Requirement (MIFID)
Article 21 Criteria for determining whether an investment firm is a systematic internaliser
Requirements MIFID - REGULATION (EC) No 1287/2006
Description
Description
1. Where an investment firm deals on own account by
executing client orders outside a regulated market or an MTF,
it shall be treated as a systematic internaliser if it meets the
following criteria indicating that it performs that activity on an
organised, frequent and systematic basis:
(a) the activity has a material commercial role for the firm, and
is carried on in accordance with non-discretionary rules
and procedures;
(b) the activity is carried on by personnel, or by means of an
automated technical system, assigned to that purpose,
irrespective of whether those personnel or that system are
used exclusively for that purpose;
(c) the activity is available to clients on a regular or continuous
basis.
2. An investment firm shall cease to be a systematic internaliser
in one or more shares if it ceases to carry on the activity specified
in paragraph 1 in respect of those shares, provided that it has
announced in advance that it intends to cease that activity using
the same publication channels for that announcement as it uses
to publish its quotes or, where that is not possible, using a
channel which is equally accessible to its clients and other market
participants.
3. The activity of dealing on own account by executing client
orders shall not be treated as performed on an organised,
frequent and systematic basis where the following conditions
apply:
(a) the activity is performed on an ad hoc and irregular bilateral
basis with wholesale counterparties as part of business
relationships which are themselves characterised by dealings
above standard market size;
(b) the transactions are carried out outside the systems
habitually used by the firm concerned for any business
that it carries out in the capacity of a systematic internaliser.
4. Each competent authority shall ensure the maintenance and
publication of a list of all systematic internalisers, in respect of
shares admitted to trading on a regulated market, which it has
authorised as investment firms.
It shall ensure that the list is current by reviewing it at least
annually.
The list shall be made available to the Committee of European
Securities Regulators. It shall be considered as published when it
is published by the Committee of European Securities Regulators
in accordance with Article 34(5).
Comment
Applies to Article 4(1)(7) of Directive 2004/39/EC