MAR 7A.4 Requirements when providing direct electronic access

This section applies to a firm which provides the services of DEA to a trading venue.

A firm must have in place systems and controls which:

1. (1)

   ensure it conducts an assessment and review of the suitability of clients using the service;

2. (2)

   prevent clients using the service from exceeding appropriate pre-set trading and credit thresholds;

3. (3)

   prevent trading by clients which:

   1. (a)

      may create risks to the firm;

   2. (b)

      or may create, or contribute to, a disorderly market; or

   3. (c)

      could be contrary to the Market Abuse Regulation or the rules of the trading venue.

[Note: article 17(5) of MiFID]

1. (1)

   A firm must monitor the transactions made by clients using the service to identify:

   1. (a)

      infringements of the rules of the trading venue; or

   2. (b)

      disorderly trading conditions; or

   3. (c)

      conduct which may involve market abuse and which is to be reported to the FCA.

2. (2)

   A firm must have a binding written agreement with each client which:

   1. (a)

      details the essential rights and obligations of both parties arising from the provision of the service; and

   2. (b)

      states that the firm is responsible for ensuring the client complies with the requirements of MiFID and the rules of the trading venue.

[Note: article 17(5) of MiFID] Notifications

A firm must immediately notify the FCA if it is providing DEA services.

[Note: article 17(5) of MiFID and MiFID RTS 6 specifying the organisational requirements of investment firms providing direct electronic access]

A firm must provide the following, at the FCA’s request, within 14 days from receipt of the request:

1. (1)

   a description of the systems mentioned in MAR 7A.4.2R(1);

2. (2)

   evidence that those systems have been applied; and

3. (3)

   information stored in accordance with MAR 7A.4.6R.

[Note: article 17(5) of MiFID]

A firm must arrange for records to be kept:

1. (1)

   on the matters referred to in MAR 7A.4.2R in relation to its systems and controls; and

2. (2)

   in order to enable it to meet any requirement imposed on it under MAR 7A.4.5R.

[Note: article 17(5) of MiFID]