The Association for Financial Markets in Europe (AFME) has published a paper setting out its view on the scope of the requirement in Article 23 of MiFIR for certain share trades to be carried out only on specified regulated trading venues.

The AIFME states: “In our view, the share trading obligation applies only to a MiFID investment firm when it is the final entity in the chain of execution in any given trade flow. Whereas a MiFID investment firm that places an order with or transmits an order to a third party (being another investment firm or a non-EEA firm) for execution, or is a passive intermediary in a chain of execution, should not be caught by the obligation, as it does not undertake the relevant trade.”

In its paper the AIFME sets out both the legislative and policy background concerning the share trading obligation and draws out arguments in support of its view. The AIFME also sets out at the back of the paper certain worked examples based on its view of the share trading obligation.

View AFME Europe – Share trading obligation: scope of the obligation, 6 September 2017