MiFID II in relation to financial instruments. Securities financing transactions include, according to Article 3(11) of Regulation (UE) 2015/2365 (SFTR), repurchase transactions, securities financing lending or borrowing, buy-back or sell-buy back transactions and margin lending transactions, and such transactions can involve financial instruments. Therefore, ESMA considers that securities financing transactions could be treated as transactions in financial instruments, for the purpose of this question. In particular, an entity operating a system in which multiple third-party buying and selling trading interests in securities financing transactions relating to financial instruments are able to interact, should seek authorisation to operate a trading venue and the relevant provisions should apply.
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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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