ESMA · ESMA_QA_1604 Answer Published

Algorithmic trading - OTC 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
Browse MiFID Register → More Q&As on this regulation →

Question

Does the MiFID II obligation relating to algorithmic trading apply to electronic OTC trading? Are algorithms that provide quotes/orders to customers subject to the requirements set out in MiFID II?

Answer

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.8] Article 17 of MiFID II covers the trading activity that takes place on a trading venue. Therefore, OTC trading activity, such as the generation of quotes sent bilaterally to clients is not covered by the provisions in Article 17 of MiFID II (and any further requirements thereof).
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

Algorithmic trading

Answered 2016-12-19

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

Answered 2022-07-15

Algorithmic trading

Answered 2017-04-03

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

Algorithmic trading

Answered 2016-12-19

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.