Related provisions for SYSC 5.2.52
Article 17 of the MiFID Regulation
2Pre-trade transparency obligations |
|
(1) |
A ... market operator operating an MTF or a regulated market shall, in respect of each share admitted to trading on a regulated market that is traded within a system operated by it and specified in Table 1 of Annex II [(see REC 2.6.8 EU)], make public the information set out in paragraphs 2 to 6. |
(2) |
Where one of the entities referred to in paragraph 1 operates a continuous auction order book trading system, it shall, for each share as specified in paragraph 1, make public continuously throughout its normal trading hours the aggregate number of orders and of the shares those orders represent at each price level, for the five best bid and offer price levels. |
(3) |
Where one of the entities referred to in paragraph 1 operates a quote-driven trading system, it shall, for each share as specified in paragraph 1, make public continuously throughout its normal trading hours the best bid and offer by price of each market maker in that share, together with the volumes attaching to those prices. |
The quotes made public shall be those that represent binding commitments to buy and sell the shares and which indicate the price and volume of shares in which the registered market makers are prepared to buy or sell. |
|
In exceptional market conditions, however, indicative or one-way prices may be allowed for a limited time. |
|
(4) |
Where one of the entities referred to in paragraph 1 operates a periodic auction trading system, it shall, for each share specified in paragraph 1, make public continuously throughout its normal trading hours the price that would best satisfy the system's trading algorithm and the volume that would potentially be executable at that price by participants in that system. |
(5) |
Where one of the entities referred to in paragraph 1 operates a trading system which is not wholly covered by paragraphs 2 or 3 or 4, either because it is a hybrid system falling under more than one of those paragraphs or because the price determination process is of a different nature, it shall maintain a standard of pre-trade transparency that ensures that adequate information is made public as to the price level of orders or quotes for each share specified in paragraph 1, as well as the level of trading interest in that share. |
In particular, the five best bid and offer price levels and/or two-way quotes of each market maker in that share shall be made public, if the characteristics of the price discovery mechanism permit it. |
|
(6) |
A summary of the information to be made public in accordance with paragraphs 2 to 5 is specified in Table 1 of Annex II. [(see REC 2.6.8 EU)] |
Table 1 of Annex II to the MiFID Regulation: Information to be made public in accordance with Article 17 (see REC 2.6.9EU)
2Type of system |
Description of system |
Summary of information to be made public, in accordance with Article 17 |
continuous auction order book trading system |
a system that by means of an order book and a trading algorithm operated without human intervention matches sell orders with matching buy orders on the basis of the best available price on a continuous basis |
the aggregate number of orders and the shares they represent at each price level, for at least the five best bid and offer price levels. |
quote-driven trading system |
a system where transactions are concluded on the basis of firm quotes that are continuously made available to participants, which requires the market makers to maintain quotes in a size that balances the needs of members and participants to deal in a commercial size and the risk to which the market maker exposes itself |
the best bid and offer by price of each market maker in that share, together with the volumes attaching to those prices |
periodic auction trading system |
a system that matches orders on the basis of a periodic auction and a trading algorithm operated without human intervention |
the price at which the auction trading system would best satisfy its trading algorithm and the volume that would potentially be executable at that price |
trading system not covered by first three rows |
A hybrid system falling into two or more of the first three rows or a system where the price determination process is of a different nature than that applicable to the types of system covered by [the] first three rows |
adequate information as to the level of orders or quotes and of trading interest; in particular, the five best bid and offer price levels and/or two way quotes of each market maker in the share, if the characteristics of the price discovery mechanism so permit |
Article 27(1) of the MiFID Regulation
2Post-trade transparency obligation |
||
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. |
Schedule to the Recognition Requirements Regulations, Paragraph 4(2)(a)
2Without prejudice to the generality of sub-paragraph [4(1)], the [UK RIE] must ensure that - |
access to the [UK RIE's] facilities is subject to criteria designed to protect the orderly functioning of the market and the interests of investors and is in accordance with paragraph 7B; |
Schedule to the Recognition Requirements Regulations, Paragraph 7B
2(1) |
The [UK RIE] must make transparent and non-discriminatory rules, based on objective criteria, governing access to, or membership of, its facilities. |
||
(2) |
In particular those rules must specify the obligations for users or members of its facilities arising from - |
