ESMA · ESMA_QA_1620 Answer Published

Authorisation as an investment firm under MiFID II to provide DEA to an EU trading venue

Regulation
Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Topic
Direct Electronic Access and algorithmic trading
Submitted
2017-11-15
Answered
2017-11-15
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Question

Does a firm need to be authorised as an investment firm under MiFID II to provide DEA to an EU trading venue?

Answer

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.25] Yes, Article 48(7) of MiFID II provides that trading venues should only permit a member or participant to provide DEA “if they are investment firms authorised under [MiFID II] or credit institution authorised under Directive 2013/36/EU”. Therefore, non-EU firms (including non-EU firms licensed in an equivalent jurisdiction) or EU firms without a MiFID II licence are not allowed to provide DEA to their clients. This applies regardless of where the clients using the DEA service are located.
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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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