ESMA · ESMA_QA_1624 Answer Published

Requirement imposed on market markers to post simultaneous two-way quotes of comparable size

Regulation
Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Topic
Direct Electronic Access and algorithmic trading
Submitted
2018-11-14
Answered
2018-11-14
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Question

Does the requirement imposed on market markers to post simultaneous two-way quotes of comparable size restrict the ability of market makers to voluntarily post additional liquidity on either side of the order book?

Answer

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.29] No, it is not the intention of RTS 8 to prevent market makers that have live two-way quotes from adding further liquidity in the order book on a voluntary basis. Market Makers are therefore free to discretionarily post additional quotes on either side of order book in addition to the “simultaneous two-way quotes of comparable size and competitive price” imposed by Article 2(1)(b) of RTS 8. Only quotes that are posted to fulfil the obligations imposed by the market making agreement should be flagged as such in field 8 of Table 2 of the Annex of RTS 24 and field 3 of Table 3 of Annex II of RTS 6.
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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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