ESMA and NCAs to coordinate supervisory activities on MiFID II pre-trade controls
ESMA and NCAs to coordinate supervisory activities on MiFID II pre-trade controls
- ESMA and NCAs to coordinate supervisory activities on MiFID II pre-trade controls
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has launched a Common Supervisory Action (CSA) with National Competent Authorities (NCAs), with the objective of assessing the implementation of pre-trade controls (PTCs) by EU investment firms using algorithmic trading techniques. - PTCs are used by investment firms to carry out checks at order entry to limit and prevent sending erroneous orders for execution to trading venues.
- Following the May 2022 flash crash, ESMA and NCAs have focussed their attention on the implementation of PTCs in the EU, gathering evidence through questionnaires submitted to a sample of EU investment firms.
- As a follow up, ESMA and NCAs have decided to launch a CSA with the goal of gathering further and more detailed insights on how firms are using PTCs across the EU.