MAR 5A.4 Trading process requirements

Rules, procedures and arrangements

MAR 5A.4.1RRP

1A firm must have:

  1. (1)

    transparent rules and procedures for fair and orderly trading;

[Note: article 18(1) of MiFID]

  1. (2)

    objective criteria for the efficient execution of orders2;

[Note: article 18(1) of MiFID]

  1. (3)

    arrangements for the sound management of the technical operations of the facility, including the establishment of effective contingency arrangements to cope with the risks of systems disruption;

[Note: article 18(1) of MiFID]

  1. (4)

    transparent rules regarding the criteria for determining the financial instruments that can be traded under its systems;

[Note: subparagraph (1) of article 18(2) of MiFID]

  1. (5)

    arrangements to provide, or be satisfied that there is access to, sufficient publicly available information to enable its users to form an investment judgement, taking into account both the nature of the users and the types of instrument traded;

[Note: subparagraph (2) of article 18(2) of MiFID]

  1. (6)

    transparent and non-discriminatory rules, based on objective criteria, governing access to its facility and which must be published, maintained and implemented; and

[Note: article 18(3) of MiFID]

  1. (7)

    (as between the interests of the OTF, its owners, or the firm and those of the members and participants or users in the sound functioning of the trading venue) arrangements to identify clearly and to manage any conflict with adverse consequences for:

    1. (a)

      the operation of the trading venue for the members and participants or users; or

    2. (b)

      the members and participants or users otherwise.

    [Note: article 18(4) of MiFID]

Functioning of an OTF

MAR 5A.4.2RRP

A firm must:

  1. (1)

    ensure the OTF has at least three materially active members or users who each have the opportunity to interact with all the others in respect of price formation;

[Note: article 18(7) of MiFID]

  1. (2)

    provide the following to the FCA:

    1. (a)

      a detailed description of the functioning of the OTF, including any links to or participation by a regulated market, an MTF or OTF or systematic internaliser owned by the same firm; and

    2. (b)

      a list of its members, participants and users; and

    [Note: article 18(10) of MiFID and MiFID ITS 19 with regard to the content and format of the description of the functioning of MTFs and OTFs]

  2. (3)

    make available data relating to the quality of execution of transactions on that venue, including details about price, costs, speed and likelihood of execution for individual financial instruments to the public in the following manner:

    1. (a)

      at least on an annual basis; and

    2. (b)

      without any charges.

    [Note: article 27(3) of MiFID]

Transferable securities traded without issuer consent

MAR 5A.4.3RRP

Where a transferable security, which has been admitted to trading on a regulated market, is also traded on an OTF without the consent of the issuer, the firm operating the OTF must not make the issuer subject to any obligation relating to initial, ongoing or ad hoc financial disclosure with regard to that OTF.

[Note: article 18(8) of MiFID]