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MAR 10.3 Position management controls

Application

MAR 10.3.1GRP

1The application of this section is set out in the following table:

Type of firm

Applicable provisions

a UK market operator operating a trading venue

MAR 10.3.2G and MAR 10.3.4G

a UK firm operating a multilateral trading facility or an OTF and a UK branch of a third country investment firm operating a multilateral trading facility or an OTF

MAR 10.3.3R to MAR 10.3.5G

Position management controls applicable to UK market operators operating a trading venue

MAR 10.3.2GRP

A UK market operator operating a trading venue which trades commodity derivatives must apply position management controls on that trading venue, in accordance with paragraph 7BA of the Schedule to the Recognition Requirements Regulations, as inserted by the MiFI Regulations.

[Note: article 57(8) to 57(10) of MiFID]

Position management controls applicable to UK firms and UK branches of third country investment firms operating an MTF or OTF

MAR 10.3.3RRP
  1. (1)

    This rule applies to a UK firm operating a multilateral trading facility or an OTF and a UK branch of a third country investment firm operating a multilateral trading facility or an OTF.

  2. (2)

    A firm must apply position management controls which enable an MTF or OTF at least to:

    1. (a)

      monitor the open interest positions of persons;

    2. (b)

      access information, including all relevant documentation, from persons about:

      1. (i)

        the size and purpose of a position or exposure entered into;

      2. (ii)

        any beneficial or underlying owners;

      3. (iii)

        any concert arrangements; and

      4. (iv)

        any related assets or liabilities in the underlying market;

    3. (c)

      require a person to terminate or reduce a position on a temporary or permanent basis and unilaterally to take appropriate action to ensure the termination or reduction if the person does not comply; and

    4. (d)

      require a person to provide liquidity back into the market at an agreed price and volume on a temporary basis with the express intent of mitigating the effects of a large and dominant position.

  3. (3)

    The position management controls in paragraph (2) must take account of the nature and composition of market participants and of the use they make of the contracts admitted to trading and must:

    1. (a)

      be transparent;

    2. (b)

      be non-discriminatory; and

    3. (c)

      specify how the controls apply to persons.

  4. (4)

    A firm must inform the FCA of the details of the position management controls in relation to each MTF or OTF it operates which trades commodity derivatives.

[Note: article 57(8) to 57(10) of MiFID]

Supervision of position management controls

MAR 10.3.4GRP

An operator of a trading venue referred to in MAR 10.3.1G may include provisions in its rulebook which impose appropriate obligations on its members or participants as part of compliance with its position management controls obligations.

Position management controls: Procedure for informing the FCA

MAR 10.3.5GRP

A firm must comply with the obligation in MAR 10.3.3R(4) by completing the form available at www.fca.org.uk.