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.

Article 2 Content of market making agreements

  1. (1)

    The content of a binding written agreement referred to in UK law corresponding to Article 17(3)(b) and Article 48(2) of Directive 2014/65/EU shall include at least:

    1. (a)

      the financial instrument or instruments covered by the agreement;

    2. (b)

      the minimum obligations to be met by the investment firm in terms of presence, size and spread that shall require at least posting firm, simultaneous two-way quotes of comparable size and competitive prices in at least one financial instrument on the trading venue for at least 50 % of daily trading hours of during which continuous trading takes place excluding opening and closing auctions and calculated for each trading day;

    3. (c)

      where appropriate, the terms of the applicable market making scheme;

    4. (d)

      the obligations of the investment firm in relation to the resumption of trading after volatility interruptions;

    5. (e)

      the surveillance, compliance and audit obligations of the investment firm enabling it to monitor its market making activity;

    6. (f)

      the obligation to flag firm quotes submitted to the trading venue under the market making agreement in order to distinguish those quotes from other order flows;

    7. (g)

      the obligation to maintain records of firm quotes and transactions relating to the market making activities of the investment firm, which are clearly distinguished from other trading activities and to make those records available to the trading venue and the competent authority upon request.

  2. (2)

    Trading venues shall continuously monitor the effective compliance of the relevant investment firms with the market making agreements.