Article 17(7)(a) MiFID II specifies the organisational requirements to be met by all investment firms engaging in algorithmic trading, providing direct electronic access or acting as general clearing members in a manner appropriate to the nature, scale and complexity of their business model, addressing the potential impact of algorithms on the overall market.
The European Securities and Markets Authority issued a consultation paper on 19 December 2014 and the consultation closed on 2 March 2015. ESMA subsequently submitted draft RTS to the European Commission (Commission).
The Commission has now published a Delegated Regulation containing regulatory technical standards specifying the systems, procedures, arrangements and controls to be put in place and maintained by investment firms engaged in algorithmic trading to address the risks that may arise in financial markets in connection with the increased use of technology and recent developments in trading technology. Accompanying annexes have also been published. The Commission adopted the Delegated Regulation on 19 July 2016.
