ESMA polishes up market making exemption
05 February 2013 Paris
Image: Shutterstock
The European Securities and Markets Authority (ESMA) has published its final guidelines on the exemption for market making activities and primary market operations under the Short Selling Regulation.
ESMA chair Steven Maijoor said: “Market-making is an important function in securities markets, these guidelines provide clarity to participants and supervisors on the operation of the exemptions under the Short Selling Regulation. "
"This ensures that market participants can operate knowing that the same criteria are being applied in a consistent manner by authorities across the EU, thereby ensuring a level playing field for all."
Key elements covered by the guidelines include the provision that in order to benefit from the market making exemption on a particular instrument, the market maker should be a member of a trading venue on which the relevant financial instrument is admitted to trading and conduct market making there.
Secondly, for any instrument for which a notification of intent to use the exemption is made, ESMA states that the market maker should fulfill some general principles. For equities and equity derivatives, the guidelines specify qualifying criteria to be considered by the authority which received the notification of intent in the assessment on whether to allow the use of the exemption or not.
For a full outline of the guidelines, as well as a feedback statement which addresses issues raised by respondents to the consultation paper, click here.
ESMA chair Steven Maijoor said: “Market-making is an important function in securities markets, these guidelines provide clarity to participants and supervisors on the operation of the exemptions under the Short Selling Regulation. "
"This ensures that market participants can operate knowing that the same criteria are being applied in a consistent manner by authorities across the EU, thereby ensuring a level playing field for all."
Key elements covered by the guidelines include the provision that in order to benefit from the market making exemption on a particular instrument, the market maker should be a member of a trading venue on which the relevant financial instrument is admitted to trading and conduct market making there.
Secondly, for any instrument for which a notification of intent to use the exemption is made, ESMA states that the market maker should fulfill some general principles. For equities and equity derivatives, the guidelines specify qualifying criteria to be considered by the authority which received the notification of intent in the assessment on whether to allow the use of the exemption or not.
For a full outline of the guidelines, as well as a feedback statement which addresses issues raised by respondents to the consultation paper, click here.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
