Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

MAR 7A.4 Requirements when providing direct electronic access

Application

MAR 7A.4.1RRP

1This section applies to a firm which provides the services of DEA to a trading venue.

Systems and controls

MAR 7A.4.2RRP

A firm must have in place systems and controls which:

  1. (1)

    ensure it conducts an assessment and review of the suitability of clients using the service;

  2. (2)

    prevent clients using the service from exceeding appropriate pre-set trading and credit thresholds;

  3. (3)

    prevent trading by clients which:

    1. (a)

      may create risks to the firm;

    2. (b)

      or may create, or contribute to, a disorderly market; or

    3. (c)

      could be contrary to the Market Abuse Regulation or the rules of the trading venue.

[Note: article 17(5) of MiFID]

Client dealings

MAR 7A.4.3RRP
  1. (1)

    A firm must monitor the transactions made by clients using the service to identify:

    1. (a)

      infringements of the rules of the trading venue; or

    2. (b)

      disorderly trading conditions; or

    3. (c)

      conduct which may involve market abuse and which is to be reported to the FCA.

  2. (2)

    A firm must have a binding written agreement with each client which:

    1. (a)

      details the essential rights and obligations of both parties arising from the provision of the service; and

    2. (b)

      states that the firm is responsible for ensuring the client complies with the requirements of MiFID and the rules of the trading venue.

[Note: article 17(5) of MiFID] Notifications

Notifications

MAR 7A.4.4RRP

A firm must immediately notify the FCA2 if it is providing DEA services.2

[Note: article 17(5) of MiFID and MiFID RTS 6 specifying the organisational requirements of investment firms providing direct electronic access]

MAR 7A.4.5RRP

A firm must provide the following, at the FCA’s request, within 14 days from receipt of the request:

  1. (1)

    a description of the systems mentioned in MAR 7A.4.2R(1);

  2. (2)

    evidence that those systems have been applied; and

  3. (3)

    information stored in accordance with MAR 7A.4.6R.

[Note: article 17(5) of MiFID]

Record keeping

MAR 7A.4.6RRP

A firm must arrange for records to be kept:

  1. (1)

    on the matters referred to in MAR 7A.4.2R in relation to its systems and controls; and

  2. (2)

    in order to enable it to meet any requirement imposed on it under MAR 7A.4.5R.

[Note: article 17(5) of MiFID]