EUROPEAN UNION: ESMA Updates MiFID II Q&A on Market Structure Issues

Thursday November 16 2017

On 15^th November 2017, European Securities and Markets Authority (ESMA) updated its MiFID II Q&A on Market Structure Issues.

Please see below updates:

Question 10

Does the mandatory tick size regime apply to both orders and quotes?

Answer 10

Yes, the minimum tick size established under Article 49 of MiFID II and further specified in RTS 11 should apply to both orders and quotes. This regime is meant to create a level playing field between the different trading venues and the reference to “orders” in Article 2 of RTS 11 should not be interpreted as restricting the application of the tick size regime to only certain types of trading systems but, on the contrary, should be understood in the broadest sense.

Question 5

Does a client relationship exist between two counterparties that trade on a trading venue?

Answer 5

No, there is no new client relationship between two counterparties to a trade that takes place on a trading venue, including when the trading venue operates on a request for quote basis.

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