REC 2.6 General safeguards for investors, suspension and removal of financial instruments from trading and order execution on regulated markets2

(1)

A [UK RIE] must have non-discretionary rules for the execution of orders on a regulated market operated by it.

(2)

A [UK RIE] must not on a regulated market operated by it -

(a)

execute any client orders against its proprietary capital; or

(b)

engage in matched principal trading.

(1)

Waivers in accordance with Article 29(2) and 44(2) of [MiFID] [(see REC 2.6.3 UK)] may be granted by the[FCA]5 for systems operated by an MTF or a regulated market, if those systems satisfy one of the following criteria:

(a)

they must be based on a trading methodology by which the price is determined in accordance with a reference price generated by another system, where that reference price is widely published and is regarded generally by market participants as a reliable reference price;

(b)

they formalise negotiated transactions [(see REC 2.6.11 EU)], each of which meets one of the following criteria:

(i)

it is made at or within the current volume weighted spread reflected on the order book or the quotes of the market makers of the regulated market or MTF operating that system or, where the share is not traded continuously, within a percentage of a suitable reference price, being a percentage and a reference price set in advance by the system operator;

(ii)

it is subject to conditions other than the current market price of the share [see REC 2.6.12 EU)].

For the purposes of point (b), the other conditions specified in the rules of the regulated market or MTF for a transaction of this kind must also have been fulfilled.

In the case of systems having functionality other than as described in points (a) or (b), the waiver shall not apply to that other functionality.

(2)

Waivers in accordance with Articles 29(2) and 44(2) of [MiFID] [(see REC 2.6.3 UK)], based on the type of orders may be granted only in relation to orders held in an order management facility maintained by the regulated market or the MTF pending their being disclosed to the market.

For the purpose of Article 18(1)(b) [(see REC 2.6.10 EU)] a negotiated transaction shall mean a transaction involving members or participants of a regulated market or an MTF which is negotiated privately but executed within the regulated market or MTF and where that member or participant in doing so undertakes one of the following tasks:

(a)

dealing on own account with another member or participant who acts for the account of a client;

(b)

dealing with another member or participant, where both are executing orders on own account;

(c)

acting for the account of both the buyer and seller;

(d)

acting for the account of the buyer, where another member or participant acts for the account of the seller;

(e)

trading for own account against a client order.

1.

... regulated markets, and ... market operators operating an MTF shall, with regard to transactions in respect of shares admitted to trading on regulated markets concluded ... within their systems, make public the following details:

(a)

the details specified in points 2, 3, 6, 16, 17, 18 and 21 of Table 1 of Annex I [(see REC 2.6.16 EU)]

(b)

an indication that the exchange of shares is determined by factors other than the current market valuation of the share, where applicable [(see REC 2.6.17 EU)];

(c)

an indication that the trade was a negotiated trade, where applicable;

(d)

any amendments to previously disclosed information, where applicable.

Those details shall be made public either by reference to each transaction or in a form aggregating the volume and price of all transactions in the same share taking place at the same price at the same time.

22.

Trading Day

The trading day on which the transaction was executed.

3.

Trading Time

The time at which the transaction was executed, reported in the local time of the competent authority to which the transaction will be reported, and the basis in which the transaction is reported expressed as Co-ordinated Universal Time (UTC) +/- hours.

6.

Instrument Identification

This shall consist in:

- a unique code to be decided by the competent authority (if any) to which the report is made identifying the [share] which is the subject of the transaction;

- if the [share] in question does not have a unique identification code, the report must include the name of the [share] ...

16.

Unit Price

The price per [share] excluding commission and (where relevant) accrued interest. ...

17.

Price Notation

The currency in which the price is expressed ...

18.

Quantity

The number of units of the [shares].

21.

Venue identification

Identification of the venue where the transaction was executed. That identification shall consist ... [of the regulated market or MTF's] ... unique harmonised identification code;

...

The deferred publication of information in respect of transactions may be authorised, for a period no longer than the period specified in Table 4 in Annex II [(see REC 2.6.20 EU)] for the class of share and transaction concerned, provided the following criteria are satisfied:

(a)

the transaction is between [a MiFID investment firm] dealing on own account and a client of that firm;

(b)

the size of that transaction is equal to or exceeds the relevant minimum qualifying size, as specified in Table 4 in Annex II [(see REC 2.6.20 EU)].

In order to determine the relevant minimum qualifying size for the purposes of point (b), all shares admitted to trading on a regulated market shall be classified in accordance with their average daily turnover to be calculated in accordance with Article 33.