The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has today published the Final Report on the Opinion on the trading venue perimeter, providing guidance on when certain systems and facilities qualify as multilateral and therefore should seek authorization as a trading venue.

The opinion builds on the MiFID II definition of multilateral systems and clarifies how to interpret the elements of the definition. It provides information in particular on how to classify a system and how to identify when third-party trading interests interact within a system.

The combination of the changes introduced in MiFID II and the continuous innovation in financial markets has led to different interpretations within the EU of whether a system needs to be authorized as a trading venue. The Final Report seeks to harmonize interpretations on, amongst others, new technology providers and request for quote systems that may, in some instances, operate de facto a multilateral system without proper authorization.

The guidance provided in this opinion will contribute to the consistency of supervisory practices and to achieving convergent approaches throughout the EU.

The document published today is based on the responses received to the consultation paper launched by ESMA in January 2022.

Next steps
ESMA will work with national competent authorities (NCAs) to ensure that firms assess their systems against the ESMA Opinion and reflect whether they are operating under the appropriate authorization. ESMA expects NCAs to require firms to take appropriate action to swiftly apply for authorization as a trading venue where necessary.