Organized Trading facilities OTFs

Question

Does discretion have to be exercised on an order by order basis?

European Securities and Markets Authority · Accepted Answer

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 5.20] ESMA is of the view that discretion at order level (see Answer 12) does not have to be exercised order by order. As an example, the OTF operator may consider, at a given point in time that some or all orders of a specific size in a specific instrument should be retracted from the OTF as more favourable conditions are temporarily available elsewhere. However, the OTF operator must have the ability to exercise discretion at order level if circumstances so require, for instance in case of prior execution of an order on another trading venue. Conversely, ESMA is of the view that, at execution level, discretion whether not to match two potential matching buying and selling interests can only be meaningfully exercised at order level.

Organized Trading facilities OTFs

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