Q&A · ESMA

Direct Electronic Access (DEA) and algorithmic trading - Article 17 of MiFID II and RTS 6 - Third party systems with algorithmic trading functionalities

Answered

Read the official text on the ESMA website(opens in a new tab)

AI-generated Summary

Firms using third-party systems with algorithmic trading functions remain responsible for complying with Article 17 MiFID II and RTS 6, and may meet technical requirements they cannot control themselves through contractual commitments from the system provider.

Details

Reference	ESMA_QA_1491
Issuer	ESMA
Published	15 Jul 2022
Answered	15 Jul 2022
Submitted	15 Jul 2022
ESMA topics	Direct Electronic Access and algorithmic trading
Earlier Q&A document	ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.34

Provisions it relates to

Article 17 MiFID II · Algorithmic trading
MiFID II
Explicit reference · 90%
MiFID II (whole act)
Explicit reference

Documents it refers to

RTSIn forceExplicit reference · 90%
Commission Delegated Regulation (EU) 2017/589 of 19 July 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the organisational requirements of investment firms engaged in algorithmic trading
European Commission · 31 Mar 2017 · EUR-Lex
AI summaryRTS 6 on organisational requirements for investment firms engaged in algorithmic trading, providing direct electronic access or acting as general clearing members: covers governance and compliance, testing and deployment of algorithms, annual self-assessment, stress testing, kill functionality, market abuse surveillance, pre- and post-trade controls, DEA client due diligence and order record keeping.