ESMA · ESMA_QA_1603 Answer Published

Algorithmic trading

Regulation
Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Topic
Direct Electronic Access and algorithmic trading
Submitted
2017-04-03
Answered
2017-04-03
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Question

When would an investment firm using only algorithms which draw human traders’ attention to trading opportunities qualify as engaged in algorithmic trading?

Answer

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.7] The use of algorithms which only serve to inform a trader of a particular investment opportunity is not considered as algorithmic trading, provided that the execution is not algorithmic.
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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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