||
(a) |
the constitution and administration of the [UK RIE]; |
||
(b) |
rules relating to transactions on the market; |
||
(c) |
its professional standards for staff of any investment firm or credit institution having access to or membership of a financial market operated by the [UK RIE]; |
||
(d) |
conditions established under sub-paragraph (3)(c) for access to or membership of a financial market operated by the [UK RIE] by persons other than investment firms or credit institutions; and |
||
(e) |
the rules and procedures for clearing and settlement of transactions concluded on a financial market operated by the [UK RIE]. |
||
(3) |
Rules of the [UK RIE] about access to, or membership of, a financial market operated by it must permit the [UK RIE] to give access to or admit to membership (as the case may be) only - |
||
(a) |
an investment firm, |
||
(b) |
a credit institution, or |
||
(c) |
a person who - |
||
(i) |
is fit and proper, |
||
(ii) |
has a sufficient level of trading ability and competence, |
||
(iii) |
where applicable, has adequate organisational arrangements, and |
||
(iv) |
has sufficient resources for the role he is to perform, taking into account the [UK RIE's] arrangements under paragraph 4(2)(d). |
||
(4) |
Rules under this paragraph must enable - |
||
(a) |
an investment firm authorised under Article 5 of [MiFID], or |
||
(b) |
a credit institution authorised under the Banking Consolidation Directive, |
||
by the competent authority of another EEA State (including a branch established in the United Kingdom of such a firm or institution) to have direct or remote access to or membership of, any financial market operated by the [UK RIE] on the same terms as a UK firm. |
|||
(5) |
The [UK RIE] must make arrangements regularly to provide the [FCA]3 with a list of users or members of its facilities. 3 |
||
(6) |
This paragraph is without prejudice to the generality of paragraph 4. |
Schedule to the Recognition Requirements Regulations, Paragraph 4(2)(d)
2Without prejudice to the generality of sub-paragraph [4(1)], the [UK RIE] must ensure that - |
satisfactory arrangements which comply with paragraph 7D are made for securing the timely discharge (whether by performance, compromise or otherwise) of the rights and liabilities of the parties to transactions effected on the [UK RIE] (being rights and liabilities in relation to those transactions); |
Schedule to the Recognition Requirements Regulations, Paragraph 7D
2(1) |
The rules of the [UK RIE] must permit a user or member of a regulated market operated by it to use whatever settlement facility he chooses for a transaction. |
|
(2) |
Sub-paragraph (1) only applies where - |
|
(a) |
such links and arrangements exist between the chosen settlement facility and any other settlement facility as are necessary to ensure the efficient and economic settlement of the transaction; and |
|
(b) |
the [UK RIE] is satisfied that the smooth and orderly functioning of the financial markets will be maintained. |
Sections 85 and 86 of the Act provide for when a prospectus approved by the FCA will be required:
85 |
(1) |
It is unlawful for transferable securities to which this subsection applies to be offered to the public in the United Kingdom unless an approved prospectus has been made available to the public before the offer is made. |
||||
(2) |
It is unlawful to request the admission of transferable securities to which this subsection applies to trading on a regulated market situated or operating in the United Kingdom unless an approved prospectus has been made available to the public before the request is made. |
|||||
(3) |
A person who contravenes subsection (1) or (2) is guilty of an offence and liable – |
|||||
(a) |
on summary conviction, to imprisonment for a term not exceeding 3 months or a fine not exceeding the statutory maximum or both; |
|||||
(b) |
on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine or both. |
|||||
(4) |
A contravention of subsection (1) or (2) is actionable, at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty. |
|||||
(5) |
Subsection (1) applies to all transferable securities other than – |
|||||
(a) |
those listed in Schedule 11A; |
|||||
(b) |
such other transferable securities as may be specified in prospectus rules [see PR 1.2.2 R]. |
|||||
(6) |
Subsection (2) applies to all transferable securities other than – |
|||||
(a) |
those listed in Part 1 of Schedule 11A; |
|||||
(b) |
such other transferable securities as may be specified in prospectus rules [see PR 1.2.3 R]. |
|||||
(7) |
"Approved prospectus" means, in relation to transferable securities to which this section applies, a prospectus approved by the competent authority of the home State in relation to the issuer of the securities. |
|||||
86 |
Exempt offers to the public |
|||||
(1) |
A person does not contravene section 85(1) if – |
|||||
(a) |
the offer is made to or directed at qualified investors only; |
|||||
(b) |
the offer is made to or directed at fewer than 1502 persons, other than qualified investors, per EEA State; |
|||||
(c) |
the minimum consideration which may be paid by any person for transferable securities acquired by him pursuant to the offer is at least 100,0003 euros (or an equivalent amount); 3 |
|||||
(d) |
the transferable securities being offered are denominated in amounts of at least 100,0003 euros (or equivalent amounts); 33 |
|||||
(e) |
the total consideration for the transferable securities being offered in the EEA states3 cannot exceed 100,000 euros (or an equivalent amount); or3 3 |
|||||
3(f) |
the offer falls within subsection (1A). |
|||||
3(1A) |
An offer (“the current offer”) falls within this subsection where transferable securities are resold or placed through a financial intermediary where: |
|||||
3(a) |
the transferable securities have previously been the subject of one or more offers to the public; |
|||||
3(b) |
in respect of one or more of those previous offers, any of paragraphs (a) to (e) of subsection (1) applied; |
|||||
3(c) |
a prospectus is available for the securities which has been approved by the FCA and meets either of the conditions in subsection (1B);4 and 4 |
|||||
3(d) |
the issuer or other person who was responsible for drawing up the prospectus has given written consent to the use of the prospectus for the purpose of the current offer.4 |
|||||
4(1B) |
The conditions referred to in subsection (1A)(c) are: |
|||||
(a) |
that the prospectus was approved by the FCA no earlier than 12 months before the date the current offer is made, and is supplemented by every supplementary prospectus which was required to be submitted under section 87G; or |
|||||
(b) |
in the case of non-equity transferable securities falling within article 5(4)(b) of the prospectus directive, that the securities concerned have not ceased to be issued in a continuous or repeated manner. |
|||||
(2) |
Where - |
|||||
(a) |
a person who is not a qualified investor ("the client") has engaged a qualified investor falling within point (1) of Section 1 of Annex II to the markets in financial instruments directive3 to act as his agent; and 3 |
|||||
(b) |
the terms on which the qualified investor is engaged enable him to make decisions concerning the acceptance of offers of transferable securities on the client's behalf without reference to the client, |
|||||
an offer made to or directed at the qualified investor is not to be regarded for the purposes of subsection (1) as also having been made to or directed at the client. |
||||||
(3) |
For the purposes of subsection (1)(b), the making of an offer of transferable securities to – |
|||||
(a) |
trustees of a trust, |
|||||
(b) |
members of a partnership in their capacity as such, or |
|||||
(c) |
two or more persons jointly, |
|||||
is to be treated as the making of an offer to a single person. |
||||||
(4) |
In determining whether subsection (1)(e) is satisfied in relation to an offer ("offer A"), offer A is to be taken together with any other offer of transferable securities of the same class made by the same person which – |
|||||
(a) |
was open at any time within the period of 12 months ending with the date on which offer A is first made; and |
|||||
(b) |
had previously satisfied subsection (1)(e). |
|||||
(5) |
For the purposes of this section, an amount (in relation to an amount denominated in euros) is an "equivalent amount" if it is an amount of equal value denominated wholly or partly in another currency or unit of account. |
|||||
(6) |
The equivalent is to be calculated at the latest practicable date before (but in any event not more than 3 working days before) the date on which the offer is first made. |
|||||
(7) |
"Qualified investor" in relation to an offer of transferable securities,3 means – |
|||||
(a) |
a person described in points (1) to (4) of Section I of Annex II to the markets in financial instruments directive, other than a person who, before the making of the offer, has agreed in writing with the relevant firm (or each of the relevant firms) to be treated as a non-professional client in accordance with the final paragraph of Section I of Annex II to that directive;3 3 |
|||||
(b) |
a person who has made a request to one or more relevant firms to be treated as a professional client in accordance with Section II of Annex II to that directive and has not subsequently, but before the making of the offer, agreed in writing with that relevant firm (or each of those relevant firms) to be treated as a non-professional client in accordance with the final paragraph of Section I of Annex II to that directive;3 3 |
|||||
(c) |
a person who is recognised as an eligible counterparty in accordance with article 24 of that directive and has not, before the making of the offer, agreed in writing with the relevant firm (or each of the relevant firms) to be treated as a non-professional client in accordance with the final paragraph of Section I of Annex II of that directive;3 3 |
|||||
3(d) |
a person whom any relevant firm is authorised to continue to treat as a professional client in accordance with article 71(6) of that directive. |
|||||
3(8) |
In subsection (7) “relevant firm” means an investment firm or credit institution acting in connection with the offer. |
|||||
3(9) |
Investment firms and credit institutions must communicate their classification of their clients as being or not being qualified investors on request to an issuer, subject to complying with the Data Protection Act 1998 or any directly applicable EU legislation relating to data protection. |
|||||
3(10) |
In subsections (8) and (9) - “credit institution” means - (a) a credit institution authorised under the banking consolidation directive; or (b) an institution which would satisfy the requirements for authorisation as a credit institution under that directive if it had its registered office (or if it does not have one, its head office) in an EEA State. |